Home buying can be an expensive process. Homes are usually the costliest purchase that most of us will ever make. It’s a decision that definitely shouldn’t be rushed.

Some buyers are fortunate enough to buy the house that they want with cash. This is a luxury that most of us simply can’t afford. Fortunately, there are plenty of loan options, especially for those who are buying a home for the very first time.

Buying a home in Texas isn’t always easy. You have to pay attention to current economic trends and market conditions. If you’re in a buyer’s market, you may be able to name your price for the house that you have your eyes on.

In a seller’s market, you may have to compete with other interested parties and make an offer that may be a little more than you were planning on. Due diligence, determination, and a good plan of action are essential for achieving your homeownership goal.

Here are some of the most popular loan programs that are currently available to first time home buyers:

1. USDA loans.

USDA loans are supported by the United States Department of Agriculture’s Rural Development program. They are intended for people living in rural areas. Certain income restrictions may apply depending on where you live. There are no down payment requirements for USDA home loans.

The house you’re trying to buy with this type of loan must be in a rural area. You can refer to your local, city, or state government if you need further clarification or definition of what is considered to be rural.You may be able to receive a loan with low-interest rates. However, you will be responsible for paying mortgage insurance premiums in most cases.

2. FHA loans.

FHA loans are backed by the US government’s Federal Housing Administration. These kinds of loans are ideal for people who are buying their first house or may not necessarily have the best credit rating. Down payments for FHA loans can go as low as 3.5 percent.

People can have better luck qualifying for FHA mortgage loans because the Federal Housing Administration insures these loans. They protect lenders from possible defaults by the borrower. Applicants should have a debt to income ratio of 50 percent or less and steady employment history.

3. VA loans.

VA loans are offered by the United States Veterans Affairs program. They are primarily for active and veteran military service members and their surviving spouses. There are no minimum credit scores, but a score of 580 or better is usually preferred. No down payment is required for a VA mortgage loan.

To qualify for a VA home loan, you must have actively served during wartime for at least 90 consecutive days, and have served 181 consecutive days or more during peacetime. National Guard or Reserve members must have served for more than six years or served for at least 90 days under Title 32. 30 of those 90 days under Title 32 need to have been consecutive.

People who have lost their spouse to a service-related disability or in the line of duty can apply for Veterans Administration home loans. The surviving spouse generally cannot remarry, but exceptions have been allowed in some instances.

4. Conventional loans.

There are many kinds of conventional loans on the market today. They are offered by Freddie Mac, Fannie Mae and other companies that are supported by the US government. Down payments can be as little as three percent for conventional home loans.

Conventional loans aren’t backed by the federal government, but they can give borrowers a little more freedom. Rates and regulations can vary from one company to another. Credit scores from 620 to 740 or higher are usually what these lenders will look for.

5. Programs for first time home buyers.

Texas does have a few programs that are available for people who are buying a house for the first time in their lives. They are offered by the Texas Department of Housing and Community Affairs (TDHCA).

A minimum credit score of 620 is necessary to qualify. Applicants must use these loan programs to purchase a single-unit condominium or single-family home in the state of Texas (certain kinds of manufactured housing are acceptable).

Specific loan and income requirements must also be met, which can vary according to the particular kind of loan that is being taken out.

6. Home renovation loans.

If your first home will need a little work and you’re ready to take on those challenges, you may want to apply for a home renovation loan. There are several kinds of home renovation loans that can be acquired.

Fannie Mae offers HomeStyle loans. These are conventional loans intended for houses that will be remodeled after they have been bought. These loans can be obtained with down payments that are sometimes as low as three percent of the home’s sale price.

Freddie Mac has the CHOICERenovation loan. Low down payments are available with this type of conventional mortgage loan. They allow borrowers to successfully finance the home improvements and cost of the home purchase.

FHA 203(k) loans are a good option for buyers who are eager to tackle a home renovation or remodeling project. The estimated property value after any enhancements or upgrades have been made is factored into the loan. Buyers can then borrow the money necessary to pay their mortgage and for the costs of the changes that are made to the house.

People who are yearning for a more energy-efficient dwelling can look into getting an Energy Efficient mortgage. Adding green features or buying a residence that already has upgrades that can save owners money on energy costs are the focus of this program. This kind of loan lets lenders borrow money from home buyers for the primary purchase plus the costs of any changes or improvements made to the residence that improve its overall energy efficiency.

7. Good Neighbor Next Door home loans.

Mortgage loans are offered via this federally funded program. Loans are available to qualified applicants who work as emergency medical technicians (EMTs), firefighters, teachers or in law enforcement.

Down payments as low as $100 may be made and some houses may be acquired for up to 50 percent off of the standard list price. You must agree to own and live in the home that is bought with this loan for at least three years.

One drawback to this loan type is that there may not always be many homes available in your area. The properties that are eligible in this loan program have been purchased by the US Department of Housing and Urban Development (HUD) after the owners foreclosed on their FHA mortgages. These homes are generally located in neighborhoods that are classified as being part of a “revitalization area.”

These areas typically have low homeownership rates, low median household incomes, and high foreclosure rates.


Take some time to research your loan options before agreeing to anything. Read your loan contract very carefully so that you fully understand your rights and responsibilities. Make sure that your loan payments are made on time every month, and be sure to contact your lender if any unforeseen circumstances or hardships arise.

Securing a home loan is an important part of the buying process. Once that’s out of the way, it won’t be too long until your dream home will finally be yours! You can look ahead to spending quality time with your family and friends in a wonderful place that you’ll be very proud to call home.

Have Questions? Ask Rene!

Call Rene Burchell today at 469-877-3303 to tour available houses for sale in Frisco and surrounding areas.
First Time Home Buyer Loan Programs
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First Time Home Buyer Loan Programs
Some buyers are fortunate enough to buy the house that they want with cash. This is a luxury that most of us simply can't afford. Fortunately, there are plenty of loan options, especially for those who are buying a home for the very first time. . Here are some of the most popular loan programs that are currently available to first time home buyers.
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