First-Time Homebuyers

There are many loan programs and grants that cater to first-time homebuyers, especially on the state and local levels. While a person who has never owned a home before certainly counts as a first-time home buyer, those who have owned a home before can also qualify as first-time homebuyers under certain circumstances (see eligibility below).

Down Payment Options

The IRS allows first-time homebuyers to borrow against their IRAs without paying the standard 10 percent penalty. These homebuyers may also borrow against their Roth IRAs tax-free after five years of investment (be sure to consult a professional tax advisor). The money must be used for a down payment or acquisition costs on a principal residence for the IRA owner or close family member. There is a lifetime limit of $10,000 on these exceptions, and you must use the money within 120 days.

A first-time home buyer is anyone who has not owned a home for at least the previous two years (says three years below). If the buyer or spouse has owned a home within the previous two years, the IRS does not consider them to be first-time homebuyers.

FHA Loans

Since first-time homebuyers are not selling a home and using the profit to buy a home, they often need help with the down payment. An FHA Loan (Federal Housing Administration) helps many first-time buyers, particularly when combined with down payment assistance programs sponsored by state agencies. These state programs give first-time buyers low-cost loans or grants to help them comply with a low down payment required by the FHA.


FHA guidelines sometimes extend its definition of first-time homebuyers to those who owned a home with a spouse. This includes single parents divorced from their spouses or those who are displaced homemakers. Many of these individuals have been on the deed for a home without being on the mortgage. Those who have only owned a mobile home not permanently attached to a foundation are also considered first-time homebuyers.

Any person who has not owned a principal residence in three years qualifies as a first-time home buyer under FHA guidelines. If your previous home was sold or foreclosed on or you owned an investment property, you may qualify as a first-time home buyer. If one spouse qualifies and the other does not, then they both may qualify as first-time homebuyers.

To find out your eligibility, contact us directly for details.

Buy a Home with 100% Financing

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VA Loans
For eligible veterans, the VA (Veterans Administration) loan is one of the most flexible when it comes to qualifying. It is one of the few loans allowing 100% financing with a maximum loan amount of $417,000 for a conforming loan. Loan limits can vary by county and there are higher limits for jumbo or larger balance loans so be sure to ask us for details.Unlike most other financing programs, the VA uses a single qualifying ratio. This allows the veteran, without monthly obligations, to increase the portion of his/her income that can be allocated to a housing payment to that of 41%. This includes principal, interest, taxes and insurance (PITI). Qualifying for a VA loan also takes into consideration the residual income the veteran has after obligations of PITI, maintenance, utilities, income taxes and social security are met. The residual requirements vary with geographic location and family size but are usually easily met if the income-to-debt ratio is within the 41% guideline. If the house obligation is in excess of the 41% but the residual income is 120% (or greater), there is strong support to approve the loan despite exceeding the ratio guidelines.


A USDA loan (United States Department of Agriculture) is a great option for those who qualify in designated rural areas and are within the compliance income limits (determined by location). It can be ideal if the buyer has limited or no money down. There are no maximum loan limits unlike most other loan programs. The program features lower interest rates and can be an affordable option for first-time homebuyers.

One of the most attractive components to a USDA loan is you can use 100% of the appraised value which means, no down payment, and sometimes your closing costs can be rolled into the total cost of the loan.

NOTE: This loan is for owner-occupied borrowers only.

To find out if a property is eligible, call us and we’ll be glad to look up the property for you OR go to and enter the address in question.

203K Renovation Loan

A Rehabilitation Loan, also known as a 203K loan is simply an FHA, owner-occupied first mortgage loan that gives you the cash needed to do repairs or renovations on the home you are buying or a home you already own.

A standard 203K can give you the money to do major renovations such as finishing a basement or a room addition. Whereas, the Streamline 203K doesn’t typically require more than $35,000 to make improvements such as kitchen and bath remodels.

Our loan professionals at Evergreen Home Loans can help you better understand this program and all the ways it might benefit you. We look forward to answering your questions and exploring the possibilities with you.