Probably the biggest concern for prospective first-time homebuyers is the worry that they may not have enough saved up for a down payment or the expenses associated with taking out a home loan. But even if you're a renter with a few dings on your credit score or a paycheck that's not yet brag-worthy, consider this: there is help if you know where to look.

Dozens of federal and state government programs can help first-time homebuyers overcome many of the common hurdles to homeownership: 

• Down payment and closing cost assistance 
• Low fixed interest rates with no point and low point options
• Home improvement costs baked into amount loaned
• And more

The trick is that first-time homebuyer grants and programs are a mixed bag. Some have restrictions on the buyer, the property in question, and even the region you're looking to buy in. You have to do your homework, but first, let's determine if you're even eligible. 

Are you a first-time homebuyer?

By definition, a first-time homebuyer is someone who is buying a house for the first time. But, there are loopholes. In fact, you're still considered a first-time homebuyer if you (and/or your spouse) have not owned a home in the past three years.  

Other caveats for first-time homebuyers:

• You're now a single parent who previously owned a home with a former spouse.
• The only principal residence you've owned did not have a permanent foundation, like a mobile home.
• The property you previously owned was unable to be brought to code for less than what it would cost to build a new structure.

What kind of homes are available?

First-time homebuyers will find that nearly every kind of home is available, with certain restrictions. Home prices and household income limits are dependent on where you plan to live and how many family members are in your household. But, in general, you will be able to look at:

• Condominiums
• New and existing single-family homes
• Owner-occupied apartment buildings containing up to 4 units
• Permanent mobile homes built within the previous 20 years
• Fixer-uppers

How do first-time homebuyer programs work?

Programs for first-time homebuyers help borrowers in 3 different ways. 

1 – They help you qualify

The biggest challenge to getting approved for a home loan is the combination of a low credit score and a low income. But in reality, either one of those can sink an applicant if they're applying for a regular mortgage. First-time homebuyer programs help more people realize the American dream of homeownership by easing up requirements so that less qualified borrowers can get a mortgage. 

2 – They make homeownership more affordable

Down payments can be as much as 20% of the cost of a home. And home loan closing costs typically fall in the range of 3-6% of the loan amount. That's a lot of cash to save up and can stop prospective homeowners in their tracks. Many first-time homebuyer programs include down payment assistance, lower interest rates and fewer fees, making them infinitely more affordable.

3 – They help build real neighborhoods

There are also programs available to help you buy a home in an area that needs to be revitalized. They can be fixer-uppers in urban or rural areas that would benefit from new young families moving in. They're not exclusive to first-time homebuyers, but they still have many benefits, so we'll include them in our list below.  

What grants and programs are popular with first-time homebuyers?

While the federal government itself doesn't make home loans directly, many first-time homebuyer programs result from federal funding granted to individual states and counties. Because of this, there's a huge variety of programs found at the local level, with names and terms changing from region to region. Here are the most common programs that first-time homebuyers might choose.  

FHA loan 

Insured by the Federal Housing Administration, an FHA loan is an excellent choice for homebuyers with limited credit history, lower credit scores and not much saved up for a down payment. Keep in mind that you may have to take on the expense of private mortgage insurance to protect the lender in case you default on the loan. This may bump up your monthly payment a bit, but once you have some home equity under your belt you may be able to remove PMI altogether. 

 Fannie Mae or Freddie Mac 

Good credit? Steady job? But not much saved for a down payment? A conventional loan backed by Fannie or Freddie may be the way to go. These programs offer mortgages with 97% financing, so you only need to put down 3% of the home's price. As you save up a little more, consider making additional payments against your principal. Once your home equity reaches 20%, ask about canceling PMI insurance to lower payments further. Credit score needs to be at least 620, though, so check your credit report annually. 

Good Neighbor Next Door 

This loan is geared to firefighters, EMS workers, law enforcement, teachers and other public servants whether or not they're first-time homebuyers. Participants can receive up to 50% off eligible single-family homes located in revitalization areas and listed exclusively through the program. There are low down payments and no application fees, but you need to be quick: the number of available properties is limited and changes weekly. 

Energy-efficient mortgage (EEM) 

With this loan, borrowers can add the costs of approved energy-efficient upgrades to their mortgage amount as long as the cost of making the improvements is equal to or less than the amount saved on energy bills afterward. But you'll need to go through a home energy assessment to determine how much you'll be able to finance. 

FHA Section 203(k)  

If you're OK with buying a fixer-upper, this loan allows you to borrow the money needed to pay for home improvement projects of at least $5,000. It's basically an FHA-backed loan that estimates the home's value after proposed improvements are completed. You can then include the funds needed into the total loan amount. Note: a 3.5% down payment is typically required for this type of mortgage.

Don't forget about these!

The following two loan types should also be considered, even though they're not exclusively for first-time homebuyers.  

• VA Loans, backed by the U.S. Department of Veteran Affairs, require little-to-no down payment for qualifying military personnel, veterans, and their families. And they typically offer lower interest rates than loans available to the general public. 
• USDA loans, guaranteed by the U.S. Department of Agriculture, are great for lower-income borrowers looking to buy in more rural areas. This loan also comes with little to no down payment required and offers lower than average interest rates. But income caps vary based on where you're looking to buy, and you'll need to commit to living in your home for a fixed period. 

Get help navigating first-time homebuyer loans

These are just some of the many federal programs available. As we mentioned above, there are also first-time homebuyer programs and grants that offer unique variations at the state and local level. 

To determine which program might be right for you, reach out to a local Movement Mortgage loan officer.