Real Estate Marketing Ideas

Best Resources For First-Time Home Buyers

By Lauren Vaccaro Last Updated October 12, 2022 3 min read

As a real estate agent, it’s rewarding to help first-time home buyers make a crucial life purchase. There is much to learn about the home buying process, and it’s your job to guide them. 

Your knowledge of and ability to provide valuable home buying tools and resources can further help your clients understand the process. 

First-time home buyers likely do not know there are assistance programs, specialized loans, or even educational courses available in their own community. 

Below are a few helpful resources to share with your home buying clients: 

Down Payment Assistance

A down payment is the first hurdle many homebuyers face. Most mortgages require/encourage a hefty amount of cash up-front. However, homeowners should also save money for emergencies and future home expenses. So, how can Down Payment Assistance (DPA) help?

With DPA, your clients may be eligible for a low-to-no-interest loan to cover closing costs. This assistance is ideal for those who may not have enough cash on hand yet can afford a mortgage. 

Although it’s not your job as an agent to know all the ins and outs of DPA, here’s what are a few highlights to share with clients: 

  • There are various DPA programs in each state
  • Each program has its process and requirements
  • First-time buyers can work with a qualifying lender to apply
  • They will need to attend a required class
  • They will need to live in the home for a certain amount of time, usually three to ten years

Government-Backed Loans

Another excellent option for first-time homebuyers is government loans. These loans are insured or backed by the US federal government and offer unique benefits to qualifying buyers. 

There are currently three government-backed loan options: Federal Housing Administration Loans, Veterans Assistance Loans, and United States Department of Agriculture Loans.

FHA Loans

Federal Housing Administration loans are the broadest of the three loan types. An FHA loan is available to buyers with a lower credit score or a small down payment. However, those applying will still have to meet certain conditions such as a specific down payment amount, mortgage insurance, credit score, loan limits, and income requirements.

FHA loans are beneficial to those who may have hit hard times financially in the past but currently have steady jobs to take on a mortgage.

VA Loans

Veteran Assistance loans are available to those who have served, or are currently serving, in the United States Armed Forces. Many service members are familiar with this option, but it is still a great option to bring up to clients who have served. The VA loan does not require a down payment and also takes away the cost of Private Mortgage Insurance.

There was once a time when closing with a VA loan was more challenging. Now, closing with a VA loan is no more difficult than with any other loan type. 

USDA Loans

A USDA loan is for Americans with low income living in rural areas. The USDA loan also does not require a down payment and gives a low-interest rate.

Each government-backed loan is designed to help specific people, so we suggest having an overall understanding of each loan type. You can request handouts from assistance programs to have on hand for clients. It’s also great to build relationships with excellent lenders who can help your clients further.

Tax Deductions

In years past, the government offered tax credits to first-time homebuyers. The Biden Administration is now working on a $15,000 tax credit for first-time home buyers. While the bill hasn’t passed yet, buyers may be able to save money on their taxes through various federal and state deductions. 

Consider advising your clients to hire a financial advisor to help get the most out of their taxes after purchasing a home.

Educational Home Buying Classes

There’s no expectation for you to be the expert on lending options and assistance programs, but what you can continually offer is a starting point for helpful resources. 

Suggesting first-time homebuyers take a class may help get everyone on the same page for expectations and budget before the house search begins.

Most state housing authorities offer homebuyer education classes covering:

  • The costs of homebuying and the approval process
  • What to expect when you become a homeowner
  • Creating a budget
  • Credit score impacts on home buying and how to improve credit

Familiarity with a variety of first-time homebuyer resources helps close more deals. When you offer guidance and resources, you strengthen the trust between you and your clients. Resources and tools also help your real estate clients get where they need to be to make the best home buying decision.