Buying a first home in the United States is a paperwork problem dressed up as a money problem. The money exists: every state runs a housing finance agency with a first-time buyer mortgage and down payment help, about half issue Mortgage Credit Certificates worth up to $2,000 a year in federal tax credits, and three mainstream loan programs — FHA, HomeReady and Home Possible — accept 3% to 3.5% down with the entire amount from gifts or assistance. What stops most buyers is not knowing these exist, or using a lender that does not offer them.
The paperwork is where the guides below earn their place: how much house you can afford by the debt-to-income math lenders use, the credit score each program really requires, FHA vs conventional, closing costs and who can pay them, and the twelve mistakes that cost buyers the most.
Start with your state: each page lists the agency’s programs, assistance amounts, tax credit availability, transfer taxes and typical closing costs, and a worked example on the state’s median home price. Then read the two or three guides that match your situation — and ask us anything the pages do not answer.
Start here
- Pull your credit reports from all three bureaus and fix errors before you talk to a lender.
- Read your state page below: note the agency’s program names and whether an MCC is offered.
- Get a full pre-approval (not a pre-qualification) from two lenders — one of them approved for your state’s program.
- Build your budget from take-home pay, not from the pre-approval maximum; include taxes, insurance and PMI.
- Take the free homebuyer education course early — most assistance programs require it and it shortens closing.
Guides
- How much house can I afford? The math lenders actually use
- FHA vs conventional for a first-time buyer: which loan wins, and when
- 3% down conventional loans: HomeReady, Home Possible and Conventional 97
- Pre-approval vs pre-qualification: what sellers actually respect
- Closing costs explained: what is negotiable, what is not
- PMI for first-time buyers: what it costs and how to get rid of it
- Gift funds for a down payment: the rules, the letter, the paper trail
- Debt-to-income ratio limits by loan type — and how to lower yours
- Credit score needed to buy a house: minimums by loan type, and what it costs to be average
- Twelve first-time home buyer mistakes — and the cheap fix for each
- Earnest money explained: how much, who holds it, and how you lose it
- Appraisal gap: what happens when the home appraises below your offer
- Down payment assistance programs: how they work and how to find yours
Editorial reviews
- FHA loans — editorial rating 3.4 / 5
- VA loans — editorial rating 4.6 / 5
- USDA loans — editorial rating 3.4 / 5
- Conventional 97 and 3%-down loans (HomeReady, Home Possible) — editorial rating 4 / 5
- State housing finance agency (HFA) loans — editorial rating 3.4 / 5
- Mortgage brokers — editorial rating 3.6 / 5
- Credit union mortgages — editorial rating 3.8 / 5
First-time buyer programs by state
- Alabama MCC · median ≈ $230,000
- Alaska median ≈ $370,000
- Arizona median ≈ $430,000
- Arkansas MCC · median ≈ $210,000
- California median ≈ $790,000
- Colorado MCC · median ≈ $550,000
- Connecticut median ≈ $430,000
- Delaware MCC · median ≈ $390,000
- Florida MCC · median ≈ $400,000
- Georgia median ≈ $330,000
- Hawaii MCC · median ≈ $850,000
- Idaho MCC · median ≈ $460,000
- Illinois median ≈ $270,000
- Indiana MCC · median ≈ $240,000
- Iowa MCC · median ≈ $220,000
- Kansas median ≈ $230,000
- Kentucky MCC · median ≈ $210,000
- Louisiana MCC · median ≈ $200,000
- Maine median ≈ $400,000
- Maryland MCC · median ≈ $420,000
- Massachusetts median ≈ $640,000
- Michigan median ≈ $250,000
- Minnesota median ≈ $340,000
- Mississippi MCC · median ≈ $180,000
- Missouri MCC · median ≈ $250,000
- Montana MCC · median ≈ $460,000
- Nebraska median ≈ $270,000
- Nevada MCC · median ≈ $450,000
- New Hampshire MCC · median ≈ $490,000
- New Jersey median ≈ $540,000
- New Mexico median ≈ $300,000
- New York median ≈ $480,000
- North Carolina MCC · median ≈ $330,000
- North Dakota median ≈ $260,000
- Ohio MCC · median ≈ $230,000
- Oklahoma median ≈ $210,000
- Oregon median ≈ $500,000
- Pennsylvania MCC · median ≈ $270,000
- Rhode Island MCC · median ≈ $470,000
- South Carolina MCC · median ≈ $300,000
- South Dakota median ≈ $300,000
- Tennessee median ≈ $320,000
- Texas MCC · median ≈ $300,000
- Utah median ≈ $520,000
- Vermont MCC · median ≈ $400,000
- Virginia MCC · median ≈ $400,000
- Washington median ≈ $600,000
- West Virginia median ≈ $170,000
- Wisconsin MCC · median ≈ $310,000
- Wyoming median ≈ $350,000
Frequently asked questions
Who counts as a first-time home buyer?
For most federal and state programs, anyone who has not owned a principal residence in the past three years — so previous owners often qualify. Many state programs also waive the requirement in targeted areas and for veterans.
How much do I really need for a down payment?
As little as 3% (conventional HomeReady, Home Possible, Conventional 97) or 3.5% (FHA), and 0% on VA and USDA loans. Closing costs of 2% to 5% come on top, though sellers, lenders and assistance programs can cover much of them.
Is it better to wait and save 20%?
Not automatically. PMI on a 5% down loan costs less than many buyers expect and cancels at 80% loan-to-value; in a rising market, years of waiting can cost more than the insurance. The decision depends on your market, your reserves after closing, and your payment comfort — not on a rule of thumb.