Anyone keeping an eye on the real estate scene in Denver – or anywhere for that matter – you’ve likely have been hearing a lot about rising interest rates and how that can impact first time homebuyers. While rates are no longer at historical lows, first time home buyers have several financing options to consider, which we’ve outlined below.

Conventional Loans:

·       Offered by private lenders.

·       Typically require a higher credit score.

·       Down payment can vary but is often higher compared to other options.

FHA Loans (Federal Housing Administration):

·       Insured by the government.

·       Easier qualification criteria.

·       Lower down payment requirements (usually around 3.5%).

VA Loans (Department of Veterans Affairs):

·       Available for eligible veterans, active-duty service members, and some surviving spouses.

·       No down payment required.

·       Competitive interest rates.

USDA Loans:

·       Backed by the U.S. Department of Agriculture.

·       Designed for rural and suburban homebuyers.

·       No down payment required in many cases.

State and Local First-Time Homebuyer Programs:

State governments offer assistance programs. These programs may provide down payment assistance, grants, or low-interest loans.

Down Payment Assistance Programs:

·       Various organizations and nonprofits offer assistance for the down payment.

·       These programs aim to make homeownership more accessible.

Good Neighbor Next Door Program:

·       Sponsored by the U.S. Department of Housing and Urban Development (HUD).

·       Offers significant discounts for law enforcement officers, teachers, firefighters, and emergency medical technicians.

Energy-Efficient Mortgage (EEM):

·       Allows borrowers to finance energy-efficient improvements into their mortgage.

Local Bank and Credit Union Loans:

·       Check with local banks and credit unions, as they may offer specialized programs for first-time homebuyers.

It's important to shop around, compare interest rates, and carefully consider the terms and conditions of each financing option. Consulting with a mortgage advisor or a housing counselor can also be beneficial in navigating the process and finding the best option for your specific situation.

When you determine what type of financing options work best for you, we always recommend getting pre-approved before starting your house hunt. This not only shows sellers you’re serious, but also helps you determine just how much home you can afford.