Buying a home is one of the most rewarding experiences in life. The feeling of transitioning from a tenant to being a property owner can be quite thrilling.

But again, financial hurdles will never fail to pop up especially for low-income earners. Traditional mortgage plans need high down payments and can be relatively unaffordable. But hope is not lost—there are first time home buyer programs, down-payment aids, grants and low-interest loans designed to assist low-income families in buying their first home. If you need a home but your financial situation is holding you back, then below are the top first-time homebuyer financial aid programs you should consider.

1. Federal Housing Administration Loan

An FHA loan is designed for individuals with low credit scores. What makes it distinct is that the program has helped several low-income earners own homes compared to other plans. It has the most flexible requirements that make it more convenient compared to most home loans. In fact, with a minimum credit score of 580, you can qualify for this loan at a rate of 3.5% down payment while those with 500-579 can get 10% down payment. The loan cannot be used for investment properties. Other requirements include paycheck stubs, bank statements, and tax returns. You should also have steady employment to get this loan.

2. USDA Loans

USDA is best-suited for moderate and low-income earners living in rural areas. They can give you up to 100% housing finance. The loan also has varying income limits depending on your location. USDA loans require a credit score of 640 or above. In case you have an insufficient score, then you might be asked to provide additional documents about your payment history for you to get approval. This type of loan requires little or even no down payment.

3. VA Loan

If you are a veterans or active military you may be eligible for this loan. The loan is backed up by the Department of VA. It comes with a low-interest rate. Although it has a funding fee, the charge can be rolled into the cost of the loan. If you are a service member, then you may be exempt from paying the cost. VA loans have no minimum credit score or PMI.

4. Energy Efficient Mortgage

EEM is a loan that is backed by VA or FHA loan programs. It allows borrowers to enjoy energy efficient homes by lowering utility bills. You can use the loan to make upgrades to reduce energy use in your new home. The loan does not require any huge down payment to improve your basic loan amount.

5. Fannie Mae HomePath ReadyBuyer

The program is made for those who want to buy a foreclosed home that was initially owned by Fannie Mae. The program gives you up to 3% closing cost towards the property purchase. The only challenge is that sometimes it is hard to find such a foreclosed home listed.

6. 203K Rehab

This loan is meant for those who want to buy a fixer upper home. It is an extension of the FHA loan. Apart from giving you the money to buy a home, you also get cash to do the renovation in just one single loan. This is why it is ideal for first-timers.

7. Conventional 97 Mortgage

This is a loan program that was created by Freddie and Fannie to help first-timers own homes. It helps you to borrow money with the lowest down payment of only 3%.

8. Housing and Urban Development

This is a housing program that seeks to sell all FHA foreclosed homes that have stayed for more than half a year on the HUD website. You can also check various grants for closing costs and down payments from the website.

9. Good Neighbor Next Door

This housing grant is offered by HUD and provides up to 50% discount if you’re a police officer, teacher or firefighter. You will be charged a down payment of $100. You can use it with VA, FHA or conventional financing loan.

10. Native American Direct Home Loan

NADL is designed for native veterans. As a Native American, this loan allows you to qualify and buy property on acknowledged trust land. You should have a legal eligibility certificate from the Veterans Administration. A credit score of over 640 is also ideal and the loan should not be used for investment purposes.

11. Local First-Time Grants

Different cities and states provide grants and programs to entice new residents. The program is available in the form of a grant which does not have to be repaid. It also has low interest and deferred payments that cover the loan closing costs and down payments. Before using this program, consider checking with the housing authority website in your state.

Conclusion

Having somewhere to call home is a great achievement. But the challenge is that housing prices are always on the rise. Acquiring a home especially with low income may sound a far-fetched dream, but if you have the desire you can own one. Even with little money, you can use the above are programs, low-interest loans, and grants to buy your new home.