First time home buyers will have an assortment of home mortgage options in 2020.  With interest rates hovering around all-time low levels, it’s a great time to purchase.

Below we will talk about the most popular First time buyer loans today, if you have questions, please call us or fill out the short Quick Contact Form on this page.


FHA Loan California

FHA Mortgage: The most popular first time buyer program remains the FHA loan. The FHA loan is a government-backed loan and one of the easiest types of mortgage loans to qualify for. In addition buyers can have less-than-perfect credit and still qualify.  Below we have listed the benefits of the program, and things to consider.

  • FHA mortgages are great because they allow a maximum of 96.5% financing, the homebuyer only needs a 3.5% down payment. This can be a big plus for first time home buyers since they often don’t have a lot of money set aside specifically for purchasing a home.
  • The FHA program permits the home seller to pay buyers closing costs – up to 6 percent.
  • The down payment money can come from a variety of sources including HUD down payment assistance grants.
  • The down payment money can also come from a gift from family.
  • Those with less than perfect credit may still be able to qualifyFor traditional mortgages, a borrower will generally need a minimum credit score greater than 640. FHA loans are much more forgiving of lower credit scores, requiring a minimum score of just 580. However, a 600 credit score will generally be required for the max 96.5% financing.
  • FHA also permits generous debt to income ratio limits, higher than any other loan program.  Please learn more about FHA loans here.


USDA mortgage

USDA Rural Housing Mortgage:  Like FHA, this is a government-backed home purchase program. The big advantage of the USDA loan is the program allows for 100 percent financing. But there’s a catch, the home must be located in a USDA rural defined area, and the family income must be below certain limits. Let’s talk more about the details below.



  • USDA Loans require NO payment up to 101% financing in select eligible areas. The extra 1% is for the USDA upfront guaranteed fee.
  • Reduced monthly mortgage insurance costs (PMI) when compared to other loan options like FHA. Nearly half the costs.
  • USDA closing costs can often be included or rolled into the loan with a higher appraisal. Closing costs can also be paid by the seller up to 6 percent.
  • No early payoff penalty.
  • There is NO maximum loan amount with the USDA program. Homebuyers are approved based on debt to income
  • Buyers do not need a set amount of assets to qualify, no minimum requirements on bank savings.
  • Qualifying for a USDA loan with lower credit scores is possible. Please note our current min required credit score is 620.
  • USDA mortgages are secure 30 year fixed rate terms at low market interest rates comparable to FHA and Conventional home loans.
  • USDA loans are for ANY new & existing single-family residence located in a Rural Development eligible area. See the USDA address lookup map here. The home being purchased can be a regular sale, short sale, foreclosure home, bank owned, etc.
  • The USDA housing program is NOT solely reserved for first time home buyers. Move up buyers can use the USDA program.
  • Household income must be below the current USDA income limits. Read more about USDA rural loans here.

VA home loans California

VA Mortgage:  If you have VA benefits, and little money to put down on a home, the VA Loan option is for you.  The government VA program offers 100% financing for approved military families and Vets.

  • 100% financing for new home purchases. VA even offers 100% cash out refinance for home owner that currently have a VA loan.
  • No mortgage insurance – PMI required. This perhaps the best benefit of the VA loan.
  • No prepay penalty ever.
  • Secure 15 or 30 year fixed rate terms.
  • VA mortgage interest rates are the lowest of any loan program available today.
  • VA loans have similar closing costs to other loans, even though they offer 100% financing. The home seller can pay buyers closing costs as well.
  • One time funding fee is charged like all Government home loans – but it can be added into the loan just like the USDA and FHA loans.
  • VA offers an assortment of refinance options should interest rates go lower, or the homeowner wants to cash out home equity in the future.
  • VA home loan can close in as little as two weeks!
  • Perfect credit scores are required,  buyers with credit scores down to 600 may be approved.

Please contact us 7 days a week to learn more or to start your loan application.