What is the minimum credit score for a first-time buyer?

For the most accessible FHA loan, a credit score around 580 is often sufficient with a 3.5% down payment. However, scores of 620+ are required for many conventional loan programs and grants.

Can I buy a house with no money saved?

While 0% down loans exist (like VA and USDA), you still need money for closing costs (2-5% of the loan amount). Many first-time buyer programs offer down payment assistance or grants to cover some or all of these costs.

How long does the entire first-time home buying process take?

From initial pre-approval to closing, the process typically takes 45 to 90 days, depending on how quickly you find a home and how complex the underwriting process becomes.

First-Time Homebuyers

Here, you can learn about the top concerns most first time homebuyers have and how you can prepare yourself so you’re not intimidated.

First Time Home Buyers: Your Complete Step-by-Step Guide | Office of Housing powered by AAA Capital Funding, Inc.

First Time Home Buyers: Your Blueprint to Ownership

This guide simplifies the most common questions and concerns for first-time buyers, providing clarity on loans, down payments, and the entire process, step-by-step.

I. Essential Truths & Debunking Myths

Myth: You need 20% down.

Reality: Many programs, including FHA and Conventional 97, allow down payments as low as 3.5% or 3%. Active military and veterans can qualify for 0% down VA loans.

Myth: A low credit score is a dead end.

Reality: FHA loans are typically available to borrowers with scores as low as 580. Your licensed mortgage advisor can review your report and build a plan for improvement.

Myth: Renting is easier than buying.

Reality: Buying requires more upfront effort but builds equity and wealth, unlike renting. Our goal is to make the buying process feel as straightforward as possible.

II. The 8 Critical Steps for a First-Time Buyer

1

Assess Finances

Review your credit reports and gather two years of tax returns, W-2s, and pay stubs. Know your available cash for down payment and closing costs.

2

Get Pre-Approved

Crucial step. Get a fully verified Pre-Approval Letter from your mortgage professional at AAA Capital Funding, Inc. (NMLS 374739) before looking at homes. This sets your budget and loan type.

3

Select Loan Type

Determine if FHA (flexible credit), Conventional (lower PMI after 20% equity), VA (0% down), or USDA (rural) is the best fit for your specific financial situation.

4

Hire Your Team

Find a dedicated real estate agent experienced in your desired area and a closing attorney/title agent. Your mortgage team will often provide referrals.

5

The Search & Offer

Stay within your pre-approved budget. When you find "the one," submit your offer, always attaching your strong, verified Pre-Approval letter.

6

Inspection/Appraisal

Order a home inspection (for your peace of mind) and the official lender appraisal (to confirm the home's value matches the loan amount).

7

Final Underwriting

Your mortgage file moves through final underwriting. This is where your financial team works tirelessly to meet all conditions and issue the final Clear to Close.

8

Final Closing Day

Review your Closing Disclosure (CD) and sign the final stack of documents. Congratulations, you are officially a homeowner!

III. Deeper Dive: Popular Low Down Payment Loans

FHA Loan (3.5% Down)

The Federal Housing Administration (FHA) loan is often the easiest entry point for first-time buyers due to its flexible credit requirements.

Minimum Down: 3.5% of the purchase price.
Credit Score: Typically requires 580+ for 3.5% down, or 500-579 for 10% down.
Key Trade-off: Requires Mortgage Insurance Premium (MIP) for the life of the loan unless refinanced later.

Conventional 97 (3% Down)

This program is designed for first-time buyers who have good credit but limited cash. It offers competitive rates and lower minimum Private Mortgage Insurance (PMI).

Minimum Down: 3% of the purchase price.
Credit Score: Typically requires 620+ credit scores.
PMI Benefit: PMI is removable once your Loan-to-Value (LTV) ratio reaches 80% (unlike FHA's MIP).

VA Loan (0% Down)

Available to eligible service members, veterans, and surviving spouses. VA loans are arguably the most powerful loan product available.

Minimum Down: 0% down payment required.
PMI: Absolutely no Private Mortgage Insurance (PMI).
Key Requirement: Requires a Certificate of Eligibility (COE) from the VA.

Start Your First Home Journey with Authority.

Get the clarity you need. Our team of nationally licensed mortgage professionals is ready to walk you through every step, starting with a rock-solid, verified pre-approval.

Call Us: 954-390-7994 | 888-601-8344

NMLS ID: 374739

Get Started with Your Pre-Approval

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