Best Lenders and Mortgages for First-Time Homebuyers in 2025

First-time homebuyers often need extra help to get through the mortgage process. That's why it's important to have a lender that is equipped to meet their unique needs.

As the housing market has gotten more expensive, more mortgage lenders have launched loan products that aim to make it a little more affordable for those who are looking to buy a home for the first time. Here are our favorite lenders for first-time homebuyers in 2025, plus the products they offer that make them so affordable. 

The Best Lenders With Mortgage Options for First-Time Homebuyers

• Bank of America Mortgage: Best overall
• Guild Mortgage: Best range of loan options
• Chase Mortgage: Best for low-income borrowers
• Navy Federal Credit Union Mortgage: Best for veterans
• U.S. Bank Mortgage: Best for student loan borrowers
• Carrington Mortgage Services: Best for low credit scores
• Third Federal Savings and Loan Mortgage: Best for low closing costs
• Rocket Mortgage: Best for low down payments
• CrossCountry Mortgage Mortgages: Best for non-traditional borrowers
• Flagstar Bank Mortgage: Best for professional loans

Compare the Top First-Time Homebuyer Mortgages

The best first-time homebuyer lenders and loans come with features that are beneficial for first-timers, such as down payment assistance, flexible credit requirements, and affordable rates and fees. These lenders also have great customer service and convenient application processes. Here are the best mortgage lenders for first-time homebuyers and the affordable loans they offer, as chosen by Business Insider editors in 2025.

Best Overall for First-Time Homebuyers: Bank of America Community Affordable Loan Solution

Bank of America is our favorite mortgage lender for first-time homebuyers. It's an extremely affordable lender and offers significant financial assistance. Its Community Affordable Loan Solution is one of the most generous programs of its kind.

Based on our review of the latest Home Mortgage Disclosure Act data, Bank of America's rates and fees are lower than average. This is especially beneficial for first-time borrowers, who often have lower incomes and less cash to bring to the table.  

Bank of America offers down payment assistance up to $10,000 and closing cost assistance up to $7,500. Additionally, if you're already a Bank of America customer, you may be able to receive a discount on your origination fee.

Bank of America's Community Affordable Loan Solution removes many of the barriers that traditionally have kept people from becoming homeowners. With this mortgage, you can buy a home with no down payment and no closing costs, and use non-traditional credit (such as proof of on-time rent or utility payments) to qualify.

This lender ranked No. 3 in J.D. Power's 2024 U.S. Mortgage Origination Satisfaction Study.

What to look out for: The Community Affordable Loan Solution mortgage is available only in certain markets, including some historically Black and Hispanic neighborhoods in Charlotte, Dallas, Detroit, Los Angeles, and Miami.

Bank of America Mortgage Review 

Best Range of Loan Options for First-Time Homebuyers: Guild Mortgage 1% Down Payment Advantage Mortgage

Guild Mortgage offers a ton of beneficial features that make it a great choice for first-time homebuyers, including flexible credit requirements, a convenient application process (including the ability to complete the process online or in-person at one of its physical branches), and digital closing capabilities. Plus, this lender can connect you with down payment assistance programs in your area. 

Guild has an impressive number of loan options borrowers can choose from, including less common types of mortgages you won't find at most lenders. And like Rate, Guild Mortgage also has a 1% down payment program that will provide a 2% grant (up to $5,000) to eligible borrowers. It's called the 1% Down Payment Advantage.

If you don't have a credit history, Guild's Complete Rate program lets you use rent payment history to apply. It also offers a hybrid closing that lets you sign most of your documentation ahead of time, so you'll have a quick closing appointment.

What to look out for: Guild doesn't display sample rates online. To see what you might pay with this lender, you'll need to reach out to get a rate quote. Guild also ranked below average in J.D. Power's 2024 Mortgage Origination Satisfaction Study. The 1% Down Payment Advantage program comes with income limits, so you may not qualify if you have an average or higher income.

Guild Mortgage Review

Best for First-Time Homebuyers With Lower Incomes: Chase DreaMaker Mortgage

Chase is a strong mortgage lender overall, especially if your income is low enough to qualify for the DreaMaker mortgage.

The DreaMaker mortgage is one of Chase's strongest offerings, helping middle-to-low-income borrowers get into a home with 3% down and flexible credit requirements. Its Homebuyer Grant program also gives out up to $7,500 to borrowers in communities with majority Black, Hispanic, or Latino populations.

Chase ranked above average in the J.D. Power 2024 satisfaction study.

What to look out for: To qualify for a DreaMaker mortgage, you'll need to meet income limits. 

Chase Mortgage Review

Best for Veterans Who are First-Time Homebuyers: Navy Federal Credit Union Homebuyers Choice Mortgage

Navy Federal is a good option for people affiliated with the military, and we think it's an especially good lender for first-time buyers, since it offers multiple no-down-payment loan options.

Navy Federal offers several affordable mortgages beyond its VA loan, including a Homebuyers Choice mortgage, which is a conventional loan with no down payment required and no mortgage insurance. This lender also accepts alternative credit data, such as utility bills, if you don't have a traditional credit score. 

Navy Federal received a high score from J.D. Power, but didn't rank in the annual customer satisfaction study because it doesn't meet certain criteria. According to HMDA data, the Navy Federal's average fees are low compared to other lenders.

What to look out for: Navy Federal has an NR (No Rating) from the BBB because it's in the process of responding to previously closed complaints. You can only become a member of Navy Federal Credit Union if you or your family is affiliated with the military, you are a Department of Defense civilian personnel or contractor, or you live with a Navy Federal member. 

Navy Federal Credit Union Mortgage Review

Best for Student Loan Borrowers Who are First-Time Homebuyers: U.S. Bank American Dream Loan

U.S. Bank is a good choice for student loan borrowers thanks to its American Dream Loan, which is geared toward low-income borrowers. U.S. Bank says it will work with student loan borrowers on income-driven repayment plans for this mortgage.

U.S. Bank's American Dream Loan comes with a 3% down payment, no mortgage insurance, and it allows non-traditional credit if you don't have a credit score. You'll also get up to $10,000 in down payment and closing cost assistance with this mortgage.

This lender is also a good option if you already have an account with U.S. Bank, as you could get up to $1,000 off your closing costs. U.S. Bank's average fees are also on the low end compared to other lenders, according to HMDA data.

What to look out for: The American Dream Loan is only available in 26 states. U.S. Bank ranks low on J.D. Power's 2024 customer satisfaction study.

U.S. Bank Mortgage Review

Best for First-Time Homebuyers With Low Credit Scores: Carrington Mortgage Services: Carrington Flexible Advantage Mortgage

Carrington Mortgage Services is a great option if you have a low credit score, since it has mortgages that allow credit scores down to 500. It also has options for borrowers with recent bankruptcies or foreclosures.

This lender has some of the best flexible credit options out of all the lenders on this list. With Carrington Mortgage Services, you can get a government-backed mortgage with a credit score as low as 500, or a Carrington Flexible Advantage mortgage with a score as low as 550 or recent negative events on your credit report.

What to look out for: Carrington doesn't lend in Massachusetts or North Dakota. Its rates and fees are on the high end, according to HMDA data.

Carrington has an NR, or "no rating" from the BBB because the lender is in the process of responding to previously closed complaints. Additionally, in November 2022, the Consumer Financial Protection Bureau ordered Carrington to pay $5.25 million in fines for supposedly violating borrowers' CARES Act rights. The CFPB claims that the lender misled borrowers seeking CARES Act forbearance and denied them key protections provided by the pandemic-era law.

Carrington Mortgage Services Review

Best for Low Closing Costs for First-Time Homebuyers: Third Federal Savings and Loan: Low Cost Mortgage

Third Federal Savings and Loan offers a huge range of perks for its mortgage borrowers. With the lender's Low Cost Mortgages, borrowers will only pay $395 in closing costs in exchange for taking on a slightly higher interest rate.

Third Federal is a great lender for first-time buyers who have good credit but don't have a lot of cash to bring to the transaction. With this lender, first-timers can get up to $13,000 in down payment assistance and make down payments as low as 5% without having to pay mortgage insurance.

According to HMDA data, Third Federal's average mortgage rates are low compared to other lenders.

What to look out for: Third Federal is only available in California, Colorado, Connecticut, Florida, Georgia, Illinois, Indiana, Kentucky, Maryland, Massachusetts, Missouri, New Hampshire, New Jersey, New York, North Carolina, Ohio, Oregon, Pennsylvania, Tennessee, Virginia, Washington, and Washington, DC. Its only physical branches are in Ohio and Florida.

It also doesn't offer any government-backed mortgages.

Third Federal Savings and Loan Mortgage Review

Best for Low Down Payments for First-Time Homebuyers: Rocket Mortgage: ONE+ Mortgage

Rocket Mortgage is one of our favorite mortgage lenders thanks to its convenient online application process and strong customer service. Rocket Mortgage was one of the first lenders to start offering a 1% down program, and we think its ONE+ Mortgage is the strongest of these types of programs. 

With ONE+, borrowers can put down just 1% and get a grant of up to $7,000. Those who are eligible for the program can put up to 2.99% down and still get a 2% grant from Rocket, increasing the amount of equity they start out with in the home.

Rocket ranked high in customer satisfaction in J.D. Power's 2024 study.

What to look out for: You'll need to earn 80% or less of the area median income to qualify for a ONE+ mortgage.

Rocket Mortgage Review

Best for Non-Traditional Borrowers Who Are First-Time Homebuyers: CrossCountry Mortgage: CCM Smart Start Program

CrossCountry Mortgage is an extremely flexible lender, making it a good option for first-time borrowers who have an unusual credit situation or need a less common type of mortgage.

If you're looking for assistance, the CCM Smart Start program offers up to $5,250 in down payment assistance for low-to-middle income first-time homebuyers. It also has a program called CCM Community Promise, which gives $6,500 for a down payment to borrowers in 21 different metro areas throughout the US. 

The lender doesn't set a minimum credit score on its loans, so you could qualify if you have a lower score but an otherwise strong financial profile. It also allows borrowers to apply with non-traditional credit if they don't have a credit score. 

CrossCountry offers a wide range of mortgages, including some non-QM loan options that may be good for self-employed borrowers.

What to look out for: CrossCountry Mortgage doesn't display its rates online. This lender ranked low in J.D. Power's 2024 satisfaction study, but it has many positive online customer reviews.

CrossCountry Mortgage Review

Best for Professional Loans for First-Time Homebuyers: Flagstar Bank: Professional Loan Program

If you're an early-career professional who's looking to buy your first home, you might have luck with Flagstar Bank's professional loan program. This mortgage is available to a wide variety of professionals, including doctors, nurses, physician assistants, dentists, eye doctors, veterinarians, CPAs, airline pilots, attorneys, and others.

It can be difficult for these individuals to qualify for a mortgage when they're still early in their careers since they often have large amounts of student loan debt, pushing up their debt-to-income ratios. This mortgage from Flagstar has flexible requirements and allows 0% down payments on loans up to $1 million with a 720 credit score.

What to look out for: You'll need to be within 10 years of starting your career to qualify for a professional loan. 

Flagstar Bank Mortgage Review

The journey to homeownership for first-time buyers

As a first-time homebuyer, a lot of the process might feel unfamiliar and overwhelming. That's why it's so important to have good professionals by your side. This includes both your real estate agent and your mortgage lender.

How to Choose a Lender as a First-Time Homebuyer

One major thing inexperienced mortgage borrowers should know is that there are a lot of lenders out there, and they're all different. If one doesn't quite suit your needs, you shouldn't have too much trouble finding another that does.

Be sure to apply with a few different mortgage lenders so you can compare offers. And don't just look at the rate they're offering you. Be sure to ask about lender fees and other costs you'll pay at closing, too. You might want to shop with at least three or four lenders to get a good sense of what's available to you.

Understanding your loan options

Overview of available loans for first-time homebuyers

First-time homebuyers have the same basic loan options available to them as repeat buyers, but some are better suited for first-timers than others. 

If you have a good credit score, you might be able to get a better overall deal with a conventional loan. But if your credit isn't great or you're looking to avoid a down payment, you might prefer a government-backed loan. 

You may also be eligible for specialty mortgages offered by individual lenders or programs through your state housing agency. Be sure to explore all your options to find the loan that suits your needs and helps you save on costs.

Conventional loans

Conventional loans are mortgages not backed by a government agency. They can be conforming or non-conforming.

Conforming loans

Conforming loans are mortgages that conform to Fannie Mae or Freddie Mac's credit requirements and meet the loan limits set by the Federal Housing Finance Agency.

To get a conforming loan, you'll generally need a credit score of at least 620 and a 3% minimum down payment. In 2025, the conforming loan limit is $806,500 in most areas. 

Non-conforming loans

The most common type of non-conforming loan is a jumbo loan, which is a mortgage that exceeds the conforming loan limit. Many lenders offer jumbo loans for amounts up to $2 to $3 million.

Other types of non-conforming loans may include non-QM loans, which can help those who don't qualify for traditional types of mortgages get a loan. But because they're riskier, non-QM loan borrowers pay significantly higher rates.

Government-backed loans

Like conventional loans, government-backed loans are originated by private lenders. But they come with insurance from a federal agency that protects the lender in case the borrower defaults. Because they're less risky to the lender, they often have better rates and can be easier to qualify for.

FHA loans

FHA loans are backed by the Federal Housing Administration, which is part of the US Department of Housing and Urban Development. These loans allow credit scores down to 580 with a 3.5% down payment, or down to 500 with a 10% down payment.

These mortgages are often recommended for first-time homebuyers since they have less stringent requirements. 

VA loans

VA loans are guaranteed by the US Department of Veterans Affairs. To qualify for one of these mortgages, you'll need to meet minimum service requirements in addition to the lender's credit requirements. This means you'll need to be a military servicemember or veteran who has served a certain amount of time. The amount of time varies depending on when you served. 

You'll also likely need a decent credit score. The VA doesn't set a minimum credit score for the loans it guarantees, but many individual lenders require a score of at least 620. Some may allow scores down to 580, while others may require scores in the high 600s.

VA loans require no down payment. 

USDA loans

USDA loans are guaranteed by the US Department of Agriculture. They're available to borrowers in eligible rural or suburban areas. They also don't require a down payment.

To qualify, you'll need to be in an eligible area, have a low-to-moderate income, and meet the lender's credit requirements. Often, USDA loan lenders require a credit score of at least 640. 

State and local first-time homebuyer programs

You may qualify for a program specific to your state or county. These often come in the form of down payment/closing cost assistance or tax benefits.

Down payment assistance and closing cost assistance

Your state's housing finance agency may offer down payment and closing cost assistance in the form of grants or forgivable loans. Many even offer their own HFA loans through participating lenders that come with affordable features like low down payments and competitive rates. 

Mortgage credit certificates

Some HFAs also offer mortgage credit certificates to first-time homebuyers. These certificates enable homebuyers to get a dollar-for-dollar tax credit for the interest paid on their mortgage each year, up to $2,000.

Homebuyer education courses

State and local housing agencies and authorities often offer education courses for first-time homebuyers. These can help you prepare for the costs that come with getting a mortgage and purchasing a home. Depending on the type of mortgage you get, you may be required to complete one of these courses. 

Qualifying for a first-time homebuyer loan

Credit score requirements

To get the best rates, you'll need a credit score in the 700s. But you may also qualify with a lower score, depending on the type of mortgage you get. Conventional loans typically require a score of at least 620, while FHA loans go down to 580 (or 500, with a 10% down payment). 

Credit score requirements can vary by lender. Before you apply with a lender, see if they share their minimum credit scores. This will help you understand how likely you are to be approved.

Down payment considerations

If you don't qualify for a zero-down mortgage like a VA or USDA loan, you'll need to make a down payment. Conventional loans go down to 3%, while FHA loans require at least 3.5%.

Putting down more than the minimum can help you get a better rate. But keep in mind that you'll also need between 3% and 6% of the loan amount for closing costs, so the total amount of cash needed will include more than just your down payment. You should also weigh the benefit of making a larger down payment vs. the benefit of keeping that money for other uses, like investing in the stock market. 

Debt-to-income ratios

The higher your DTI, the harder it's going to be to qualify for a mortgage. Conforming loans have a max DTI of 50%, and you can generally only go that high if the rest of your finances are in good shape and you have money in the bank to cover a certain number of mortgage payments (lenders call this "reserves").

Generally, you should aim to keep your total DTI below 36%, with your mortgage payment making up 28% or less of your monthly income. This is known as the 28/36 rule.

Preparing for the loan application process

Gathering necessary documentation

You'll need to show a lot of proof of your income and assets to the lender, so it's a good idea to get all of the documents needed for a mortgage application ready ahead of time.

When you're getting ready to apply, gather recent pay stubs, W-2s, tax returns, bank statements, and any other documentation that shows your earnings and savings.

Improving your credit score

The best thing you can do to build good credit is to make on-time payments on debts you owe. If you're trying to improve your credit score before applying for a mortgage, lowering your credit utilization can also help boost your score. You can do this by paying down credit card debt you owe or asking for an increase to your credit limit. 

Budgeting for upfront and ongoing costs

First-time homebuyers are often surprised by how much buying and owning a home can ultimately cost out of pocket. Before getting a mortgage, you'll need to budget for both your down payment and closing costs. And you'll want to make sure you can afford all the costs related to homeownership that come after closing.

On top of your monthly mortgage payment, you'll need to budget for utilities and other ongoing costs, like homeowners association fees. Additionally, experts often recommend setting aside 1% to 2% of the home's value each year for maintenance and repairs. 

Best Mortgage Lenders for First-Time Buyers FAQs

Why You Should Trust Us: Experts' Advice on Choosing the Best Lender for First-Time Homebuyers

Insider

To help you learn more about homebuying, mortgages, and lenders, four experts weighed in:

• Anthony Park, author of "How to Buy Your Perfect First Home"
• Lauryn Williams, certified financial planner, founder of Worth Winning Financial Planning
• Julie Aragon, mortgage broker, founder of Aragon Lending Team
• Molly Grace, mortgage reporter at Business Insider

Here's their advice about how to evaluate mortgage lenders, and how to decide which type of mortgage is best for you. (Some text may be lightly edited for clarity.)

What factors should someone take into consideration when choosing a mortgage lender?

Anthony Park, author:

"The canned answer is to just go with the lowest rate. However, you also want to take into account who's going to serve your loan best. Are repayments going to be easy for you? Who is most likely to be able to help you if you need to take out a HELOC or refinance later, versus somebody who's more of a one-off type?

"They may have the lowest rates to get you involved, but they might have very, very little hand holding after the fact. I wouldn't recommend paying an exorbitant amount more for potential services in the future, but just don't always necessarily go with the rock-bottom lowest rate. There's sometimes a cost with that."

Molly Grace, Business Insider:

"Remember that you're not just choosing a mortgage lender — you're also building a homebuying team. To snag the home you want in this competitive market, you need a lender that can move quickly and has good communication with you and your real estate agent.

When I was looking for a house, I was able to text my loan officer (whom my real estate agent recommended) and get quick replies when I had questions or needed an updated preapproval letter for an offer. As you compare lenders, pay attention to how responsive they are, and ask your agent if they have any experience with the lenders you're considering."

How can someone decide between a conventional mortgage vs. a government-backed mortgage?

Molly Grace, Business Insider

"An FHA mortgage is a really helpful option for borrowers with low scores or kind of rocky credit histories. But if you have great credit, you may get a better rate and pay less for mortgage insurance on a conventional mortgage. 

VA mortgages are really great deals. If you qualify for one, you should definitely go for it. You get zero down with no mortgage insurance — plus some of the best rates available."

Julie Aragon, Aragon Lending Team:

"The most common government loan that's widely available to almost everyone is the FHA loan. There's a couple of reasons why somebody would go with FHA instead of conventional one. Their credit is a little on the crummy side, let's say below 700. You can get conventional with down to a 620 score, but the mortgage insurance gets really expensive. FHA doesn't discriminate — no matter how perfect or crappy your credit is, the mortgage insurance is the same."

How can someone know whether they're financially ready to buy a home?

Lauryn Williams, CFP:

"You should have funds left over after everything is said and done as it pertains to purchasing the home. So if you don't have an emergency fund plus a down payment, you're probably not ready to purchase a home. Another thing I think about is credit card debt. While you can be approved for a mortgage with credit card debt and student loans and very little cash on hand, you put yourself in a very risky situation."

Molly Grace, Business Insider

"You have to be ready to dedicate a chunk of your budget to homeownership — and I don't mean your mortgage payment. When you own your house, there's always something that needs taking care of, especially in the first year. We got to our new house on moving day to find that the A/C was out. We paid $700 to have it fixed."

Methodology: How Did We Choose the Best First-Time Homebuyer Lenders?

To choose the top mortgage lenders of 2025, we looked at four main factors:

• Loan types. We looked for lenders that offer mortgages that are popular with first-time homebuyers and that are easier to qualify for as a first-timer. This includes conventional loans that allow low down payments as well as government-backed loans. We also chose lenders that offer specialty mortgages geared toward first-time and low-income borrowers.
• Customer satisfaction. If the lender appeared in the J.D. Power 2024 Primary Mortgage Origination Satisfaction Survey, we looked at its ranking. We also looked at online customer reviews to get a sense of how borrowers feel about the lenders and what they like and don't like about them. 
• Affordability. We considered average rates and fees for each lender as well as how easy it is to qualify for a mortgage with them. We looked at lenders' minimum credit scores and down payment requirements and whether they offer government-backed loans, which can be more affordable for borrowers with less-than-perfect financial profiles. We also looked at whether it has flexible credit requirements, such as accepting non-traditional credit from borrowers with no scores or considering borrowers with recent negative events on their credit reports.
• Ethics. Many of our top picks received an A- or better from the Better Business Bureau, which measures companies' trustworthiness.

We also looked closely at lenders with programs specifically for first-time buyers, such as down payment assistance. All of our top picks have features or products that benefit first-time buyers.

See our full methodology for evaluating mortgage lenders »

Molly Grace

Mortgage Reporter

Molly Grace is a mortgage reporter for Business Insider with over six years of experience writing about mortgages and homeownership. ExperienceIn addition to her daily mortgage rate coverage, Molly also writes mortgage lender reviews and educational articles on homebuying and analyzes data and economic trends to give readers actionable and up-to-date information about the housing market.She also tracks affordable mortgage and down payment assistance programs offered throughout the country to keep her readers informed of homebuyer programs available to them. Before Business Insider, Molly was a blog writer for Rocket Companies and helped to create Rocket Mortgage’s Shorty Award-winning podcast Home. Made.Molly is passionate about covering personal finance topics with empathy. Her goal is to make homebuying knowledge more accessible, especially for groups that may think homeownership is out of reach. ExpertiseMolly is an expert in the following topics:

• Mortgages and mortgage lenders
• Home equity
• The housing market
• The economy and the forces that impact mortgage rates
• Budgeting and saving
• Credit
• Insurance
• Retirement savings

EducationMolly earned a bachelor's degree in journalism from Indiana University. She is based in Michigan and has a dog and two cats. 

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Elias Shaya

Compliance and Operations Associate

Elias Shaya is a Compliance and Operations Associate on Business Insider's personal finance team in New York. He collaborates with the editorial team to provide timely, accurate, and impartial financial advice to readers ExperienceElias is a point person on multiple personal finance topics, from credit cards to investment products. He ensures editorial content is transparent and accessible through clear and precise language while also complying with regulatory and partner marketing guidelines. Since joining as a compliance fellow in 2022, Elias has played a crucial role in the team’s compliance efforts, ensuring no stone is left unturned. His close attention to detail and broad knowledge of various complex financial subjects help minimize risk for partners while protecting editorial independence so readers get the best possible advice. Expertise: Elias’ expertise includes:

• Credit cards
• Investing
• Loans
• Mortgages

Education: Elias graduated from the College of Staten Island with a degree in International Business.When he’s not reviewing or updating personal finance topics, Elias enjoys traveling, comedy shows, and binge-worthy TV shows.

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