Introduction

Buying your first home is an exciting milestone, but it can also feel overwhelming—especially when all you hear about are ‘high interest rates’ and ‘expensive homes’. Many first-time homebuyers worry about saving for a down payment, qualifying for a mortgage, or affording monthly payments. The good news is that several mortgage programs are designed specifically to help first-time homebuyers get into a home with minimal upfront costs.

In this guide, we’ll explore some of the best loan options available, including a 0% down mortgage option, conventional loan programs with low down payment requirements, and a two-for-one deal with solar included in financing. 

Let’s explore each of these programs and reach a mutual goal: learning how brokers at X2 Mortgage can make homeownership a reality for you!

 

1. 0% Down: No Down Payment Required

One of the biggest hurdles for first-time homebuyers is the down payment. Many of our clients believe they need 10-20% down to purchase a home, but this is not true. Because X2 is a broker, we can shop all around the country for investors who understand the roadblocks many people have saved for a down payment. X2 Mortgage offers something called a 0% Down Purchase Program, making homeownership much more accessible.

How It Works:

When you are buying a home, you are going to have to bring something to the table, including down payments and closing costs. Typically, the more you put down, the better interest rate you will have, and at the same time save even more money month to month by not paying your mortgage insurance. 

With the 0% down Program, no down payment is required, as this program covers 100% of the home's purchase price. 

Even though it is true that the down payment helps borrowers have better interest rates, this program understands the best time to buy a house was yesterday, and getting into a home sooner that will appreciate and make you thousands of dollars in equity, is better than saving on your mortgage insurance monthly. 

With no money down, buyers can use their savings for closing costs, moving, or future home expenses.

Who Qualifies?

As with any loan, buyers must meet certain credit and income requirements. With the 0% Down, buyers must be at or below 80% Area Median Income (AMI) for the address of the property they are buying. 

80% AMI for Maricopa County is $81,041. So, the borrowers on the loan have to make $81,041 or less to qualify for this program. If the borrower is at (50% AMI or below)—which is approximately $50,650 in Maricopa County—there is an added benefit: they may be eligible for a $2,500 forgivable grant. Each county is different, so be sure to check with your loan officer for accurate information. 

Quick Program Facts: 

- 30-year fixed primary purchases only (no second or investment homes)

- Does not have to be a first-time home buyer

- Homeownership education is required

- No manufactured homes.

- Silent Second is placed on the home with no interest or payments

- Money must be paid back before you refinance or sell your home. Usually, by the time you do this, you have enough equity to help cover this)

If you’re struggling to save for a down payment, this option could be the perfect solution!

0% down Case Study:

 Jim is in a new relationship with John. Jim has never bought a home before and they wanted to move into a new house together. After talking with their loan office,r they decided to do a 0% down payment loan. They're excited about this because John already bought a house but they can still both be on the loan for this specific program. They understand that this money is a silent second, which means that it's a second lien on the property and needs to be paid back before they refinance our sale. They are fine with that, as this is going to be their forever home and they are going to start a family.   Together they make about $75,000 and have low debt to income. Hello, home ownership!

2. HomeReady & Home Possible: Affordable Conventional Loans

HomeReady (by Fannie Mae) and Home Possible (by Freddie Mac) are the myth-buster conventional loan programs. You can now throw out the thought “I need to save 20% for a down payment”, as they require as little as 3% down. These loans are great alternatives to the right borrower, offering flexibility and affordability.

How it works: 

Similar to the 0% down, Home Ready and HomePossible want to get people into homes. With these conventional mortgage loans, the borrower does not receive cash directly. 

Instead, the lender provides funds to purchase the home, and these funds are paid directly to the home seller at closing.

 

To qualify for the loan, the borrower contributes a minimum 3% down payment, which can come from personal savings or gifts.

 

Who Qualifies?

To qualify for a HomeReady or Home Possible loan, buyers must have a credit score of at least 620. Additionally, these programs are designed to assist moderate- to low-income borrowers, meaning applicants must have an income at or below 80% of the area median income (AMI) for their county. 

For borrowers with very low incomes (50% AMI or below)—which is approximately $50,650 in Maricopa County—there is an added benefit: they may be eligible for a $2,500 forgivable grant that can be applied toward closing costs. This grant helps reduce upfront expenses, making homeownership even more accessible for those in lower income brackets.

Quick Program Facts: 

- 30-year fixed primary purchases only (no second or investment homes)

- Does not have to be a first-time home buyer

- Homeownership education is required

- Lower private mortgage insurance compared to FHA loans.

- Allows for co-borrowers or non-occupant cosigners.

 

HomeReady & Home Possible Case Study: 

 Rebecca and Rachel Heard from their parents that they need to save 20% down to buy a home. In this day and age that can be $100,000! They are good savers but only have about a 4th of that. They contacted a loan officer and found out that they could put 3% down for a HomePossible loan. They both have good credit and make $80,000 combined. After taking their homeownership education they ended up with a great interest rate and lower mortgage insurance compared to an FHA loan.

If you have a steady income but a limited down payment, these loans can be a fantastic option!

 

3. FHA Down Payment Assistance: Making Homeownership More Accessible

FHA loans are a popular choice for first-time buyers as all their loans offer low down payments and flexible credit requirements. In addition to this, FHA offers a special DPA, or Down Payment Assistance program, which covers the required 3.5% down.

Down payment assistance is different from a program with a silent second mortgage, which is something you eventually need to pay back when you refinance or sell the property. 

How It Works: 

Because FHA has different guidelines compared to conventional loans, there are different guidelines and rules.  FHA loans have less strict guidelines when it comes to getting a home. Usually, your debt to income can be around 48.99%, and your minimum FICO has to be 620. This Down Payment Assistance program offers money to the borrower when purchasing a home. Down payment assistance is different from a program with a silent second mortgage, which is something you eventually need to pay back when you refinance or sell the property.  In this case, this is a forgivable grant that doesn’t need to be repaid, which is either 2% or 3.5% of the purchase price. 

 

Who Qualifies?

To qualify, borrowers must have a minimum FICO score of 620. These loans are available for approved condos and manufactured housing, though specific guidelines may apply. Unfortunately, chattel loans do not qualify as they use their own lender.  Additionally, assistance programs that help with down payments or closing costs have income or residency restrictions. Check with your X2 broker, as they may have other options if you are not a US resident. This loan allows for co-borrowers or non-occupant cosigners.

 

Quick Program Facts: 

- 30-year fixed primary purchases only (no second or investment homes)

- Must be a first-time home buyer or make 140% AMI in a specific county

- Homeownership education is required

- The purchase price of the home must be within the county loan limits (546,250 for Maricopa County)

Down Payment Assistance Case Study: 

Sheila and Joe want to get out of their apartment. They've been working on paying off debt but they want to get out of their lease before they resign. They make a pretty decent income and have been trying to get their credit score up.  They found a starter home under $546,250 and didn't know how much they qualified for but talked to an X2 mortgage broker anyway. They found out about the DPA and got a 3.5 forgivable grant put down. They received a gift from the family towards closing costs and moved into their new home!

 

If you qualify for FHA but need help with the upfront costs, down payment assistance could be the key to buying your first home.

 

4. Solar Financing: Energy Efficiency Meets Affordability

Interested in Solar? You can buy a home and go green at the same time! The HomeStyle Energy Mortgage Program allows buyers to finance solar panels and energy-efficient upgrades within their home loan.

How it works: 

If you already want to have solar panels installed in your home, this is a great opportunity to make it an easy, seamless process. In the form of a full, non-repayable grant, you can get up to 3.5%, or $15,000 of your loan amount in assistance. One of the best parts? It's paid to you, so you can choose what you can do with the money, as long as your solar installation is paid. Following ways to use the money: Besides the down payment, you can pay off debt, as well as buy down your home's interest rate. When it comes to closing, you can use the money towards any closing costs, like appraisals or realtor fees. 

There are so many benefits to using solar energy as well, especially here in Arizona and other western states we are licensed in.  Solar panels can significantly reduce electricity costs, especially as the grid keeps rising. There are many tax incentives for getting solar. Homeowners qualify for federal and state solar tax credits when it comes to tax season. Finally, energy and efficient homes have increased home value, which will make a difference when you want to sell. 

 

Who Qualifies?

To qualify for this loan, buyers must meet specific credit and income requirements. The maximum loan-to-value (LTV) ratio allowed is 97%, meaning borrowers can finance up to 97% of the home's purchase price with as little as 3% down. A minimum credit score of 620 is required, and the debt-to-income (DTI) ratio cannot exceed 45%. Unlike some other loan programs, there are no income restrictions, making this an accessible option for a wide range of borrowers.

Quick Program Facts: 

- Funds can also be used to pay off other energy-related debt 

- Property also has to have an Energy report along with a standard appraisal

- Homeownership education is required

- Panels installed after closing

- No income restrictions

 

Solar Financing Case Study: 

Zuri and Amir care about the environment and like going green in their day-to-day life. They feel like they're finally ready to buy their first house as they've saved a little bit for closing costs. They were very excited that after finding out they only needed 3% down, they could also include solar panels in their home. After looking with a realtor for a home that would qualify, and getting it inspected with an Energy Report, they put their offer in. They now love what they save on solar and rent every month!

If you’re passionate about sustainability and want to lower your long-term expenses, this program can offer a ton of flexibility and be a win-win!

 

Conclusion: Choose the Right Path to Homeownership

Buying your first home doesn’t have to be intimidating—especially with so many great loan options available. Whether you need zero down financing, a low down payment with Conventional guideline perks, FHA assistance, or want to include solar in your financing, there’s a program that fits your needs.

Take the first step toward homeownership by connecting with a mortgage professional who can help you explore the best loan options for your needs. With expert guidance and the right strategy, you can secure an affordable mortgage and move confidently toward owning your dream home. Start your journey today!