Best Lenders for First-Time Homebuyers of November 2023

Our experts answer readers' home-buying questions and write unbiased product reviews (here's how we assess mortgages). In some cases, we receive a commission from our partners; however, our opinions are our own.

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

There are also many programs available to help first-time homebuyers get into a home, such as down payment or closing cost grants. Some lenders have their own programs for things like this, or the ability to connect you with programs in your area. 

The Best Lenders for First-Time Homebuyers

• Guild Mortgage - Product Name Only: Best overall
• Bank of America Mortgage - Product Name Only: Best for down payment assistance
• Chase Mortgage - Product Name Only: Best for low-income borrowers
• Navy Federal Credit Union Mortgage - Product Name Only: Best for veterans
• New American Funding - Product Name Only: Best for FHA loans
• U.S. Bank Mortgage - Product Name Only: Best for student loan borrowers
• Alliant Credit Union Mortgages - Product Name Only: Best for no down payment
• Better Mortgage - Product Name Only: Best online
• Carrington Mortgage Services - Product Name Only: Best for low credit scores
• Third Federal Savings and Loan Mortgage - Product Name Only: Best for low closing costs
• Truist Home Mortgage - Product Name Only: Best for no private mortgage insurance
• Rocket Mortgage - Product Name Only: Best for low down payments

Compare the Best Lenders for First-Time Homebuyers

Best Lenders for First-Time Homebuyers Frequently Asked Questions

What is the best loan option for first-time buyers?

An FHA mortgage is often the best mortgage for a first-time buyer. FHA mortgages appeal to people whose finances aren't in the best shape yet, since the minimum credit score needed to get one is 580. If your credit is in a good spot, a conventional mortgage may also be a good option since it allows a 3% down payment.

What credit score is needed for first-time buyers?

Regardless of whether you're a first-time buyer or not, you'll need at least a 620 credit score to get a conventional mortgage to buy a house, and a 580 score to get an FHA mortgage.

Is it a good idea to get an FHA loan?

FHA loans are often a good fit for first-time homebuyers, but keep in mind that you will most likely need to pay mortgage insurance for the life of the loan with these mortgages. By contrast, conventional loans let you cancel mortgage insurance once you reach 20% equity.

What is an ok credit score to buy a house?

At a minimum, you'll need a credit score of 620 to get a conventional mortgage. But to access the best rates, you should aim to have a score in the 700s. 

What is homebuyer assistance?

Homebuyer assistance usually refers to money that helps you cover a down payment or closing costs. The lender may give you a grant that you don't have to pay back, or a small loan that has better terms than a regular mortgage. Some homebuyer assistance programs forgive your loan under certain circumstances — for example, if you stay in the home for five years.

First-Time Homebuyer Lender Reviews

Best Overall for First-Time Homebuyers

Guild Mortgage

Guild Mortgage offers many extra features that make it our favorite lender for first-time buyers, 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. 

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.

It's also a top lender for customer satisfaction; in 2022, it ranked above the industry average in J.D. Power's annual Mortgage Origination Satisfaction Study.

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.

Best for Down Payment Assistance for First-Time Homebuyers

Bank of America

Bank of America is one of our favorite big bank mortgage lenders for first-time homebuyers. It offers significant financial assistance, and its new Community Affordable Loan Solution is one of the most generous programs of its kind.

Bank of America offers down payment assistance up to $10,000 and closing cost assistance up to $7,500. This makes it a particularly attractive lender for first-time homebuyers, who often have trouble coming up with enough cash to cover these costs. 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 new 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 above average on J.D. Power's 2022 Primary 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.

Best for First-Time Homebuyers With Lower Incomes

Chase

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 $2,500, or $5,000 to borrowers in low-income or majority-Black areas.

Chase ranked No. 2 in the J.D. Power 2022 Mortgage Origination Satisfaction Study.

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

Best for Veterans Who are First-Time Homebuyers

Navy Federal Credit Union

Navy Federal is a good option for people affiliated with the military, especially if you're searching for a lender that's friendly to people who have low credit scores and little money for a down payment.

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.

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.

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. 

Best for FHA Loans If You're a First-Time Homebuyer

New American Funding

New American Funding is a good mortgage lender overall, and its FHA loans are a particularly strong choice for first-time homebuyers with limited or rocky credit histories.

New American Funding allows scores below 580 on its FHA loans and will consider non-traditional credit from borrowers who don't have a score. You may also be able to get an FHA loan from this lender if you have a recent negative event, such as a bankruptcy or foreclosure, on your credit report.

What to look out for: It's not available to residents of Hawaii or New York. New American Funding doesn't let you explore personalized rates without providing contact information.

Best for Student Loan Borrowers Who are First-Time Homebuyers

U.S. Bank

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.

What to look out for: U.S. Bank ranks low on J.D. Power's 2022 customer satisfaction study.

Best for First-Time Homebuyers With No Down Payment

Alliant Credit Union

Alliant Credit Union is a good option for first-time borrowers with decent credit scores. This lender's Alliant Advantage Mortgage lets first-time homebuyers put 0% down with no mortgage insurance, making it an incredibly affordable option for those who qualify. 

What to look out for: You'll need to become a member to qualify. This means you'll need to either be an employee of one of the businesses or organizations Alliant partners with, be a domestic partner or immediate family member of a current member, live or work in one of the eligible communities near the credit union's Chicago headquarters, or be a member of Foster Care to Success (Alliant will pay your $5 membership fee).

Best Online Lender for First-Time Homebuyers

Better Mortgage

Better Mortgage is an affordable lender and a good choice for borrowers who value a quick and convenient online application process. Better offers a preapproval that takes just a few minutes to complete and gives you the ability to easily see personalized rates without providing contact information.

What to look out for: Better has a B rating from the BBB due to complaints filed against the business. It also ranked below average in J.D. Power's 2022 customer satisfaction study.

Best for First-Time Homebuyers With Low Credit Scores

Carrington Mortgage Services

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. It also doesn't show its rates online.

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.

Best for Low Closing Costs for First-Time Homebuyers

Third Federal Savings and Loan

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 $295 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.

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.

Best for No Private Mortgage Insurance for First-Time Homebuyers

Truist

Truist is extremely affordable lender — particularly for first-time homebuyers, who often have less cash for a down payment. Its Community Homeownership Incentive Program (CHIP) offers between 97% and 100% financing with no PMI.

Homebuyers can potentially get a CHIP mortgage from Truist with as little as 0% down if they live in a qualifying area, or 3% down if they aren't in a qualifying area. Truist doesn't require private mortgage insurance on these loans. Normally, you have to pay for PMI if you make a down payment below 20%.

What to look out for: Truist lacks transparency when it comes to its rates and fees.

Best for Low Down Payments for First-Time Homebuyers

Rocket Mortgage

Rocket Mortgage is one of our favorite mortgage lenders thanks to its convenient online application process and strong customer service. Its ONE+ Mortgage combines a 1% down payment with a 2% grant, meaning borrowers can put very little down while also starting with some equity in the home.

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

How to Choose a Lender as a First-Time Homebuyer

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

Be sure to apply for preapproval with at least two or three 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. 

Other Mortgage Lenders We Considered for First-Time Homebuyers

We evaluated over two dozen mortgage lenders before picking our favorites. Here are the other lenders we looked at and reasons they didn't make the cut:

• Guaranteed Rate: This lender has an easy-to-use interface and lets you close digitally, but it doesn't have first-time homebuyer assistance like many of our top picks.
• Pentagon Federal Credit Union: If you have a 650 credit score, PenFed offers $500 to $2,500 in lender credit for all members, depending on how much you borrow. The credit union doesn't have FHA or USDA mortgages, though.
• USAA: USAA has a very limited selection of mortgages, with VA loans as its main focus.
• LoanDepot: LoanDepot is a solid lender, but it doesn't have features that set it apart from the crowd.
• Wells Fargo: The lender does have homebuyer assistance for lower-income buyers. However, Wells Fargo has had multiple public controversies over the past few years regarding claims of racist lending practices, creating fake bank accounts, and charging customers for insurance products they didn't sign up for. It has an F rating from the BBB.
• Caliber Home Loans: Caliber doesn't have any first-time homebuyer assistance programs.
• Fairway Independent Mortgage Corporation: This is a strong lender overall, but it doesn't have products geared toward first-time buyers like some of our top picks.
• Veterans United: Veterans United offers several types of mortgages, not just VA mortgages. But it doesn't have any programs for first-time buyers.
• CMG Financial: CMG has unique grant opportunities and mortgages. They could be good options, but these programs aren't for everyone.
• Freedom Mortgage: This is a good lender if you have a low credit score, but you can't fill out an application online.
• Flagstar Bank: This lender offers several types of home loans, but it doesn't have the same impressive standout features as the lenders that made our list.
• Movement Mortgage: Movement Mortgage boasts a speedy application process, but it doesn't have any homebuyer assistance programs.
• Ally: Ally has a convenient online process, but it only offers conventional mortgages.
• NBKC Bank: NBKC is an overall good mortgage lender, but you'll need a good credit score.
• PNC Bank: PNC's offerings aren't as strong as what you can get from the lenders we picked.

Additional Resources and Programs for First-Time Homebuyers

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.

You could receive assistance if you buy a home that needs major renovations, including a Fannie Mae HomeStyle loan, Freddie Mac CHOICERenovation loan, FHA 203(k) loan, and the Energy Efficient Mortgage program.

You may qualify for the Department of Housing and Urban Development's Good Neighbor Next Door program if you're a teacher, firefighter, law enforcement officer, or emergency medical responder who lives in a "revitalization area."

Go to the Good Neighbor Next Door website to search for homes in your area. Homes are listed for seven days, and you can purchase one for 50% off the listed price.

The Native American Direct Loan is for Native American military veterans, and it's issued through the VA. You don't need money for a down payment, and you won't pay private mortgage insurance.

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

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 Personal Finance 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, Personal Finance 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, Personal Finance 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, Personal Finance 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 November 2023, we looked at four main factors:

• Loan types. Did a lender offer several types of loans to suit customers' needs, such as conventional loans (including conforming and jumbo) and government-backed loans?
• Customer satisfaction. If the lender appeared in the J.D. Power 2022 Primary Mortgage Origination Satisfaction Survey, we looked at its ranking. If it wasn't in the survey, then we read online customer reviews.
• Affordability. We looked at lenders' minimum credit scores and down payment amounts. We also checked whether they offer government-backed loans, which can be more affordable for borrowers with less-than-perfect financial profiles. Finally, we 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. Most of our top picks have features that benefit first-time buyers, and those that don't made the list because they thrived in other criteria.

See our full methodology for evaluating mortgage lenders »