First-time home buyer financing in Sacramento

February 24, 2025
Aaron Clowes
Mortgage News

First-Time Home Buyer Financing in Sacramento: Your Complete Guide

Welcome to First-Time Home Buyer Financing in Sacramento! 🎉

Are you looking for first-time home buyer financing in Sacramento? If so, you’re in the right place! Buying your first home is exciting, but let’s be honest—it can also feel overwhelming. Between loans, down payments, and mortgage requirements, there’s a lot to navigate.

The good news? There are several financing options available in Sacramento for first-time buyers, including FHA, VA, and USDA loans, as well as state and local assistance programs. This guide will break everything down, so you can confidently take the next step toward homeownership.

Let’s explore the best home financing options for first-time buyers in Sacramento!

Why Sacramento Is a Great Market for First-Time Buyers

If you’re considering first-time home buyer financing in Sacramento, you’ll be happy to know that this city is a fantastic place to buy a home. Here’s why:

✅ More affordable than the Bay Area – Home prices are lower than in San Francisco or San Jose.
✅ Growing job market – Sacramento offers strong career opportunities in government, healthcare, and tech.
✅ Great communities – The city has family-friendly neighborhoods, excellent schools, and plenty of outdoor activities.
✅ Home values are rising – A home purchased today is likely to increase in value over time.

With the right home buyer financing in Sacramento, you can take advantage of these benefits and find a home that fits your budget.

Who Qualifies for First-Time Home Buyer Financing in Sacramento?

Not sure if you qualify? You may be considered a first-time home buyer even if you’ve owned before. You’re eligible if:

✔ You haven’t owned a home in the last three years.
✔ You’re a single parent who previously owned a home with an ex-spouse.
✔ You owned an investment property but never lived in it as your primary residence.

Basic Requirements for First-Time Home Buyer Loans:

Credit Score: Minimum 580 for FHA, 620 for conventional loans.
Debt-to-Income Ratio (DTI): Generally below 43%, though some loans allow higher.
Income Limits: Some assistance programs have income restrictions, but many don’t.

Now, let’s look at the best first-time home buyer financing options in Sacramento!

Best Financing Options for First-Time Home Buyers in Sacramento

If you’re searching for first-time home buyer financing in Sacramento, these loan programs can help you purchase a home:

1. FHA Loans: A Top Choice for First-Time Buyers

✅ Low 3.5% down payment (available with a 580 credit score)
✅ Easier credit and income requirements than conventional loans
✅ Requires mortgage insurance

2. Conventional Loans with Low Down Payment

✅ 3% down payment options through Fannie Mae’s HomeReady and Freddie Mac’s Home Possible
✅ No upfront mortgage insurance, unlike FHA loans
✅ PMI can be removed after reaching 20% equity

3. VA Loans: The Best Loan for Military Members

✅ $0 down payment – No need to save for a down payment
✅ No mortgage insurance – Lower monthly costs
✅ Must meet military service requirements

4. USDA Loans: Ideal for Suburban & Rural Buyers

✅ $0 down payment – Great for buyers with limited savings
✅ Available for USDA-eligible areas
✅ Lower mortgage insurance costs than FHA loans

5. CalHFA First-Time Home Buyer Financing in Sacramento

California Housing Finance Agency (CalHFA) offers great programs, including:

MyHome Assistance Program – Provides a deferred-payment loan to help with down payments.
ZIP Extra Loan – Offers zero-interest financing to assist with closing costs.

If you’re a first-time buyer, you may qualify for one of these CalHFA financing programs in Sacramento!

How to Get Down Payment Assistance in Sacramento

Saving for a down payment? Sacramento has several down payment assistance (DPA) programs to help first-time buyers:

🏡 Sacramento Housing and Redevelopment Agency (SHRA) Grants
🏡 Employer-Assisted Housing Programs
🏡 California Dream for All Program (shared appreciation loan)

These programs can help cover your down payment or closing costs, making it easier to afford a home.

How Much House Can You Afford?

Before applying for home financing in Sacramento, it’s important to know your budget. Follow these steps:

1️⃣ Use the 28/36 Rule – Keep housing costs under 28% of your income and total debt under 36%.
2️⃣ Estimate Your Monthly Mortgage Payment – Include taxes, insurance, and HOA fees.
3️⃣ Get Preapproved – A lender will tell you exactly how much home you can afford.

The Mortgage Preapproval Process: Why It’s Crucial

Getting preapproved is an important step in buying your first home. Here’s why:

✔ Sellers take your offer seriously – Preapproval makes you a stronger buyer.
✔ You know your exact budget – No wasted time looking at homes you can’t afford.
✔ Locks in a potential interest rate – Helps you avoid unexpected rate increases.

👉 Start your mortgage preapproval today! Apply HERE.

Closing Costs: What First-Time Buyers Need to Know

In addition to your down payment, expect to pay closing costs (typically 2% to 5% of the home price). These fees include:

💰 Loan origination fees
💰 Appraisal and home inspection costs
💰 Title and escrow fees

🔹 Tip: Some first-time buyer programs can help cover closing costs, or you can negotiate with the seller to pay some fees.

Common First-Time Buyer Mistakes (and How to Avoid Them!)

🚫 Not getting preapproved before house hunting
🚫 Underestimating hidden costs (property taxes, maintenance, HOA fees)
🚫 Choosing the wrong mortgage loan

Why Work with a Mortgage Broker?

If you’re new to the home buying process, a mortgage broker can make it easier!

✔ Compare multiple loan options and find the best interest rates
✔ Help with paperwork & preapproval
✔ Save time and money by avoiding common mistakes

We’d love to help you find the best first-time home buyer financing in Sacramento!

Ready to Buy Your First Home? Let’s Talk!

🏡 Get preapproved now: Apply Here
📞 Call or text us: 916-465-6639
📧 Email us: hello@newwaymortgage.com
📅 Schedule a free consultation: HERE

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