FHA Loan

• The Federal Housing Administration provides mortgage insurance that allows lenders to ease their qualifying requirements to obtain a home loan. This allows first-time home buyers to easily qualify for a loan. Most lenders will require the home buyer to have a credit score between 620 and 640 to qualify. FHA loans have lower out-of-pocket costs. The down payment requirement is 3.5 percent of the home's sales price. The closing costs may even be structured into the monthly mortgage payment.
  
  

Good Neighbor Next Door Program

• HUD's Good Neighbor Next Door Program provides a 50 percent discount on the sales price of a HUD home to fire fighters, law enforcement officers, teachers and emergency medical technicians. The home must be located in a HUD-designated revitalization area of the country. The goal of the program is to eliminate slum and blight in a neighborhood through homeownership. The home buyer must agree to keep the home as his primary place of residence for three years to get the 50 percent discount.
  
  

Neighborhood Stabilization Program

• Funded under the American Recovery and Reinvestment Act of 2009, the Neighborhood Stabilization Programs provides grants to states, local governments, and non-profit organizations to purchase foreclosed or abandoned homes. The homes can be remodeled and re-sold at an affordable price. The home can also be demolished and a new one can be constructed. These homes must be made available to low-to-moderate income families. The NSP funds can also be used to help pay the down payment and closing costs of a loan.
  
  

Homeownership Voucher Program

• Section 8 voucher holders may be eligible to convert their rental assistance payment into a mortgage subsidy. The homeowner is responsible for paying 30 percent of her income toward the rent, and HUD pays the remaining portion. To qualify for this homebuying program, the applicant must have a steady source of income that does not include welfare benefits, and have been employed for at least one year. She must be a first-time homebuyer and be able to qualify for a home loan with a lender. The homebuyer is required to attend homeownership education classes to be eligible for a Homeownership Voucher.