First-Time Home Buyer

It’s really easy to look at the term “first-time home buyer” and think, “Well duh, that’s a person buying a house for the first time.” And yes, that is one of the types of buyers that is considered a first-time home buyer by HUD, the U.S. Department of Housing and Urban Development. (Whew, we can see why they just call it “HUD.” That’s a mouthful.)

Anyway, a person who has not bought a primary residence within the last three years is also considered a first-time home buyer. And we say “primary,” because rental homes and Flip or Flop-type real estate purchasing scenarios don’t count. In addition, single parents or otherwise displaced people who lived in a house owned with or by a spouse are first-time home buyers, as are people who own property that isn’t up to code and can’t feasibly be brought up to code. Mobile home owners, or anyone who owns a residence that isn’t attached to an actual foundation, are also considered first-time home buyers.

In other words, the term “first-time home buyer” is, like baking a souffle, a lot more complicated than it appears on the surface.

So why are these details so important? Because first-time home buyers are eligible for all kinds of grants, tax incentives, and other government programs that can help them buy a new home. FHA loans, offered by the Federal Housing Administration, often come with little goodies like lower closing costs, smaller down payments (like, say, 3% versus 10%, which can be yuuuge), and decent interest rates. So even if we’re not in the market to buy our first house ever, it’s worth finding out if we’re still considered a first-time home buyer.