A first-time home buyer is any person who hasn't owned a home in the last 3 years.

A Longer Definition: First-Time Home Buyer

A first-time home buyer is, broadly, someone who hasn't owned their home within the last 3 years. First-time home buyers can include renters, children, single parents, displaced homemakers, investors, and people living rent-free.

The three-year period is backward-looking, based on the buyer's settlement date.

First-time home buyers represent 45 percent of the home purchase market and get access to special first-time home buyer programs that make homeownership affordable and attainable, including low downpayment mortgages, loans with lower mortgage rates, and closing cost assistance programs.

There are seven groups of people that qualify as first-time home buyers, according to federal law and the government agencies supporting first-time buyer mortgages.

Renters

The truest definition of first-time home buyer: if you've never owned a home, you are eligible as a first-time home buyer.

Homeowners returning after a gap

If you owned a home in the past but haven't owned one in the last three years, you are eligible as a first-time home buyer. Returning after a 3-year gap allows you to re-enter the market with first-time buyer benefits.

Investment property owners

Owning an investment property doesn't disqualify you from being a first-time home buyer. If you rent your primary residence and haven't owned your main home in the last three years, you are a first-time home buyer.

Single parents re-entering the workforce

If you're a single parent who previously owned a home with your former spouse, you're eligible as a first-time home buyer. This is true even if your name was on the deed or mortgage.

Family caregivers who left the workforce

If you left your job to care for a family member without pay, you may be eligible to buy a home as a first-time home buyer.

Mobile home owners

If you own a mobile home on a foundation that is not permanently attached, you can be considered a first-time home buyer. This includes homes that are movable or temporary.

Homeowners with structurally unsound homes

If you previously owned a home that failed safety tests and the cost of repairs exceeded its value, you're eligible as a first-time home buyer. This scenario often involves older or damaged properties.

First-Time Home Buyer: A Real World Example

Imagine a person who, 10 years ago, bought their first home using a first-time home buyer program. Then, a few years later, they moved across the country for work and rented an apartment in the city.

Now, they're ready to return home and want to own again.

Despite their previous purchase, they qualify as a first-time home buyer because they haven't owned a home in the past three years. They explore low-downpayment mortgage programs and find a 97% loan-to-value conventional mortgage with low rates plus cash grants from the local government exclusively for first-time buyers - all of which makes buying a home affordable and attainable.

Common Questions About First-Time Home Buyers

Can you be considered a first-time home buyer if you've previously owned a home?

Yes, if you owned a home in the past and haven't owned a home in the past three years, you are eligible as a first-time home buyer.

Are there special mortgages for first-time home buyers?

Yes, first-time buyers get access to special mortgages for first that other buyers can't, such as the Conventional 97, which is a 3% down payment conventional mortgage.

If two people apply for a mortgage, do they both have to be first-time buyers to use a first-time buyer program?

Yes, when there are two home buyers, both must qualify as first-time home buyers in order to use a first-time home buyer mortgage program or benefit. The most obvious example is when two spouses buy a home when one spouse has never owned a home previously. The IRS ruled on this in 2010.

I owned a home with my former spouse while we were married. It's the only home I ever owned. I'm going back into the workforce.

You are a first-time home buyer for this purchase because, by government definition, you qualify as a displaced homemaker.

What is a first-generation home buyer?

A first-generation home buyer is a first-time buyer whose parents have never owned a home. First-generation home buyers get exclusive access to the $25,000 Downpayment Toward Equity Act.