Who counts as a first-time home buyer
Most people assume it means never having owned a home. Most programs are more generous: you qualify if you haven’t owned a home you lived in during the past three years. Someone who sold in 2022 and has rented since is a first-time buyer again.
The definitions differ
- HUD (used by FHA and most assistance programs): no ownership of a principal residence in three years. It also includes single parents and displaced homemakers who only owned with a spouse, and people who only owned a manufactured home not fixed to a permanent foundation.
- State housing agencies: the same three-year rule, usually for everyone on the loan and their spouses. States can waive it for veterans and in targeted areas.
- Fannie Mae and Freddie Mac: no ownership of any residential property in three years, so a rental counts against you. Only one borrower needs to qualify.
- The IRS, for IRA withdrawals: no main home in the past two years, for you and your spouse.
What the status gets you
Down payment assistance and grants, state agency loans with lower rates, mortgage credit certificates, 3%-down conventional loans, reduced fees on some conventional loans, and up to $10,000 from an IRA without the 10% penalty.
What it doesn’t affect
FHA, VA and USDA loans are open to repeat buyers. Find programs where you’re buying with the down payment assistance finder, and see the whole process in the first-time home buyer roadmap.
Questions buyers ask
What counts as a first-time home buyer?
For most programs, anyone who hasn’t owned a home they lived in during the past three years. Some definitions also include certain single parents and displaced homemakers.
Am I a first-time buyer if my spouse has owned a home?
It depends on the program. HUD’s definition can count a couple if either spouse meets the three-year test, but many state programs require both spouses to meet it.
Can I be a first-time buyer if I own a rental property?
Under HUD’s definition, often yes, because it looks only at homes you lived in. Fannie Mae and Freddie Mac count any residential property owned in the past three years.