Yahoo Finance Best and Worst States for First-Time Homebuyers
Buying a home is known as the American dream, but many Americans remain waiting to buy that first property, discouraged by home prices, higher interest rates and the lack of savings for a down payment.
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But maybe they haven’t investigated just what assistance their states can offer first-time homebuyers. Depending on where they live, homebuyers could tap into loan programs that offer attractive interest rates, as well as assistance with down payments and closing costs that make buying a home achievable.
Of course, the offerings and rules vary by state. In general, however, the states tend to have minimum credit score requirements, earnings limits and some special conditions about where the property is located.
To see which states offer the best financing options for first-time homebuyers, GOBankingRates ranked the 50 states based on three factors: the yearly mortgage for a typical single-family home, as determined by Zillow in June 2023 and assuming a 6% down payment; the current interest rate on a 30-year, fixed loan as sourced from the St. Louis Federal Reserve; and estimated property taxes, as sourced from the Tax Foundation.
For additional information, GOBankingRates also used the costs of buying a two-bedroom single-family home, which might appeal to first-time buyers and the foreclosure rates in each state, as sourced from SoFi for June 2023.
Where does your state rank in terms of being affordable for first-time homebuyers?
Hawaii
2023 home value for typical SFR: $962,201
6% down payment: $57,732
Monthly mortgage payment for typical SFR: $6,151
2023 home value for two-bedroom SFR: $619,691
6% down payment: $37,181
Monthly mortgage payment for two-bedroom SFR: $3,961
Foreclosure rate: 1 out of 4,455 homes
Hawaii easily takes first place for the most expensive housing in the U.S. If you’re looking to buy your first home in Hawaii, some help might be available.
Hawaiian first-time homebuyers can apply for the Down Payment Assistance Loan program offered through the Hawaii HomeOwnership Center.
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California
2023 home value for typical SFR: $756,842
6% down payment: $45,411
Monthly mortgage payment for typical SFR: $5,103
2023 home value for two-bedroom SFR: $613,528
6% down payment: $36,812
Monthly mortgage payment for two-bedroom SFR: $4,137
Foreclosure rate: 1 out of 3.982 homes
With the second-costliest real estate in the nation, California isn’t an easy market for first-time buyers.
Still, you can apply for the CalPLUS Conventional Program and CalHFA Zero Interest Program CalPLUS FHA Program to help manage home-buying costs. The latter is for closing costs.
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New Jersey
2023 home value for typical SFR: $491,482
6% down payment: $29,489
Monthly mortgage payment for typical SFR: $3,920
2023 home value for two-bedroom SFR: $344,896
6% down payment: $20,694
Monthly mortgage payment for two-bedroom SFR: $2,751
Foreclosure rate: 1 out of 2,189 homes
The value of a typical single-family residence in New Jersey is almost a half-million dollars, giving the state the ninth-highest price. That doesn’t make it easy for first-time homebuyers.
New Jersey does have assistance available for first-time homebuyers. The Homeward Bound Mortgage Program has a 30-year, fixed-rate government-insured loan for qualified applicants.
It can be used in conjunction with the state’s Down Payment Assistance Program, which provides either $10,000 or $15,000 toward closing costs and/or a down payment, depending on the location of the property.
Best of all, the down payment loan is forgiven if the homebuyer lives in the property for five years and doesn’t refinance the mortgage.
Massachusetts
2023 home value for typical SFR: $600,478
6% down payment: $36,029
Monthly mortgage payment for typical SFR: $4,254
2023 home value for two-bedroom SFR: $461,304
6% down payment: $27,678
Monthly mortgage payment for two-bedroom SFR: $3,268
Foreclosure rate: 1 out of 4,325 homes
Typical single-family homes in Massachusetts hit the $600,000 mark in June, and homebuyers likely would welcome assistance. MassHousing says it provides about $700 million annually to about a combined 3,000 buyers each year through loans and down payment assistance.
Maryland
2023 home value for typical SFR: $409,144
6% down payment: $24,549
Monthly mortgage payment for typical SFR: $2,864
2023 home value for two-bedroom SFR: $266,921
6% down payment: $16,015
Monthly mortgage payment for two-bedroom SFR: $1,869
Foreclosure rate: 1 out of 1,733 homes
Housing costs aren’t cheap in Maryland, with the typical single-family home valued at about $400,000.
First-time homebuyers in Maryland can take advantage of several loan products provided by the state Department of Housing and Community Development through the Maryland Mortgage Program. Offerings include a 30-year, fixed-rate mortgage with down payment assistance.
Connecticut
2023 home value for typical SFR: $393,424
6% down payment: $23,605
Monthly mortgage payment for typical SFR: $2,990
2023 home value for two-bedroom SFR: $267,477
6% down payment: $16,049
Monthly mortgage payment for two-bedroom SFR: $2,033
Foreclosure rate: 1 out of 2,272 homes
First-time homebuyer programs can help alleviate the burden of Connecticut’s cost of living. The Connecticut Housing Finance Authority offers a range of home loan products that first-time homebuyers can take advantage of, including its conventional homebuyer mortgage program and assistance with down payments and closing costs.
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Washington
2023 home value for typical SFR: $589,647
6% down payment: $35,379
Monthly mortgage payment for typical SFR: $4,050
2023 home value for two-bedroom SFR: $451,432
6% down payment: $27,086
Monthly mortgage payment for two-bedroom SFR: $3,100
Foreclosure rate: 1 out of 9,816 homes
At the start of 2019, Washington’s median sales price sat right about $400,000, according to Redfin. Now, the typical home has a value approaching $600,000.
First-time homebuyers would benefit from checking out the state’s Home Advantage and House Key Opportunity programs, which connect purchasers with mortgage providers, or the down payment assistance offering.
Florida
2023 home value for typical SFR: $404,754
6% down payment: $24,285
Monthly mortgage payment for typical SFR: $2,790
2023 home value for two-bedroom SFR: $293,027
6% down payment: $17,582
Monthly mortgage payment for two-bedroom SFR: $2,020
Foreclosure rate: 1 out of 2,470 homes
In terms of foreclosures, Florida is among the worst states to buy a home. If you’re a first-time homebuyer in Florida, check out the state’s homebuyer program to see if you qualify, as well as its down payment assistance program.
As with other states, the repayment on down payments can be deferred during the life of the mortgage. It’s worth a look since you might need all the assistance you can get to make your paycheck stretch further.
Delaware
2023 home value for typical SFR: $359,870
6% down payment: $21,592
Monthly mortgage payment for typical SFR: $2,385
2023 home value for two-bedroom SFR: $243,519
6% down payment: $14,611
Monthly mortgage payment for two-bedroom SFR: $1,614
Foreclosure rate: 1 out of 2,171 homes
Foreclosure rates in Delaware are among the highest in the country, but first-time homebuyers can get some financial help. A first-time homebuyer tax credit can give homebuyers a tax reduction of up to $2,000.
In June, the Delaware State Housing Authority introduced four programs to spur home ownership, assisting with both mortgage loans and down payments.
Nevada
2023 home value for typical SFR: $432,328
6% down payment: $25,940
Monthly mortgage payment for typical SFR: $2,868
2023 home value for two-bedroom SFR: $305,348
6% down payment: $18,321
Monthly mortgage payment for two-bedroom SFR: $2,026
Foreclosure rate: 1 out of 3,097 homes
Nevada’s median home price was a tick under $300,000 five years ago, according to Redfin. That means home values have increased by almost 50% in that time, making it tougher to buy a house.
The Nevada Housing Division offers home financing through its Home Is Possible programs, which provide money for down payment or closing costs. The assistance is forgivable after seven years, provided you stay in that home.
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Colorado
2023 home value for typical SFR: $552,545
6% down payment: $33,153
Monthly mortgage payment for typical SFR: $3,638
2023 home value for two-bedroom SFR: $419,492
6% down payment: $25,170
Monthly mortgage payment for two-bedroom SFR: $2,762
Foreclosure rate: 1 out of 9,059 homes
With typical single-family homes selling for about $550,000 in Colorado, programs through the Colorado Housing and Finance Authority can assist with both first and second mortgages to make affordability easier.
New Hampshire
2023 home value for typical SFR: $460,192
6% down payment: $27,611
Monthly mortgage payment for typical SFR: $3,575
2023 home value for two-bedroom SFR: $346,649
6% down payment: $20,799
Monthly mortgage payment for two-bedroom SFR: $2,693
Foreclosure rate: 1 out of 7,858 homes
Homebuyers can get assistance through New Hampshire Housing, which offers a number of homebuying programs. Buyers can review the state’s offerings for 30-year fixed rates, low or no down payment loans and options to reduce mortgage insurance.
New York
2023 home value for typical SFR: $414,932
6% down payment: $24,896
Monthly mortgage payment for typical SFR: $3,023
2023 home value for two-bedroom SFR: $290,530
6% down payment: $17,432
Monthly mortgage payment for two-bedroom SFR: $2,116
Foreclosure rate: 1 out of 3,631 homes
Although housing can get costly in some regions of the state, New York offers more affordable markets than the neighboring New England states.
The State of New York Mortgage Assistance program offers a variety of help for first-time buyers. Help comes in the form of competitive mortgage programs, down payment assistance, loans for remodels and more.
Utah
2023 home value for typical SFR: $520,095
6% down payment: $31,206
Monthly mortgage payment for typical SFR: $3,446
2023 home value for two-bedroom SFR: $377,601
6% down payment: $22,656
Monthly mortgage payment for two-bedroom SFR: $2,502
Foreclosure rate: 1 out of 6,030 homes
The Utah Housing Corp. can introduce prospective homebuyers to a variety of loans, and the best loan will depend on everything from credit score and income to where the home is located within the state. Down payment assistance is available to qualified buyers.
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Oregon
2023 home value for typical SFR: $502,884
6% down payment: $30,173
Monthly mortgage payment for typical SFR: $3,479
2023 home value for two-bedroom SFR: $382,864
6% down payment: $22,972
Monthly mortgage payment for two-bedroom SFR: $2,649
Foreclosure rate: 1 out of 7,622 homes
To make buying a home more achievable in the pricey state, the Oregon Housing and Community Services Agency has a residential loan program that offers mortgage options with affordable 30-year fixed interest rates with even no money down.
Rhode Island
2023 home value for typical SFR: $436,824
6% down payment: $26,209
Monthly mortgage payment for typical SFR: $3,200
2023 home value for two-bedroom SFR: $352,288
6% down payment: $21,137
Monthly mortgage payment for two-bedroom SFR: $2,581
Foreclosure rate: 1 out of 5,797 homes
The value of a typical single-family residence in Rhode Island is about $80,000 above the national average, so getting an affordable home loan is important. Rhode Island Housing’s offerings include the Down Payment Assistance Program for first-time homebuyers. With the grant, homebuyers can receive $17,500 in aid that doesn’t need to be repaid.
Maine
2023 home value for typical SFR: $371,099
6% down payment: $22,266
Monthly mortgage payment for typical SFR: $2,663
2023 home value for two-bedroom SFR: $330,307
6% down payment: $19,818
Monthly mortgage payment for two-bedroom SFR: $2,370
Foreclosure rate: 1 out of 4,554 homes
Looking at housing affordability by state, Maine’s typical single-family residence value is appealing for a New England state, costing about $20,000 over the U.S. median. Maine homebuyers can apply to the First Home Loan Program, which has low fixed-rate mortgages that qualified applicants can get with little or no money down.
Illinois
2023 home value for typical SFR: $250,086
6% down payment: $15,005
Monthly mortgage payment for typical SFR: $1,961
2023 home value for two-bedroom SFR: $196,428
6% down payment: $11,786
Monthly mortgage payment for two-bedroom SFR: $1,541
Foreclosure rate: 1 out of 2,348 homes
The Illinois Housing Development Authority’s HFA1 program has a 30-year first mortgage with a fixed interest rate. But it also includes a no-interest second mortgage for $10,000 that doesn’t need to be repaid as long as the mortgage is active.
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Idaho
2023 home value for typical SFR: $441,362
6% down payment: $26,482
Monthly mortgage payment for typical SFR: $2,965
2023 home value for two-bedroom SFR: $339,071
6% down payment: $20,344
Monthly mortgage payment for two-bedroom SFR: $2,278
Foreclosure rate: 1 out of 5.378 homes
The Idaho Housing and Finance Association offers several mortgage products, including conventional loans, Rural Development loans in rural areas, FHA loans and VA loans. Loans for help with down payments and closing costs also are available.
Arizona
2023 home value for typical SFR: $430,157
6% down payment: $25,809
Monthly mortgage payment for typical SFR: $2,872
2023 home value for two-bedroom SFR: $340,391
6% down payment: $20,423
Monthly mortgage payment for two-bedroom SFR: $2,272
Foreclosure rate: 1 out of 6,885 homes
In Arizona, the HOME+PLUS program assists buyers with down payments and closing costs. Buyers can take advantage of a 30-year fixed-rate mortgage, combined with down payment assistance of up to 5%.
South Carolina
2023 home value for typical SFR: $286,933
6% down payment: $17,216
Monthly mortgage payment for typical SFR: $1,894
2023 home value for two-bedroom SFR: $209,677
6% down payment: $12,581
Monthly mortgage payment for two-bedroom SFR: $1,384
Foreclosure rate: 1 out of 2,533 homes
South Carolina’s typical home value is well below the U.S. typical home value of $350,213, according to Zillow statistics. Still, South Carolina has one of the highest foreclosure rates in the study.
Low- to moderate-income buyers in South Carolina can apply for a state-offered fixed-interest mortgage loan. The South Carolina State Housing Finance and Development Authority also offers down payment assistance that can help with closing costs. For borrowers who stay in their homes for 15 years, the down payment loan is 100% forgiven.
Montana
2023 home value for typical SFR: $437,657
6% down payment: $26,259
Monthly mortgage payment for typical SFR: $2,958
2023 home value for two-bedroom SFR: $331,801
6% down payment: $19,908
Monthly mortgage payment for two-bedroom SFR: $2,243
Foreclosure rate: 1 out of 10,251 homes
Montana has one of the lowest foreclosure rates, which bodes well for first-time homebuyers. In the state, first-time homebuyers are eligible for the 80% Combined Program offered by Montana Housing, eliminating the need for private mortgage insurance.
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Minnesota
2023 home value for typical SFR: $332,831
6% down payment: $19,970
Monthly mortgage payment for typical SFR: $2,347
2023 home value for two-bedroom SFR: $258,981
6% down payment: $15,539
Monthly mortgage payment for two-bedroom SFR: $1,826
Foreclosure rate: 1 out of 5,158 homes
Minnesota’s Start Up and Step Up programs offer affordable interest rates for mortgage loans, as well as options for down payment and closing cost assistance.
Georgia
2023 home value for typical SFR: $317,861
6% down payment: $19,072
Monthly mortgage payment for typical SFR: $2,191
2023 home value for two-bedroom SFR: $222,096
6% down payment: $13,326
Monthly mortgage payment for two-bedroom SFR: $1,531
Foreclosure rate: 1 out of 3,999 homes
The Georgia Dream program is designed to help low- and moderate-income Georgia residents with affordable options to buy their first home in certain specified areas only. Down payment assistance also is available to qualified buyers.
Virginia
2023 home value for typical SFR: $370,966
6% down payment: $22,258
Monthly mortgage payment for typical SFR: $2,545
2023 home value for two-bedroom SFR: $251,634
6% down payment: $15,098
Monthly mortgage payment for two-bedroom SFR: $1,726
Foreclosure rate: 1 out of 5,663 homes
Virginia homes have a price tag slightly above the typical home in the U.S. Fortunately, first-time homebuyers have financing options in the state, like the Down Payment Assistance Program.
Vermont
2023 home value for typical SFR: $376,322
6% down payment: $22,579
Monthly mortgage payment for typical SFR: $2,879
2023 home value for two-bedroom SFR: $309,119
6% down payment: $18,547
Monthly mortgage payment for two-bedroom SFR: $2,365
Foreclosure rate: 1 out of 30,320 homes
Tiny Vermont has a minuscule foreclosure rate, with only one in 30,000 homes in the state in foreclosure.
For those who want to buy their first home in Vermont, the Vermont Housing Finance Agency has several programs that are open to qualifying first-time homebuyers, including low-interest mortgage loans, help with down payments and closing costs, and tax credits.
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North Carolina
2023 home value for typical SFR: $317,296
6% down payment: $19,038
Monthly mortgage payment for typical SFR: $2,163
2023 home value for two-bedroom SFR: $217,805
6% down payment: $13,068
Monthly mortgage payment for two-bedroom SFR: $1,485
Foreclosure rate: 1 out of 4,245 homes
Two North Carolina cities — Fayetteville and Greensboro — ranked among the top 25 cities for first-time homebuyers in a 2023 GOBankingRates study.
First-time homebuyers can apply for the NC Home Advantage Mortgage Program, which can assist with fixed-rate mortgages and help with a down payment, of up to 3% of the loan. A separate program — the NC 1st Home Advantage Down Payment — provides a $15,000 down payment loan that is fully forgiven after 15 years. Additionally, some buyers could be eligible for a tax credit of up to $2,000 yearly.
Alaska
2023 home value for typical SFR: $360,788
6% down payment: $21,647
Monthly mortgage payment for typical SFR: $2,520
2023 home value for two-bedroom SFR: $243,427
6% down payment: $14,606
Monthly mortgage payment for two-bedroom SFR: $1,700
Foreclosure rate: 1 out of 6,719 homes
Alaska has two programs to support first-time homebuyers: First Home and First Home Limited. Of the two, the latter offers lower interest rates to qualified first-time buyers.
New Mexico
2023 home value for typical SFR: $289,501
6% down payment: $17,370
Monthly mortgage payment for typical SFR: $1,935
2023 home value for two-bedroom SFR: $239,742
6% down payment: $14,385
Monthly mortgage payment for two-bedroom SFR: $1,603
Foreclosure rate: 1 out of 4,464 homes
First-time homebuyers will like New Mexico’s typical single-family home value, which falls below the national number.
First-time homebuyers can apply for New Mexico’s FirstHome, FirstDown and HomeNow programs. The first two are mortgage loans for people who haven’t owned a home in at least three years. HomeNow offers down payment help to buyers who meet income requirements.
Texas
2023 home value for typical SFR: $304,636
6% down payment: $18,278
Monthly mortgage payment for typical SFR: $2,290
2023 home value for two-bedroom SFR: $189,540
6% down payment: $11,372
Monthly mortgage payment for two-bedroom SFR: $1,425
Foreclosure rate: 1 out of 4,997 homes
GOBankingRates’ study of the 25 Best Cities for First-Time Homebuyers turned up five Texas locations: San Antonio, Corpus Christi, El Paso, Lubbock and Brownsville.
The state offers help for first-time buyers, too, through My First Texas Home, offered by the Texas Department of Housing and Community Affairs. It provides mortgage loans and help with down payments and/or closing costs to those who qualify.
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Ohio
2023 home value for typical SFR: $216,770
6% down payment: $13,006
Monthly mortgage payment for typical SFR: $1,615
2023 home value for two-bedroom SFR: $147,115
6% down payment: $8,827
Monthly mortgage payment for two-bedroom SFR: $1,096
Foreclosure rate: 1 out of 3,073 homes
First-time homebuyers will like the typical home price of $216,770, which comes with a 6% down payment of about $13,000. They can get help with that down payment through the Ohio Housing Finance Agency, which also offers first-time homebuyer loan options.
Pennsylvania
2023 home value for typical SFR: $253,030
6% down payment: $15,182
Monthly mortgage payment for typical SFR: $1,866
2023 home value for two-bedroom SFR: $188,280
6% down payment: $11,297
Monthly mortgage payment for two-bedroom SFR: $1,389
Foreclosure rate: 1 out of 4,191 homes
In terms of financing, first-time homebuyers can apply for a loan through the Pennsylvania Housing Finance Agency. In addition to competitive interest rates and lower fees, homebuyers potentially can receive assistance with the down payment and closing costs.
Michigan
2023 home value for typical SFR: $229,041
6% down payment: $13,742
Monthly mortgage payment for typical SFR: $1,668
2023 home value for two-bedroom SFR: $177,579
6% down payment: $10,655
Monthly mortgage payment for two-bedroom SFR: $1,294
Foreclosure rate: 1 out of 3,857 homes
First-time homebuyers are eligible for Michigan State Housing Development Authority’s MI Home Loan program, which includes down payment assistance of up to $10,000.
Wyoming
2023 home value for typical SFR: $331,316
6% down payment: $19,879
Monthly mortgage payment for typical SFR: $2,187
2023 home value for two-bedroom SFR: $245,749
6% down payment: $14,745
Monthly mortgage payment for two-bedroom SFR: $1,622
Foreclosure rate: 1 out of 7,551 homes
The Wyoming Community Development Authority offers loan programs for first-time homebuyers, such as its First-Time Homebuyer Program and Spruce Up Wyoming Programs, the latter of which finances costs to purchase and rehabilitate substandard housing.
A down payment assistance program also is available, with repayment deferred as long as the original mortgage is active.
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Indiana
2023 home value for typical SFR: $227,753
6% down payment: $13,665
Monthly mortgage payment for typical SFR: $1,557
2023 home value for two-bedroom SFR: $145,058
6% down payment: $8,703
Monthly mortgage payment for two-bedroom SFR: $991
Foreclosure rate: 1 out of 3,312 homes
Indianapolis and Fort Wayne made GOBankingRates’ list of 25 Best Cities for First-Time Homebuyers, and they undoubtedly were buoyed by financial opportunities offered via the Indiana Housing and Community Development Authority.
The First Place program can provide help with mortgage loans and down payments, and federal tax credits are possible through the Mortgage Credit Certificate.
Alabama
2023 home value for typical SFR: $218,126
6% down payment: $13,088
Monthly mortgage payment for typical SFR: $1,409
2023 home value for two-bedroom SFR: $149,409
6% down payment: $8,965
Monthly mortgage payment for two-bedroom SFR: $965
Foreclosure rate: 1 out of 3,452 homes
Alabama’s typical single-family residence costs more than $125,000 less than the national typical value, which is a boon for first-time homebuyers. Alabama first-timers can apply for the Step Up mortgage program if their annual household income doesn’t exceed $130,600, according to the Alabama Housing Finance Authority.
Wisconsin
2023 home value for typical SFR: $283,886
6% down payment: $17,033
Monthly mortgage payment for typical SFR: $2,127
2023 home value for two-bedroom SFR: $214,101
6% down payment: $12,846
Monthly mortgage payment for two-bedroom SFR: $1,604
Foreclosure rate: 1 out of 9,640 homes
Wisconsin’s typical single-family home value is about $65,000 cheaper than the U.S. typical value, and when it comes to affordable mortgage solutions, the Wisconsin Housing and Economic Development Authority offers several home loan programs with income and loan limits that allow for more borrowers to qualify.
Nebraska
2023 home value for typical SFR: $251,206
6% down payment: $15,072
Monthly mortgage payment for typical SFR: $1,878
2023 home value for two-bedroom SFR: $178,104
6% down payment: $10,686
Monthly mortgage payment for two-bedroom SFR: $1,332
Foreclosure rate: 1 out of 5,963 homes
The typical home value in Nebraska sits at about $100,000 less than the national average. Nebraska first-time homebuyers can research the Homebuyer Assistance Program through the Nebraska Investment Finance Authority, which has mortgages and second mortgages available.
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Tennessee
2023 home value for typical SFR: $306,848
6% down payment: $18,411
Monthly mortgage payment for typical SFR: $2,056
2023 home value for two-bedroom SFR: $229,359
6% down payment: $13,762
Monthly mortgage payment for two-bedroom SFR: $1,537
Foreclosure rate: 1 out of 9,469 homes
Tennessee is one of the top 10 destinations for relocating Americans, according to Forbes. First-time homebuyers in Tennessee can turn to the Great Choice Home Loan program offered by the Tennessee Housing Development Agency, to learn about affordable options for 30-year loans and help with down payments.
Iowa
2023 home value for typical SFR: $209,617
6% down payment: $12,577
Monthly mortgage payment for typical SFR: $1,548
2023 home value for two-bedroom SFR: $142,021
6% down payment: $8,521
Monthly mortgage payment for two-bedroom SFR: $1,049
Foreclosure rate: 1 out of 4,277 homes
With a very affordable typical home value at about $210,000, Iowa could be a haven for first-time homebuyers. The Homes for Iowans program has loan programs that have limited mortgage fees, and funds are available to help with down payments and closing costs.
Arkansas
2023 home value for typical SFR: $196,725
6% down payment: $11,803
Monthly mortgage payment for typical SFR: $1,312
2023 home value for two-bedroom SFR: $147,455
6% down payment: $8,847
Monthly mortgage payment for two-bedroom SFR: $983
Foreclosure rate: 1 out of 5,025 homes
Measuring housing affordability by state, Arkansas is one of the best states for homebuyers thanks to a typical home value of less than $200,000.
The Arkansas Development Finance Authority’s Move-Up loan program can help buyers access 30-year mortgage loans, and it also has a pair of down payment assistance programs for buyers meeting the qualifications.
South Dakota
2023 home value for typical SFR: $292,162
6% down payment: $17,530
Monthly mortgage payment for typical SFR: $2,080
2023 home value for two-bedroom SFR: $223,753
6% down payment: $13,425
Monthly mortgage payment for two-bedroom SFR: $1,593
Foreclosure rate: 1 out of 77,675 homes
South Dakota boasts the lowest rate of foreclosures in the U.S., and a typical single-family residence there remains less costly than the median in other states.
The South Dakota Housing Development Authority offers its First-Time Homebuyer Program for those who meet income limits, housing unit criteria and a home purchase price of less than $385,000.
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Louisiana
2023 home value for typical SFR: $201,043
6% down payment: $12,063
Monthly mortgage payment for typical SFR: $1,324
2023 home value for two-bedroom SFR: $135,740
6% down payment: $8,144
Monthly mortgage payment for two-bedroom SFR: $894
Foreclosure rate: 1 out of 4,979 homes
Homebuyers in Louisiana can take advantage of home loan programs for mortgages and down payment assistance through the Louisiana Housing Corp.’s Market Rate Conventional Program. The program is open to all homebuyers and not just first-time owners.
Missouri
2023 home value for typical SFR: $233,817
6% down payment: $14,029
Monthly mortgage payment for typical SFR: $1,627
2023 home value for two-bedroom SFR: $150,216
6% down payment: $9,013
Monthly mortgage payment for two-bedroom SFR: $1,045
Foreclosure rate: 1 out of 7,302 homes
More than $100,000 separates the price of the typical single-family home in Missouri and the U.S. average — with Missouri on the good side. GOBankingRate’s study of the best cities for first-time homebuyers to buy uncovered three in the state: St. Louis, Kansas City and Springfield.
No matter where they live in Missouri, first-time buyers can turn to the state’s Housing Development Commission for guidance on the First Place Program and interest rates below market rate. Loans also can be used to help with down payments and closing costs.
North Dakota
2023 home value for typical SFR: $252,359
6% down payment: $15,142
Monthly mortgage payment for typical SFR: $1,748
2023 home value for two-bedroom SFR: $178,138
6% down payment: $10,688
Monthly mortgage payment for two-bedroom SFR: $1,234
Foreclosure rate: 1 out of 13,708 homes
As with its neighbor to the south, North Dakota’s minimal foreclosure rate is comforting for homebuyers. Low- to moderate-income first-time homebuyers can apply for the FirstHome Program, offered by the North Dakota Housing Finance Agency. Down payment assistance also is available.
Kansas
2023 home value for typical SFR: $208,159
6% down payment: $12,490
Monthly mortgage payment for typical SFR: $1,506
2023 home value for two-bedroom SFR: $108,877
6% down payment: $6,533
Monthly mortgage payment for two-bedroom SFR: $788
Foreclosure rate: 1 out of 8,714 homes
With a typical home value just shy of $210,000, Kansas remains one of the least expensive places to buy in the country. And first-time buyers can find loan programs to fit their needs. The Kansas Housing Resources Corp. offers the First Time Homebuyer Program for those eligible, which provides assistance with down payments.
Discover More: 9 Major US Cities Where Buying a Home Is Surprisingly Cheap
Oklahoma
2023 home value for typical SFR: $196,251
6% down payment: $11,775
Monthly mortgage payment for typical SFR: $1,348
2023 home value for two-bedroom SFR: $97,835
6% down payment: $5,870
Monthly mortgage payment for two-bedroom SFR: $672
Foreclosure rate: 1 out of 6,673 homes
First-time homebuyers in Oklahoma stand to benefit from a typical home value that is more than $150,000 below the typical value across the U.S. The state can help qualified first-time homebuyers with products such as the Oklahoma Housing Finance Agency’s Gold Loan program, which offers both government and conventional loans.
GOBankingRates’ study of the best cities for first-time homebuyers identified Tulsa and Oklahoma City as great places to buy a home.
Kentucky
2023 home value for typical SFR: $199,430
6% down payment: $11,966
Monthly mortgage payment for typical SFR: $1,360
2023 home value for two-bedroom SFR: $145,414
6% down payment: $8,725
Monthly mortgage payment for two-bedroom SFR: $991
Foreclosure rate: 1 out of 10,521 homes
Kentucky offers affordable housing at less than $200,000 for the typical single-family residence. The Kentucky Housing Corp. will connect buyers with lenders who work with first-time buyers, and it also has help available with down payments, as well as tax credits.
Mississippi
2023 home value for typical SFR: $170,190
6% down payment: $10,211
Monthly mortgage payment for typical SFR: $1,136
2023 home value for two-bedroom SFR: $109,604
6% down payment: $6,576
Monthly mortgage payment for two-bedroom SFR: $732
Foreclosure rate: 1 out of 8,554 homes
Mississippi is even more budget-friendly than Kentucky, with the typical home costing about $170,000. State residents can access affordable homebuying programs offered by the Mississippi Home Corp., including Smart6, a 30-year fixed-rate mortgage that has a $ 6,000-second mortgage at 0% interest rolled into it. The loan is repaid when the mortgage is no longer active.
West Virginia
2023 home value for typical SFR: $152,926
6% down payment: $9,176
Monthly mortgage payment for typical SFR: $1,008
2023 home value for two-bedroom SFR: $94,838
6% down payment: $5,690
Monthly mortgage payment for two-bedroom SFR: $625
Foreclosure rate: 1 out of 9,342 homes
West Virginia is the most attractive state for first-time homebuyers, with the typical single-family home valued at slightly more than $150,000, allowing for a mortgage payment of just over $1,000.
The West Virginia Housing Development Fund offers its Homeownership Program to borrowers who have a gross income that falls within county income limits, are buying a home within a certain price limit and have not owned a home within the last three years in specific counties.
Andrew DePietro and Gabrielle Olya contributed to the reporting of this article.
Methodology: For this piece, GOBankingRates first found the typical single family home value in 2023 for every state from Zillow’s June 2023 data. GOBankingRates then found (1) yearly mortgage for a typical SFR by assuming 6% down payment (typical for first time homebuyers, according to Rocket Mortgage), 30-year fixed loan, current interest rate as sourced from St. Louis Federal Reserve (6.81%), and typical property taxes as sourced from TaxFoundation. GOBankingRates then found the 2023 average home value for a 2-bedroom single family residence and then found (2) yearly mortgage for a 2-bedroom SFR by assuming 6% down payment (typical for first time homebuyers, according to Rocket Mortgage), 30-year fixed loan, current interest rate as sourced from St. Louis Federal Reserve (6.81%), and typical property taxes. GOBankingRates also found each state’s (3) foreclosure rates as sourced from Sofi for June 2023. All three factors were then scored and combined, with the lowest score being best. All data was collected and is up to date as of August 1, 2023.
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This article originally appeared on GOBankingRates.com: Best and Worst States for First-Time Homebuyers
