Yes, you could be a first-time homebuyer twice
Quick insights
- You can regain status as a first-time homebuyer after not owning a home for a certain period, such as several years.
- Even if you’ve owned a home before, some loan programs allow exceptions based on life circumstances, such as job relocation and financial hardship.
- Rules can vary by mortgage lender, assistance program and state, so it’s important to review your eligibility before applying.
Purchasing your very first home can be an incredible and unforgettable experience. You remember the excitement of getting the keys to your new home, walking through the rooms and imagining the life you’d build there. But life can change. Perhaps you sold your home years ago, rented for a while or moved for work.Â
Now you’re ready to buy a home again, and you may be wondering: Can I be considered a first-time homebuyer again? The short answer is yes—you may be able to claim first-time homebuyer status, even if you’ve previously owned property. This depends on your specific circumstances and the mortgage loan program’s guidelines.
What is considered first-time homebuyer status?
A first-time homebuyer is usually defined as someone who has not owned a principal residence within the past three years. However, the exact definition can vary depending on the mortgage loan program, lender or government agency. Understanding how the rules and distinctions work is important, especially if you’re looking to qualify for down payment assistance, special loan programs or tax benefits.
When are you considered a first-time homebuyer again?
You can regain first-time homebuyer status under certain circumstances:
- Former homeowners who have been renting: If you sold your last home and have been renting for at least three years, loan programs and lenders could view you as a first-time homebuyer again.Â
- Owners returning after a life change: If you previously owned a home but, because of a major life event (such as divorce), have not owned a property for several years, you may qualify.
- Single parents re-entering the workforce: A parent who previously owned a home with a spouse but no longer does, and is purchasing as a sole owner, may qualify under certain program definitions.
- Family caregivers who left the workforce: Individuals who left the workforce (and possibly sold their home) to care for a relative may be considered first-time homebuyers again, depending on the timeline.Â
- Manufactured or mobile homeowners: If you lived in a home that was not classified as real estate, you may still be considered a first-time homebuyer.
- Homes not permanently attached: If your last primary residence wasn’t fixed to a foundation, such as a mobile home on wheels, you may still meet first-time homebuyer criteria according to certain lenders.
Potential benefits of being a first-time homebuyer twice
Even if it’s not your very first time buying a home, regaining first-time homebuyer status can open doors to certain opportunities. Many mortgage lenders and assistance programs extend certain terms to first-time homebuyers who qualify for a loan.Â
These potential benefits may help you make the most of your next purchase:Â
- Access to special programs: Qualify for down payment assistance, reduced interest rate programs or state and local incentives designed for first-time homebuyers.
- Financial advantages: Lower upfront costs through grants or forgivable loans, which helps keep more money in your pocket at closing.
- Building equity again: Start fresh by building equity in a new property, creating long-term financial stability.
Using an FHA loan as a first-time homebuyer
An FHA loan can make homeownership more accessible for first-time homebuyers. Backed by the Federal Housing Administration, FHA loans are designed with flexible qualification requirements that can help homebuyers who may not fit general criteria for a conventional mortgage loan.Â
The potential benefits of using an FHA loan as a first-time homebuyer include lower down payment and credit score requirements. Plus, FHA loans can offer rates that are competitive with conventional financing.
In conclusion
Being considered a first-time homebuyer multiple times is possible under specific conditions. Consider researching the requirements of various programs and lenders offering mortgages to first-time homebuyers in your state. You can also speak with a Home Lending Advisor to confirm your eligibility, explore your loan options and make informed decisions before you start shopping for your next home.
