Best mortgage lenders for first-time home buyers of December 2025

2. Personal Finance
3. /
4. Mortgages

Some offers on this page are from advertisers who pay us, which may affect which products we write about, but not our recommendations. See our Advertiser Disclosure.

First-time home buyers need an edge. Buying a house in 2025 takes a series of savvy financial moves, and you'll need a mortgage lender who can be a true partner in the process. Here are the best mortgage lenders to provide you with first-time buyer grants, loans, and more.

The best mortgage lenders for first-time buyers: December 2025

Best lender for renters looking to buy: Rocket Mortgage

Why Rocket Mortgage stands out: Rocket helps renters make the leap to homeownership with a grant equal to a portion of rent paid.

Rocket Mortgage details

• Availability: All 50 states and Washington, D.C.

• Loans for first-time buyers: Conventional, FHA, and VA loans

• Minimum down payments: 1% for conventional, 3.5% for FHA, 0% for VA loans

• Minimum credit scores: 620 for conventional, 580 for FHA, and 580 for VA loans

Pros

• Rocket RentRewards allows current renters to apply up to 10% of what they pay in rent to closing costs, up to $5,000.

• The ONE+ gives first-time home buyers a 2% grant, which allows them to make just a 1% down payment with a conventional loan.

• Rocket has an above-average customer satisfaction score, as determined by the J.D. Power 2025 U.S. Mortgage Origination Satisfaction Study.

Cons

• Advertised mortgage rates are reduced by adding up to two discount points.

• Total mortgage costs are a mixed bag. Rocket offered median interest rates to borrowers in 2024 — but much higher-than-median loan costs.

Read our complete Rocket Mortgage review.

Up Next

• Is it a good time to buy a house?
• Will a Trump 'housing emergency' mean a new first-time home buyer tax credit?
• First-time home buyer programs in California

Best lender for first-time home buyer grants and assistance: Bank of America

Why Bank of America mortgages stand out: With the deep resources of a huge national brand, Bank of America offers grants to first-time home buyers.

Bank of America mortgage details

• Availability: All 50 states and Washington, D.C.

• Loans for first-time buyers: Conventional, FHA, and VA loans

• Minimum down payments: 3% for conventional, 3.5% for FHA, and 0% for VA loans

• Minimum credit scores: "We don’t publish minimum credit scores," Susan Atran, senior vice president of Bank of America, told Yahoo Finance via email.

Pros

• BofA offers grants up to $7,500 for closing costs and up to $10,000 in down payment assistance for qualified buyers in many, but not all, states.

• Existing customers may qualify for an origination fee or interest rate deduction. To qualify, you'll likely have to sign up to draft your mortgage payments from an account.

• A home-buyer program for medical professionals allows borrowers to make lower down payments and exclude student loans from debt limits. Residents and fellows can also close on a loan 90 days before starting a new position.

• Bank of America is near the top of customer satisfaction rankings in the 2025 J.D. Power survey.

Cons

• Bank of America's sample mortgage rates are based on an above-average credit score of 740 or higher. According to FICO, the national average is 715. Keep this in mind when comparing BofA’s mortgage rates with competitors’ rates.

Best lender for first-time FHA loan borrowers: Pennymac

Why Pennymac mortgages stand out: Pennymac is the largest lender in the nation for loans insured by the FHA (Federal Housing Administration) and is well-equipped to guide first-time home buyers through the government loan process.

Pennymac mortgage details

• Availability: All 50 states and Washington, D.C.

• Loans for first-time buyers: Conventional, FHA, VA, and USDA loans

• Minimum down payments: 3% for conventional, 3.5% for FHA, 0% for VA, and 0% for USDA loans

• Minimum credit scores: 620 for conventional, 580 for FHA, 580 for VA, and 580 for USDA loans

Pros

• Pennymac is the largest FHA mortgage lender by loan volume in the U.S., and FHA loans are typically geared toward first-time buyers.

• The lender offers a rate buydown that can lower your interest rate by 1% for one year.

• When you are preapproved for an eligible mortgage, Pennymac will give you a $1,000 credit to apply to closing costs.

• Use a real estate agent endorsed by Pennymac and get $350 to $9,500 cash after closing.

Cons

• While interest rates were favorable, loan costs were much higher than the median, according to a Yahoo Finance analysis of government data.

Best lender for first-time VA loan borrowers: Veterans United

Why Veterans United mortgages stand out: A leading VA mortgage lender, Veterans United specializes in serving military-connected borrowers, limiting its loan selection to only those that apply to its service-related clientele.

Veterans United details

• Availability: All 50 states and Washington, D.C.

• Loans for first-time buyers: Primarily VA loans; however, Veterans United does offer conventional, FHA, and USDA loans

• Minimum down payments: 0% for VA, 3% for conventional, 3.5% for FHA, and 0% for USDA loans

• Minimum credit scores: 620 for all loans

Pros

• Veterans United is, by far, the highest-volume VA loan provider in the nation.

• The lender offers a rich supply of educational material. The resources are deep, well-researched, and include calculators, articles, videos, and a complete VA home-buying course.

• Veterans United has a very high score in J.D. Power's customer satisfaction survey.

Cons

• Veterans United provided only average value to borrowers in 2024, with a record of median interest rates and loan costs.

Read our complete Veterans United mortgage review.

Best lender for first-time USDA loan borrowers: U.S. Bank

Why U.S. Bank mortgages stand out: U.S. Bank offers rural and suburban home financing with no down payments through a USDA-backed program.

U.S. Bank mortgage details

• Availability: All 50 states and Washington, D.C.

• Loans for first-time buyers: Conventional, FHA, VA, and USDA loans

• Minimum down payments: 3% for conventional, 3.5% for FHA, 0% for VA, 0% for USDA loans

• Minimum credit scores: 640 for all loans

Pros

• U.S. Bank is a top 20 loan volume USDA lender. Mortgages backed by the Department of Agriculture have relaxed credit standards and allow no down payment to home buyers of modest means.

• Existing U.S. Bank customers may be eligible for a credit of up to $1,000.

• A prequalification process is free, "takes five minutes," and does not impact your credit.

Cons

• US Bank's mortgage rates, as published on its website, look appealing. However, the conventional loan rates shown require a down payment of 25% and a FICO score of 740 or better. That's well above the national average credit score of 715.

• The lender ranks below-average for customer satisfaction, according to J.D. Power.

Best first-time home buyer lender for the lowest rates and loan costs: Navy Federal Credit Union

Why Navy Federal mortgages stand out: Navy Federal Credit Union distinguishes itself by offering lower mortgage interest rates and loan costs than many competing lenders.

Navy Federal mortgage details

• Availability: All 50 states and Washington, D.C.

• Loans for first-time buyers: Conventional and VA loans

• Minimum down payments: 5% for conventional, 0% for VA loans

• Minimum credit scores: "Navy Federal does not disclose its credit score thresholds for proprietary reasons," a public relations contact for NFCU told Yahoo Finance.

Pros

• Navy Federal offered below-median interest rates and loan costs to borrowers in 2024.

• The Special Freedom Lock allows you to relock your interest rate twice if rates move lower before your loan closing.

• The No-Refi Rate Drop offer allows you to tap a lower interest rate six months or later after closing — for a $250 fee but without additional closing costs or changing your loan terms.

• A rate guarantee states that Navy Federal will match a lower mortgage rate offered by a competing lender or pay you $1,000.

• Navy Federal ranks above average in the latest J.D. Power Mortgage Origination Satisfaction Study.

Cons

• Sample mortgage rates are quoted "as low as" and include discount points and a 1% origination fee. Your rate will likely differ from what is shown.

Best lender for first-time buyers using alternative credit: Guild Mortgage

Why Guild Mortgage stands out: Guild accepts alternative forms of credit, such as utility bills and rent payments, so that borrowers without a credit score or with meager credit histories can still qualify for a mortgage.

Guild Mortgage details

• Availability: 49 states (excluding New York) and Washington, D.C.

• Loans for first-time buyers: Conventional, FHA, VA, USDA, and the Complete Rate program

• Minimum down payments: 3.5% for FHA, 0% for VA, 0% for USDA, and varies by loan type for the Complete Rate program

• Minimum credit scores: 620 for conventional, 540 for FHA, 540 for VA, 540 for USDA, and no credit score for the Complete Rate program

Pros

• For first-time home buyers without a credit score or lacking a long credit history, Guild's Complete Rate program can consider alternative payment histories and bank deposits.

• An education program helps first-timers prepare to qualify to buy a home and can provide down payment assistance.

• Guild has an above-average score for customer satisfaction as reported by J.D. Power.

Cons

• Guild charged high loan costs to borrowers in 2024, according to government data.

Learn how to buy a house when you have no credit score.

Best first-time home buyer lender for customer service: Rate

Rate mortgage details

• Availability: All 50 states and Washington, D.C.

• Loans for first-time buyers: Conventional, FHA, VA, and USDA loans

• Minimum down payments: 3% for conventional, 3.5% for FHA, 0% for VA, 0% for USDA loans

• Minimum credit scores: 620 for conventional, 550 for FHA, no minimum for VA, and 620 for USDA loans..

Why Rate mortgages stand out: An early-mover in digital mortgages, Rate (previously Guaranteed Rate) also offers face-to-face service in many markets.

Pros

• Enhancing online convenience with a personal service option, Rate has hundreds of branch locations across the nation.

• A "Same Day Mortgage" promises loan approval — but not loan funding — within 24 hours of locking in a mortgage interest rate and submitting financial documents.

Cons

• Advertised rates for conventional loans factor in more than one discount point, are based on a 20% down payment, and a FICO score well above the national average.

• Rate scores below average in customer satisfaction, according to the latest J.D. Power Mortgage Origination Satisfaction Study.

Best lender for first-time buyer online resources: Chase

Why Chase Bank mortgages stand out: Chase Bank offers a wide assortment of home-buying tools, including nearly a dozen calculators, plus videos, checklists, FAQs, and more. These are useful for first-time buyers who aren’t familiar with the home-buying process.

Chase mortgage details

• Availability: All 50 states and Washington, D.C.

• Loans for first-time buyers: Conventional, FHA, and VA loans

• Minimum down payments: 3% for conventional, 3.5% for FHA, 0% for VA, 0% for USDA loans

• Minimum credit scores: 620 for all loans

Pros

• Chase earns Yahoo Finance's highest 5-star rating for its abundant online learning resources, which are perfect for guiding first-time home buyers through a complicated process.

• Chase offers an on-time closing guarantee of $5,000 and claims it can close a home loan as quickly as three weeks under specific guidelines.

• VA loans may be eligible for a credit of $2,500 to $5,000, which can be applied to your interest rate first, then closing costs.

• Chase has an above-average rating for customer satisfaction, according to the 2025 J.D. Power study.

Cons

• The conventional loan interest rates on the Chase website are enhanced with strict credit standards, including 20% to 30% down payments, one discount point, and borrowers with "excellent" credit. In other words, the rate you earn could be much different.

Who qualifies as a first-time home buyer?

A first-time home buyer is generally defined as someone who has never owned a home or hasn't owned one in the past three years. If you are single and previously co-owned a house with a spouse, you may also be considered a first-time home buyer.

However, additional qualifications may be imposed by the lender, state or local agency, or housing program you are applying to. Some programs may have income, credit score, or location limits and could require the completion of an educational course.

• Want to buy a house in early 2026? Here's how to prepare.

The benefits of being a first-time home buyer

The advantages of being considered a first-time home buyer include:

• Making a low — or no — down payment.

• Receiving down payment or closing costs assistance.

• Qualifying with a lower credit score or with relaxed credit terms.

• Being entitled to tax breaks. That can include tax credits such as Mortgage Credit Certificates (MCCs), as well as other tax deductions and credits that come in and out of favor.

Types of first-time home buyer mortgages

Fannie Mae HomeReady loans

Many mortgage lenders offer conventional loans backed by Fannie Mae. With the HomeReady program, you only need a 3% down payment and a 620 credit score. You also might qualify with a debt-to-income ratio as high as 50%.

You must finish a home-buyer education course to qualify for this program, which is often useful for first-time buyers.

Freddie Mac Home Possible loans

Conventional loans backed by Freddie Mac also require a 3% down payment and an online home-buyer education course. The main differences from the HomeReady program are that Home Possible loans require a 660 credit score and a 45% DTI ratio for buying a house.

FHA loans

FHA loans can be great for first-time home buyers because you can qualify with a 580 credit score and 3.5% down payment. (You can even get an FHA loan with a score as low as 500, but you'll need 10% down in this case.)

VA loans

VA loans are for eligible active military personnel, veterans, and their families. They're excellent mortgages for getting your foot in the door of homeownership because you don't need a down payment.

The U.S. Department of Veterans Affairs also doesn't set a minimum credit score, so you can shop for lenders that accept low scores if that's an issue.

USDA loans

You also don't need a down payment for USDA loans. These mortgages are for low-to-moderate-income borrowers who are buying in rural and suburban areas.

As with VA loans, the U.S. Department of Agriculture doesn't set a minimum credit score, so the credit score needed will depend on the lender.

Types of first-time buyer programs

First-time home buyer federal programs

Federal programs such as VA, FDA, and USDA loans allow for easier qualifying and lower down payments. First-responders and teachers may qualify for additional assistance in programs such as the Good Neighbor Next Door.

Other low-down-payment options are administered by government-sponsored enterprises Fannie Mae and Freddie Mac, through mortgage lenders.

First-time home buyer state and municipal programs

State housing finance authorities are the backbone of many first-time home buyer down payment and closing costs assistance programs. Some cities offer similar incentives, often in partnership with nonprofits.

First-time home buyer lender programs

Lender programs may include mortgage rate buydowns, grants applied to down payments (such as 1%-down-payment loans), and other closing costs assistance.

First-time home buyer grants, low-interest, and forgivable loans

Programs at any level — national, state, local, or lender — can include grants and low-interest loans that are deferred or don't require payback at all.

How to choose a mortgage lender as a first-time home buyer

First-time home buyers are a valuable commodity to financial institutions because buying a house can be the beginning of a long financial relationship.

You want to comparison-shop three or more lenders who are willing to:

• Explain the process.

• Compete for your business.

• Meet deadlines and expectations.

• Respond promptly.

• Treat you with respect.

Once you have your lender contenders, take these three steps:

1. Obtain mortgage preapprovals from each before you shop for a house.

2. When you have a purchase contract, compare loan estimates from each lender.

3. Examine all loan costs, especially lender fees and origination charges.

Remember, you are the buyer — the decision is yours. Resist pressure and false deadlines. Negotiate firmly but honestly.

Learn how to avoid these 7 costly first-time home buyer mistakes.

Best first-time home buyer mortgage lenders FAQs

What type of mortgage is best for first-time buyers?

An FHA loan is often a good mortgage option for first-time home buyers because you only need a 580 credit score and a 3.5% down payment (or a 500 credit score with 10% down). It also allows borrowers with more debt to buy a home than many other types of mortgages. However, a conventional loan could be a better choice if you're a first-time buyer with a strong credit score and lower debt levels, because many lenders only require 3% down.

What is the best option for first-time home buyers?

First-time home buyers should look into three government-backed home loans: FHA, VA, and USDA loans. FHA loans are geared toward people with higher debt levels and lower credit scores. VA loans are for military-affiliated buyers who don't have money for a down payment. USDA loans are for lower-income homeowners who are buying in rural areas and don't have money for a down payment. However, a conventional loan could still be a great fit for first-time buyers with 620 credit scores and 3% down.

How much do most first-time home buyers put down?

In 2024, the median down payment among first-time home buyers was 9%, according to Realtor.com. You can put down as little as 0% as a first-time buyer getting a VA loan or USDA loan. You can also put down 3.5% for an FHA loan. Depending on the lender and how strong your finances are, you may be able to put down as little as 3% with a conventional mortgage.

What mortgage term is best for first-time buyers?

A 30-year mortgage term is usually the choice for first-time buyers. All common types of mortgage loans offer a 30-year option, and it has lower monthly payments than, say, a 15-year mortgage.

What is the ideal credit score for a first-time home buyer?

As a first-time home buyer, a 620 credit score is preferable. You can qualify for a conventional mortgage with most lenders with a 620 score. However, FHA loans are often good deals for first-time buyers who might not have had time to build strong credit yet — FHA loans only require a 580 score.

What is the easiest type of mortgage to get approved for?

An FHA loan is usually the easiest to get approved for because it has relatively lenient credit score requirements. But if you're affiliated with the military and are eligible for a VA loan, you'll likely be approved because the VA doesn't set a minimum credit score — the requirement varies by mortgage lender.

Our methodology: How we chose the best mortgage lenders for first-time buyers

Yahoo Finance reviews mortgage lenders based on five primary considerations: 1) Interest rates. Using 2024 Home Mortgage Disclosure Act data from almost 5,000 mortgage companies, we analyze mortgage lenders based on issued mortgage rates below or above the annual median of reporting lenders. 2) Affordability. A measure of loan product availability and the willingness of a lender to offer government-backed loans, low down payments, down payment assistance, and consideration of nontraditional credit. 3) Loan costs. HMDA data is again analyzed, and total loan costs are compared to the annual median. 4) Rate transparency. The ability of a website user to obtain a mortgage interest rate estimate. We also consider whether rates are enhanced with discount points or high credit score requirements, disclaimers revealing rate assumptions, sample advertised rates, and whether adjustable or no discount point rate estimates are available. 5) Online features. An analysis of the educational material, calculators, and additional resources available to users.

Advertisers or sponsorships do not influence ratings.

Editorial disclosure for mortgages:

The information in this article has not been reviewed or approved by any advertiser. The details on financial products, including interest rates and fees, are accurate as of the publish date. All products or services are presented without warranty. Check the lender's website for the most current information. This site doesn't include all currently available offers.

Laura Grace Tarpley edited this article.

Read More

Best mortgage lenders of December 2025

The best mortgage lenders offer low interest rates, a range of loan programs, and high customer satisfaction. Choose the best mortgage lender for your needs.

Questions to ask a home loan lender

Having the right questions to ask your home loan lender can help you find the best mortgage terms for your financial situation.

The best VA loan lenders of December 2025

VA loans are great for military personnel, and the top-rated VA mortgage lenders offer low fees and interest rates. Find the best VA loan lender for your family.

How a 40-year mortgage loan works

A 40-year mortgage has low monthly payments, but you’ll pay more interest and accumulate home equity slowly. Learn whether a 40-year mortgage loan is a good fit.

Best mortgage lenders for bad credit in December 2025

The best mortgage lenders for bad credit offer FHA loans, accept alternative credit data, and have unique programs for buyers. Find your best mortgage lender.

Best low- and no-down-payment mortgage lenders of December 2025

The best mortgage lenders for low and no down payments have programs for low-income borrowers, down payment assistance, and more. Find out which is best for you.

Up Next

• Is it a good time to buy a house?
• Will a Trump 'housing emergency' mean a new first-time home buyer tax credit?
• First-time home buyer programs in California