First-Time Home Buyer Programs in Kansas City
Buying your first home does not always require a 20% down payment. Qualified Kansas City buyers may have access to conventional financing with as little as 3% down, FHA financing with 3.5% down, or eligible VA and USDA loans that may require no down payment.
Metropolitan Mortgage Corporation helps first-time buyers throughout Kansas and Missouri compare loan programs, understand their estimated monthly payment and prepare a competitive mortgage pre-approval.
Who Is Considered a First-Time Home Buyer?
In many mortgage programs, a first-time home buyer is someone who has not owned a principal residence during the previous three years. That means you may still qualify as a first-time buyer even if you owned a home earlier in life.
Depending on the program, only one borrower may need to meet the first-time buyer definition. Some financing options are also available to repeat buyers, so not meeting the technical definition does not necessarily prevent you from using a low-down-payment mortgage.
You do not need a special “first-time buyer loan” to buy your first home
First-time buyers commonly use the same Conventional, FHA, VA and USDA mortgages available to other qualified borrowers. The best option depends on your credit, income, property location, military eligibility, available funds and long-term plans.
First-Time Home Buyer Loan Options
Metropolitan Mortgage offers several financing options that can reduce the amount qualified buyers need upfront. Program eligibility and final terms are determined through underwriting.
Conventional 97
A Conventional 97 mortgage can finance up to 97% of an eligible primary residence. It may be a strong option for borrowers with established credit who want mortgage insurance that can eventually be removed when applicable requirements are met.
HomeReady®
Fannie Mae HomeReady offers eligible lower-income borrowers a conventional mortgage with as little as 3% down, flexible funding sources and reduced mortgage-insurance coverage compared with some standard conventional structures.
Home Possible®
Freddie Mac Home Possible provides an eligible 3% down option for qualifying very-low- to low-income borrowers. Gift funds and other eligible funding sources may be used subject to program guidelines.
HomeOne®
Freddie Mac HomeOne is an eligible 3% down conventional option created for qualified first-time buyers. Unlike certain income-restricted programs, HomeOne does not use the same borrower income limit structure, although other eligibility requirements apply.
FHA Loans
FHA loans can be useful for buyers who need more flexible credit or debt-to-income guidelines. FHA permits eligible financing with a minimum required investment of 3.5%, subject to credit and underwriting requirements.
VA Loans
Eligible veterans, active-duty service members and certain surviving spouses may be able to purchase with no lender-required down payment when the sales price does not exceed the appraised value. VA loans also do not require monthly private mortgage insurance.
USDA Loans
USDA financing may offer 100% financing for income-qualified buyers purchasing an eligible primary residence. Eligibility depends on household income, property location and USDA underwriting guidelines.
Gift Funds
Depending on the selected loan program, an eligible donor may be allowed to provide funds toward the down payment, closing costs or required reserves. Documentation requirements and eligible donor relationships vary by program.
Seller-Paid Closing Costs
Buyers may negotiate for the seller to pay eligible closing costs, subject to the purchase contract, appraisal and maximum contribution limits for the chosen mortgage program.
Compare First-Time Home Buyer Programs
This comparison provides a starting point. The least expensive option upfront is not always the loan with the lowest total long-term cost. Mortgage insurance, interest rate, closing costs and future plans should all be considered.
| Program | Potential Minimum Down Payment | Often Best For | Important Considerations |
|---|---|---|---|
| Conventional 97 | As little as 3% | Qualified first-time buyers with established credit | Mortgage insurance and pricing depend on the borrower profile |
| HomeReady | As little as 3% | Eligible lower-income borrowers needing flexible funding options | Income limits and homeownership education may apply |
| Home Possible | As little as 3% | Eligible very-low- to low-income borrowers | Income and education requirements may apply |
| HomeOne | As little as 3% | Qualified first-time buyers seeking a conventional option | At least one borrower generally must qualify as a first-time buyer |
| FHA | As little as 3.5% | Buyers who need flexible credit or underwriting guidelines | Upfront and annual mortgage insurance generally apply |
| VA | Potentially 0% | Eligible veterans, service members and surviving spouses | Eligibility and a VA funding fee may apply; some borrowers are exempt |
| USDA | Potentially 0% | Income-qualified buyers purchasing in eligible areas | Property-location and household-income limits apply |
Which First-Time Buyer Loan May Fit Your Situation?
You have strong credit and want cancellable mortgage insurance
Start by comparing Conventional 97, HomeReady, Home Possible and HomeOne options.
Your credit profile needs additional flexibility
An FHA loan may provide more flexible qualifying guidelines than conventional financing, although mortgage insurance costs should be considered.
You are an eligible veteran or service member
A VA loan should typically be included in your comparison because of its potential zero-down structure and lack of monthly PMI.
You are considering an eligible suburban or rural property
USDA financing may provide 100% financing when both the household and property meet USDA eligibility requirements.
You have limited savings but family members can help
Ask about eligible gift funds and whether the selected program requires any minimum contribution from your own funds.
You need help reducing closing expenses
Consider negotiating seller-paid closing costs or evaluating available lender-credit structures rather than focusing only on the down payment.
How Much Money Do You Need to Buy Your First Home?
Your total cash requirement is not limited to the down payment. A realistic estimate should include the down payment, closing costs, prepaid expenses, earnest money and funds you want to retain after closing.
Down payment
Depending on eligibility, your minimum down payment could range from zero on certain VA or USDA transactions to 3% on eligible conventional options or 3.5% on eligible FHA financing.
Closing costs
Closing costs may include lender charges, title services, appraisal fees, government recording fees and other transaction expenses. The exact amount depends on the property, loan program, loan size and closing structure.
Prepaid expenses and escrow funding
Buyers may also need funds for prepaid interest, homeowners insurance and the initial deposits used to establish property-tax and insurance escrow accounts.
Earnest money
Earnest money is normally deposited after the purchase contract is accepted. It is generally credited toward the amount due at closing, subject to the terms of the contract.
Post-closing reserves
Even when reserves are not required for approval, retaining emergency savings can make the transition to homeownership more comfortable.
Down payment assistance and MHDC disclosure
Metropolitan Mortgage Corporation does not currently offer MHDC loans or state-administered down-payment-assistance programs. We focus on the Conventional, FHA, VA, USDA and affordable conventional financing options described on this page.
Buyers who specifically require an assistance program should verify availability and participating-lender requirements directly with the applicable housing agency.
What Do First-Time Buyers Need to Qualify?
Mortgage approval is based on the complete application rather than one number. Your lender reviews your credit history, income, employment, assets, monthly obligations and the property being purchased.
- Credit profile: Your score and credit history affect program eligibility, rate pricing and mortgage-insurance costs.
- Stable qualifying income: Income must be documented and reasonably expected to continue under the applicable guidelines.
- Debt-to-income ratio: Existing debts plus the proposed housing payment are compared with gross qualifying income.
- Verified funds: Funds used for closing must come from documented and eligible sources.
- Eligible property: The home must satisfy the occupancy, appraisal and property standards for the selected loan.
- Pre-approval documentation: Pay statements, W-2s or tax returns, bank statements and identification may be requested depending on the borrower’s circumstances.
A lower credit score, student-loan balance, self-employment income or limited savings does not automatically prevent approval. It may change which loan structure is most appropriate and what documentation is needed.
Start with the Kansas City affordability calculator to create an initial budget, then review the verified mortgage pre-approval process before beginning serious home shopping.
The First-Time Home Buying Process
Review your finances
Evaluate your income, debts, available savings and desired monthly payment before choosing a target purchase price.
Complete a mortgage pre-approval
Submit the necessary credit, income and asset documentation so your lender can evaluate available programs and prepare a pre-approval letter.
Choose your loan strategy
Compare estimated rate, payment, cash to close, mortgage insurance and long-term cost—not just the minimum down payment.
Shop for a home
Work with a qualified real estate professional and stay within the price and payment range established during pre-approval.
Make an offer
Your offer may address price, closing date, inspection provisions, appraisal considerations and any requested seller contribution.
Complete inspections and appraisal
A home inspection evaluates the property for your benefit, while the lender-ordered appraisal helps establish value and program eligibility.
Finish underwriting and close
Respond promptly to document requests, review your Closing Disclosure, complete the final walkthrough and sign the closing documents.
Read the full seven-step Kansas City first-time home buyer guide for more detail on local neighborhoods, inspections and closing.
Kansas City Resources for First-Time Buyers
Kansas City Housing Market
Review current pricing, inventory and market conditions before deciding where and when to purchase.
Affordable Kansas City Communities
Explore communities and subdivisions that may offer more attainable price points for entry-level buyers.
Common Buyer Mistakes
Learn how credit changes, large purchases, job changes and incomplete documentation can disrupt a mortgage approval.
Kansas City Mortgage Rates
Compare current rate information while remembering that personalized pricing depends on the complete loan scenario.
Mortgage Payment Calculator
Estimate principal and interest and account for taxes, insurance and mortgage insurance when building your housing budget.
Pre-Approval Documentation Checklist
Organize identification, income, employment and asset documents before applying to help reduce underwriting delays and make your pre-approval more efficient.
First-Time Home Buyer FAQs
Do first-time home buyers need 20% down?
No. Qualified borrowers may have conventional options with as little as 3% down, FHA financing with 3.5% down, or eligible VA and USDA options that may require no down payment. Closing costs and prepaid expenses must also be considered.
What is the best mortgage for a first-time buyer?
There is no single best program for every buyer. Conventional financing may offer lower long-term mortgage-insurance costs for some borrowers, FHA may provide greater qualifying flexibility, and VA or USDA may provide zero-down options for eligible applicants.
Can a family member provide my down payment?
Many programs permit eligible gift funds from acceptable donors. The donor relationship, transfer of funds and absence of repayment obligations must generally be documented.
Can the seller pay my closing costs?
Seller contributions may be permitted when negotiated in the purchase contract. Maximum amounts and eligible expenses depend on the loan program, occupancy, down payment and other transaction details.
Can I qualify while paying student loans?
Potentially. The required monthly student-loan payment is included in the debt-to-income calculation according to the selected program’s guidelines. The balance itself does not automatically prevent mortgage approval.
Can I qualify if I owned a home several years ago?
Possibly. Many programs define a first-time buyer as someone who has not owned a principal residence during the previous three years. Program-specific exceptions and requirements may apply.
Does Metropolitan Mortgage offer MHDC or down-payment assistance?
Metropolitan Mortgage does not currently offer MHDC loans or state-administered down-payment-assistance programs. We offer eligible Conventional, HomeReady, Home Possible, HomeOne, FHA, VA and USDA financing and can also evaluate permitted gift funds, seller contributions and lender-credit structures.
When should I get pre-approved?
Pre-approval is generally appropriate before serious home shopping or submitting an offer. Starting early also gives you time to address documentation, credit or budgeting issues before entering a purchase contract.
Take the First Step Toward Your Kansas City Home
Compare your available loan programs, estimated payment and expected cash to close with a local mortgage team serving buyers throughout Kansas and Missouri.
Program availability, eligibility, down-payment requirements, mortgage insurance, interest rates and closing costs vary by borrower and property. This information is for educational purposes and is not a commitment to lend. All loans are subject to credit, income, asset, appraisal and underwriting approval. Metropolitan Mortgage Corporation is an Equal Housing Lender. Company NMLS #227722.