If your family is ready to purchase your very first home, you may seek a traditional home mortgage loan to do so. But if banks keep turning you down for a loan, ask a lender about government-backed home buyer loans. A government-backed home buyer loan typically requires a lower down payment to obtain. Learn more about government-backed home buyer loans and whether or not you qualify for financing below.

How Does a Government-Backed Home Loan Work?

A government-backed loan allows you to obtain a home mortgage loan or other types of financing from a federally-owned company or entity. The loan allows you to purchase a home with a smaller down payment than you would with a traditional bank or mortgage loan company. For some future homeowners, a government-backed loan may be the best option for them right now. 

A federally-owned company generally requires several things from potential first-time homebuyers, including a:

Along with the requirements listed above, you must also be able to submit copies of your employment or self-employment information, such as tax returns and tax schedules. You also want to obtain a letter of recommendation from anyone who plans to assist you with your mortgage payments. Be sure to notarize the document before you submit it to a loan company. 

You also want to obtain readable and clear copies of your Social Security number, identification card, and other types of identifying information. After you secure or retrieve everything you need, go ahead and apply for a first-time home mortgage loan. 

How Do You Apply for a Government-Backed Home Loan?

A home mortgage company will use your information to match you with the right government-backed loan. A company may also ask you to complete a mortgage application in person or online. If possible, try to complete your application in a quiet location or place. A loan company can deny your application if you don't complete your application properly. 

The loan you receive for your first house may depend on several things, including your income and debt. In some cases, a mortgage company may recommend ways to decrease your debt-to-income ratio. After you decrease your debt or increase your income, you can reapply for a home buyer loan.

If a mortgage lender doesn't find anything wrong with your loan application, they'll secure the government-backed loan you need to purchase your home.

For more details about applying for your first-time home buyer mortgage or loan, reach out to a financial institution, such as Loan Depot.