What is a First Time Homebuyer?

If you are purchasing a home and you are a first-time home buyer, you might be eligible to several loan programs that are available to ease the financial burden and guide new homebuyers through the process. These programs may include Down Payment Assistance (DPA), Closing Assistance, Government-Backed Loans, lower interest rates, etc.

However, how do we know if a person is a first-time home buyer?

A first-time homebuyer is defined as someone who has not owned and occupied their home in the last three years, and who has not lived in a home owned by a spouse in the past three years. (From CalHFA.Ca.Gov Website)

To be considered a first-time home buyer, the requisites are no ownership interest AND has not occupied their home in the last three years. Take note that the conjunction used is “and,” meaning, these two requisites must be present.

Given this, the following are considered first-time homebuyers:

1. A homebuyer who currently lives in a home that he does not own. Say, renting an apartment or living with a friend/relative.
2. A homebuyer who owns a property but leases it to somebody else. He is currently living in a house that he or his spouse does not own for the past three years.
3. A homebuyer who is living in a property that is owned by his parents.

On the other hand, the following cannot be considered a first-time homebuyer:

1. A homebuyer whose primary residence is owned by his spouse. He does not need to be the owner of the property but being married to the owner creates ownership interest in the property.
2. A homebuyer who rents an apartment who sold the primary residence that he owned 2 1/2 years ago. There should be no ownership interest in the last 3 years.
3. A homebuyer who lives with his parents rent free but his name is on the title. Some people do this to protect their interest if something happens to his parents. Being on the title creates ownership interest on his primary residence.

What about if you live in a mobile home that you own?

This one is a little tricky. If the mobile home is permanently attached to a foundation, it is considered a real property and you cannot be considered a first-time home buyer. If, on the other hand, said mobile home is not permanently attached to the foundation, there is no ownership interest even if he lives in that mobile home.

With the above examples and scenarios, we hope that you now fully understand how to be and how not to be a first-time homebuyer.

There are a lot of different scenarios out there but the key consideration is that you do not have ownership interest in your primary residence AND if you own a house, you have not occupied said home for the past three (3) years.

Talk to your Loan Officer if you still have some questions regarding this.