The Best Mortgage Lenders for First-Time Buyers of March 2023

Our experts answer readers' home-buying questions and write unbiased product reviews (here's how we assess mortgages). In some cases, we receive a commission from our partners; however, our opinions are our own.

First-time homebuyers often need extra help or affordable mortgage solutions to get them through the mortgage process. That's why it's important to have a lender that is equipped to meet their unique needs.

All of our top picks allow low down payments and thrive in customer satisfaction and affordability. Many have special features such as down payment assistance that can help make homeownership even more affordable.

Best Overall: Guild Mortgage

Best for Down Payment Assistance: Bank of America

Best for Low-Income Borrowers: Chase

Best for Veterans: Navy Federal Credit Union

Best for FHA Loans: New American Funding

Best for Student Loan Borrowers: US Bank

Best for No Down Payment: Alliant Credit Union

Best Online: Better.com

Best for Low Credit Scores: Carrington Mortgage Services

Comparing the Best Mortgage Lenders for First-Time Buyers

Guild Mortgage (jump to Guild Mortgage details»)

The bottom line: Guild Mortgage offers many extra features that make it a great option for first-time buyers, including flexible credit requirements, a convenient application process (including the ability to complete the process online or in-person at one of its physical branches), and digital closing capabilities. Plus, this lender can connect you with down payment assistance programs in your area. 

If you don't have a credit history, Guild's Complete Rate program lets you use rent payment history to apply. It also offers a hybrid closing that lets you sign most of your documentation ahead of time, so you'll have a quick closing appointment.

It's also a top lender for customer satisfaction; in 2021, it ranked above the industry average in J.D. Power's annual Mortgage Origination Satisfaction Study.

Guild has an A rating from the BBB.  

Bank of America (jump to Bank of America details»)

The bottom line: Bank of America is a good mortgage lender for financial assistance, and its new Community Affordable Loan Solution is one of the most generous programs of its kind.

Bank of America offers down payment assistance up to $10,000 and closing cost assistance up to $7,500. This makes it a particularly attractive lender for first-time homebuyers, who often have trouble coming up with enough cash to cover these costs. Additionally, if you're already a Bank of America customer, you may be able to receive a discount on your origination fee.

Bank of America's new Community Affordable Loan Solution removes many of the barriers that traditionally have kept people from becoming homeowners. With this mortgage, you can buy a home with no down payment and no closing costs, and use non-traditional credit (such as proof of on-time rent or utility payments) to qualify.

The Community Affordable Loan Solution mortgage is available only in certain markets, including some historically Black and Hispanic neighborhoods in Charlotte, Dallas, Detroit, Los Angeles, and Miami

This lender has an A+ rating from the BBB and ranked above average on J.D. Power's 2022 Primary Mortgage Origination Satisfaction Study.

Chase (jump to Chase details»)

The bottom line: Chase is a strong mortgage lender overall, especially if your income is low enough to qualify for the DreaMaker mortgage. But you'll need a decent credit score to qualify with this lender.

The DreaMaker mortgage is one of Chase's strongest offerings, helping middle-to-low-income borrowers get into a home with 3% down and flexible credit requirements. Its Homebuyer Grant program also gives out up to $2,500, or $5,000 to borrowers in low-income or majority-Black areas.

Chase has an A rating from the Better Business Bureau and ranked No. 2 in the J.D. Power 2022 Mortgage Origination Satisfaction Study.

Navy Federal Credit Union (jump to Navy Federal Credit Union details»)

The bottom line: Navy Federal is a good option for people affiliated with the military, especially if you're searching for a lender that's friendly to people who have low credit scores and little money for a down payment.

Navy Federal offers several affordable mortgages beyond its VA loan, including a Homebuyers Choice mortgage, which is a conventional loan with no down payment required and no mortgage insurance. This lender also accepts alternative credit data, such as utility bills.

Navy Federal has an NR (No Rating) from the BBB because it's in the process of responding to previously closed complaints. It received a high score from J.D. Power, but didn't rank in the annual customer satisfaction study because it doesn't meet certain criteria.

You can only become a member of Navy Federal Credit Union if you or your family is affiliated with the military, you are a Department of Defense civilian personnel or contractor, or you live with a Navy Federal member. 

New American Funding (jump to New American Funding details»)

The bottom line: New American Funding is a good mortgage lender overall, and its FHA loans are a particularly strong choice for first-time homebuyers with limited or rocky credit histories.

New American Funding allows scores below 580 on its FHA loans and will consider non-traditional credit from borrowers who don't have a score. You may also be able to get an FHA loan from this lender if you have a recent negative event, such as a bankruptcy or foreclosure, on your credit report.

New American Funding has an A+ rating from the BBB.

US Bank (jump to US Bank details»)

The bottom line: US Bank offers a variety of mortgages, including its American Dream Loan, which is geared toward low-income borrowers. US Bank says it will work with student loan borrowers on income-driven repayment plans for this mortgage.

US Bank's American Dream Loan comes with a 3% down payment, no mortgage insurance, and it allows non-traditional credit if you don't have a credit score. You'll also get up to $10,000 in down payment and closing cost assistance with this mortgage.

This lender is also a good option if you already have an account with US Bank, as you could get up to $1,000 off your closing costs.

US Bank currently has a B+ rating from the BBB. It ranked below average in J.D. Power's annual study.

Alliant Credit Union (jump to Alliant Credit Union details»)

The bottom line: Alliant Credit Union is a good option for first-time borrowers with decent credit scores. But you'll need to become a member to qualify.

This lender's Alliant Advantage Mortgage lets first-time homebuyers put 0% down with no mortgage insurance, making it an incredibly affordable option for those who qualify. 

Alliant Credit Union has an A+ rating from the BBB.

Better.com (jump to Better.com details»)

The bottom line: Better.com is an affordable lender and a good choice for borrowers who value a quick and convenient online application process. 

Better.com charges no lender fees, making it an affordable option for those looking to keep their closing costs down. It also offers a preapproval that takes just a few minutes to complete and gives you the ability to easily see personalized rates without providing contact information.

Better.com has a B rating from the BBB. It ranked below average in J.D. Power's 2022 customer satisfaction study.

Carrington Mortgage Services (jump to Carrington Mortgage Services details»)

The bottom line: Carrington Mortgage Services has mortgages that allow credit scores as low as 500. It also has options for borrowers with recent bankruptcies or foreclosures.

This lender has some of the best flexible credit options out of all the lenders on this list. With Carrington Mortgage Services, you can get a government-backed mortgage with a credit score as low as 500, or a Carrington Flexible Advantage mortgage with a score as low as 550 or recent negative events on your credit report.

Carrington Mortgage Services has an A+ rating from the BBB.

Other Mortgage Lenders We Considered

We evaluated over two dozen mortgage lenders before picking our favorites. Here are the other lenders we looked at and reasons they didn't make the cut:

• Guaranteed Rate: This lender has an easy-to-use interface and lets you close digitally, but it doesn't have first-time homebuyer assistance like many of our top picks.
• Pentagon Federal Credit Union: If you have a 650 credit score, PenFed offers $500 to $2,500 in lender credit for all members, depending on how much you borrow. The credit union doesn't have FHA or USDA mortgages, though.
• USAA: USAA only offers VA mortgages right now.
• LoanDepot: LoanDepot is a solid lender, but it doesn't have any features that set it apart from the crowd.
• Wells Fargo: The lender does have homebuyer assistance for lower-income buyers. However, Wells Fargo has had multiple public controversies over the past few years regarding claims of racist lending practices, creating fake bank accounts, and charging customers for insurance products they didn't sign up for.
• Caliber Home Loans: Caliber doesn't have any first-time homebuyer assistance programs.
• Fairway Independent Mortgage Corporation: This is a strong lender overall, but it doesn't have products geared toward first-time buyers like some of our top picks.
• Truist: This lender has a few different low down payment options, including one without mortgage insurance. However, it ranked below average in customer satisfaction according to J.D. Power.
• Veterans United: Veterans United offers several types of mortgages, not just VA mortgages. It doesn't have any programs for first-time buyers, though.
• CMG Financial: CMG has unique grant opportunities and mortgages. They could be good options, but these programs aren't for everyone.
• Freedom Mortgage: This is a good lender if you have a low credit score, but you can't fill out an application online.
• Flagstar Bank: This lender offers several types of home loans, but none of its features make it stand out.
• Movement Mortgage: Movement Mortgage will process your mortgage within seven business days. It doesn't have any homebuyer assistance programs, though.
• Ally: Ally has a convenient online process, but it only offers conventional mortgages.
• NBKC Bank: NBKC is an overall good mortgage lender, but you'll need a good credit score.
• PNC Bank: PNC's offerings aren't as strong as what you can get from the lenders we picked.
• Rocket Mortgage: Rocket Mortgage ranks high in customer satisfaction, but it has few features that would make it worthwhile for a first-time buyer.

Methodology: How We Chose the Best First-Time Buyer Mortgage Lenders for 2023

To choose the top mortgage lenders of February 2023, we looked at four main factors:

• Loan types. Did a lender offer several types of loans to suit customers' needs, such as conventional loans (including conforming and jumbo) and government-backed loans?
• Customer satisfaction. If the lender appeared in the J.D. Power 2021 Primary Mortgage Origination Satisfaction Survey, we looked at its ranking. If it wasn't in the survey, then we read online customer reviews.
• Affordability. We looked at lenders' minimum credit scores and down payment amounts. We also checked whether they offer government-backed loans, which can be more affordable for borrowers with less-than-perfect financial profiles. Finally, we looked at whether it has flexible credit requirements, such as accepting non-traditional credit from borrowers with no scores or considering borrowers with recent negative events on their credit reports.
• Ethics. Many of our top picks received an A+ from the Better Business Bureau, which measures companies' trustworthiness. The exceptions are Guild Mortgage and Chase, which both have a A due to government action against the lender, Navy Federal Credit Union, which has an NR rating because the business is responding to previously-closed complaints, Better.com, which has a B due to complaints filed against the lender, and US Bank, which has a B+ due to government action.

We also looked closely at lenders with programs specifically for first-time buyers, such as down payment assistance. Most of our top picks have features that benefit first-time buyers, and those that don't made the list because they thrived in other criteria.

Are These Mortgage Lenders Trustworthy?

The Better Business Bureau grades companies based on responses to customer complaints, honest advertising, and transparency about business practices. Here are the BBB grades for our top lenders:

Most of the lenders have an A rating or better from the BBB. Guild Mortgage and Chase have an A rating due to government action. Navy Federal has an NR rating because it is responding to unresolved customer complaints. US Bank has a B+ due to government action. Better.com has a B rating due to complaints filed against the lender.

In 2020, Guild Mortgage paid the United States $24.9 million when it was accused of approving FHA mortgages for people who didn't qualify, resulting in loan defaults.

Some of the other lenders on our list have recent public controversies, too, despite their strong BBB grades.

In 2020, the Department of Justice charged Bank of America for unfairly denying home loans to adults with disabilities, even though they qualified for loans. Bank of America paid around $300,000 total to people who were refused loans.

The Department of Justice required JPMorgan Chase to pay $920 million for wrongful trading in 2020.

A Navy Federal employee has claimed the lender pressured mortgage underwriters to approve loans even if they didn't have sufficient reason to believe applicants could repay the loans. Then she filed a lawsuit and said Navy Federal retaliated against her whistleblowing by changing her job duties. She dropped the case in late 2020.

Better.com's founder and CEO Vishal Garg has been accused of fostering a hostile workplace at Better.com and of engaging in fraud with some of his previous startups. He also laid off around 900 employees over Zoom in late 2021.

In 2020, US Bank paid the US government $200 million when it was accused of approving FHA loans for mortgage insurance even though either a) borrowers didn't meet requirements for FHA loans, or b) US Bank didn't check their credit scores. In 2022, US Bank settled allegations from the Consumer Financial Protection Bureau that it illegally accessed customer credit reports and opened accounts without customer permission.

Frequently Asked Questions

Additional Resources and Programs for First-Time Homebuyers

You may qualify for a program specific to your state or county. These often come in the form of down payment/closing cost assistance or tax benefits.

You could receive assistance if you buy a home that needs major renovations, including a Fannie Mae HomeStyle loan, Freddie Mac CHOICERenovation loan, FHA 203(k) loan, and the Energy Efficient Mortgage program.

You may qualify for the Department of Housing and Urban Development's Good Neighbor Next Door program if you're a teacher, firefighter, law enforcement officer, or emergency medical responder who lives in a "revitalization area."

Go to the Good Neighbor Next Door website to search for homes in your area. Homes are listed for seven days, and you can purchase one for 50% off the listed price.

The Native American Direct Loan is for Native American military veterans, and it's issued through the VA. You don't need money for a down payment, and you won't pay private mortgage insurance.

Mortgage and Refinance Rates by State

Check the latest rates in your state at the links below. 

Alabama
Alaska
Arizona
Arkansas
California
Colorado
Connecticut
Delaware
Florida
Georgia
Hawaii
Idaho
Illinois
Indiana
Iowa
Kansas
Kentucky
Louisiana
Maine
Maryland
Massachusetts
Michigan
Minnesota
Mississippi
Missouri
Montana
Nebraska
Nevada
New Hampshire
New Jersey
New Mexico
New York
North Carolina
North Dakota
Ohio
Oklahoma
Oregon
Pennsylvania
Rhode Island
South Carolina
South Dakota
Tennessee
Texas
Utah
Vermont
Virginia
Washington
Washington DC
West Virginia
Wisconsin
Wyoming