A First-Time Home Buyer is usually a buyer who has not owned a primary residence in the last 3 years. So it does not always mean “never owned a home before.” Someone who owned a home many years ago may still qualify as a first-time buyer under many programs.

The main benefit is access to special loan and assistance programs, not an automatic discount. Benefits may include:

1. Lower down payment options
   FHA loans may allow as little as 3.5% down, and some conventional programs such as Fannie Mae HomeReady may allow as little as 3% down for eligible buyers.
2. Down payment or closing cost assistance
   In California, CalHFA’s MyHome Assistance Program offers a deferred-payment junior loan to help with down payment and/or closing costs, up to 3.5% for FHA loans or 3% for conventional loans, based on the lesser of purchase price or appraised value.
3. Special California programs
   CalHFA’s Dream For All is a shared-appreciation down payment assistance program for first-time buyers, but the 2026 application portal closed after March 16, 2026, so buyers must check for future openings before relying on it.
4. Homebuyer education and counseling
   Many programs require or encourage homebuyer education. This helps buyers understand credit, loan approval, closing costs, escrow, inspections, and monthly payment responsibilities. CFPB also provides buyer tools and mortgage resources.
5. Possible IRA penalty exception
   Qualified first-time buyers may be able to use up to $10,000 from an IRA without the 10% early-withdrawal penalty, though taxes may still apply depending on the account type.