First-Time Home Buyer in San Antonio? Here’s What You Really Need to Buy a Home

Buying your first home can feel overwhelming—especially when you start hearing terms like FHA, conventional financing, closing costs, down payment assistance, and seller concessions.

The good news is that you may need much less money upfront than you think. You do not necessarily need a 20% down payment to purchase a home. Several mortgage programs allow qualified buyers to purchase with as little as 0% to 3.5% down.

Here are some of the options first-time home buyers should know about when purchasing a home in San Antonio and the surrounding areas.

New Construction vs. Existing Homes

One of your first decisions will be whether to purchase a new construction home or an existing/resale home.

Buying New Construction

San Antonio and the surrounding communities have a large selection of new-home communities. Builders may periodically offer incentives such as contributions toward closing costs, interest-rate buydowns, upgrades, or other promotions, particularly when using an affiliated or preferred lender.

Those incentives can sometimes significantly reduce the amount of cash a buyer needs at closing.

However, an incentive doesn't automatically make one loan or home the better deal. I recommend comparing the home's price, interest rate, closing costs, taxes, HOA expenses, incentives and monthly payment before making the decision.

And remember: the builder's sales representative represents the builder. Having your own REALTOR® gives you someone helping you evaluate the transaction from the buyer's side.

Buying an Existing Home

Resale homes can provide opportunities that may not be available in a new subdivision, including established neighborhoods, larger lots, mature landscaping and a wider variety of locations.

Depending on the property and market conditions, we may also be able to negotiate seller contributions toward your closing costs or other terms of the transaction. The amount and availability of any seller contribution depends on the contract and applicable loan requirements.

What Types of Home Loans Are Available?

There isn't one "first-time home buyer loan." Instead, we look at your financial situation and determine which mortgage programs you may qualify for.

Conventional Loans

Qualified buyers may have conventional financing options requiring as little as 3% down. Programs such as Freddie Mac Home Possible® and HomeOne® provide 3% down options for eligible borrowers, although individual program requirements differ.

On a $300,000 home, 3% down would equal approximately:

$9,000 down payment

Private mortgage insurance may apply when financing more than 80% of the home's value.

FHA Loans

FHA financing is another popular option, particularly for buyers who may benefit from its more flexible qualification guidelines.

The minimum FHA down payment can be 3.5% for qualifying borrowers.

On a $300,000 home, that would be approximately:

$10,500 down payment

FHA loans also include mortgage insurance, which should be considered when comparing your total monthly payment.

VA Loans

For eligible veterans, active-duty service members and certain surviving spouses, the VA Home Loan can be one of the most powerful home-buying benefits available.

Qualified VA borrowers can potentially purchase with no down payment, provided the property's sales price does not exceed its appraised value. VA loans also do not require traditional private mortgage insurance.

There may still be closing costs and a VA funding fee for borrowers who are not exempt, so zero down does not always mean zero dollars needed to purchase.

USDA Loans

USDA financing may also provide 100% financing with no down payment for qualified buyers purchasing eligible properties in designated areas. Income and geographic eligibility requirements apply.

This can be particularly worth exploring if you're willing to consider communities outside the central San Antonio urban area.

What About Down Payment Assistance?

This is where many first-time buyers are surprised.

There are programs designed to help qualified buyers with the upfront expenses associated with purchasing a home.

One important Texas resource is the Texas State Affordable Housing Corporation (TSAHC).

TSAHC administers programs including Home Sweet Texas and Homes for Texas Heroes, which can provide eligible borrowers with mortgage financing and down payment assistance. Homes for Texas Heroes serves qualifying professions such as teachers, firefighters, EMS personnel, law enforcement/corrections personnel and veterans, while Home Sweet Texas serves qualifying low- and moderate-income Texas home buyers.

Depending on the loan and program selected, TSAHC currently offers assistance levels of 2%, 3%, 4% or 5% of the mortgage loan amount through eligible assistance structures. Credit, income, loan and other eligibility requirements apply.

That assistance can dramatically change the amount of money a buyer needs to bring to the transaction.

Don't Forget About Closing Costs

Your down payment and your closing costs are two different things.

Closing costs can include lender fees, appraisal expenses, title-related expenses, insurance, prepaid interest, escrow funding and other costs associated with financing and transferring the property.

The Consumer Financial Protection Bureau recommends using approximately 2% to 5% of the purchase price as an early estimate for closing costs, although the actual amount can vary considerably.

For example, on a $300,000 home, 2% to 5% would represent approximately:

$6,000 to $15,000 in estimated closing costs

That does not mean you will necessarily need to personally bring all of that money to closing.

Depending on the transaction, builder incentives, seller contributions, lender credits or down payment assistance may help reduce your out-of-pocket expenses.

So, How Much Money Should I Have Saved?

Let's use a $300,000 home as a simple example.

Conventional at 3% down:
Approximately $9,000 down + closing costs

FHA at 3.5% down:
Approximately $10,500 down + closing costs

VA for an eligible borrower:
Potentially $0 down + applicable closing costs

USDA for an eligible property and borrower:
Potentially $0 down + applicable closing costs

Then we look for opportunities to reduce those numbers through seller concessions, builder incentives and down payment assistance programs such as TSAHC.

There are also expenses that occur before closing, such as inspections, appraisal-related expenses when applicable, earnest money or other contract deposits, plus moving expenses and emergency reserves. Some deposits already paid during the transaction may ultimately be reflected in your final cash-to-close calculation. Your lender's Loan Estimate will provide a much more precise estimate once you are pre-approved and have a property under consideration.

You Don't Have to Figure This Out Before Calling a REALTOR®

One of the biggest mistakes I see first-time buyers make is waiting because they assume they don't have enough money, their credit isn't good enough, or they need to save 20% before purchasing.

Don't disqualify yourself before speaking with the right professionals.

The first step isn't finding a house. It's developing a strategy.

I can help you compare new construction and resale homes throughout San Antonio, connect you with experienced mortgage professionals, explore potential assistance programs and determine what purchasing a home may realistically look like based on your goals.

Whether you're ready to purchase now or you're still six or twelve months away, starting the conversation early gives us an opportunity to build a plan.

Thinking about buying your first home in San Antonio? Contact me and let's find out what options may be available to you.

Loan programs, interest rates, incentives and assistance programs are subject to eligibility requirements and change. Mortgage qualification and lending advice should be obtained from a licensed mortgage professional.