First-time buyers in 2026 face best conditions since 2021: rates at 6.3%, 20% more inventory, flexible sellers. With 3.5% FHA, 0% VA/USDA, and $5K-$25K DPA programs, 2026 is your year to buy.
3 Reasons to Buy Now
- Rates Dropped to 6.3%, Down from 6.8% in 2026. On $350K loan: save $113/month = $40,680 over 30 years.
- 20% More Inventory, NAR: More choices, less competition, no bidding wars. You have negotiating power.
- Sellers Flexible, 6% pulling listings. Ask for $5K-$10K closing credits, repairs, or rate buydowns.
Strategy #1: Choose the Right Loan
Strategy #2: Stack Down Payment Assistance
The Stacking Strategy
Buying $350K house with FHA:
- Step 1: FHA 3.5% Down, $12,250 needed
- Step 2: State DPA Grant, $10,000 (CalHFA, IHDA, TSAHC)
- Step 3: Gift Funds, $2,000 from family
- Step 4: Seller Credits, $8,000 toward closing
Total Out-of-Pocket: $250, Plus $3K-$5K closing costs = $3,250-$5,250 total!
State DPA Programs 2026:
California: CalHFA
- Up to 20% of price (max $150K)
- Shared appreciation loan
- Income: Up to $210K
Strategy #3: Negotiate with Power
Tactic #1: Closing Cost Credits
Ask seller to pay $5K-$10K toward closing costs. Reduces your out-of-pocket without lowering appraised value.
Example:
“We offer $350K, contingent on seller providing $8K closing credits.”
Tactic #2: Repairs or Price Cut
After inspection, ask seller to fix issues or reduce price by repair cost.
Example:
“Inspection found $6,500 repairs. Request $6,500 price reduction or seller completes repairs.”
Tactic #3: Rate Buydown
Seller pays for 2-1 buydown or permanent buydown. Costs them $5K-$15K, saves you $200-$300/month.
Strategy #4: Master Closing Cost
Typical Costs ($350K House)
5 Hacks to Save $3K-$8K
- Hack #1: Compare 3+ Lenders (Save $1K-$3K):Origination fees vary 0.5-1.5%. Shop around.
- Hack #2: Shop Title Insurance (Save $500-$1K): Get 3 quotes. Not required to use lender’s company.
- Hack #3: Lender Credits (Save $1K-$2K): Accept 0.125% higher rate for $1K-$2K credits.
- Hack #4: Close End of Month (Save $500-$1.5K): Close on 28th-31st to minimize prepaid interest.
- Hack #5: Seller Credits (Save $5K-$10K): FHA allows sellers to pay up to 6% toward closing.
Strategy #5: Get Pre-Approved (Not Pre-Qualified)
❌ Pre-Qualification
- Self-reported income
- No credit check
- Takes 10 minutes
- Sellers don’t trust it
✅ Pre-Approval
- Full credit check
- Document verification
- Takes 1-3 days
- Sellers take you seriously
Strategy #6: Time Your Purchase
- Spring (March-May): Best Time, Most inventory, rates at 6.0-6.3%, good weather.
- Summer (June-Aug): Good Negotiating, Motivated sellers, less competition from families.
- Fall/Winter: Best Deals, Desperate sellers, negotiate 5-10% below asking.
Strategy #7: Build Your Team
Mortgage Lender, Pre-approval, loan processing.
✅ Compare 3+ lenders
✅ Check DPA experience
✅ Read reviews
Buyer’s Agent, Find homes, negotiate offers.
✅ Interview 3+ agents
✅ Check sales history
✅ Full-time only
Home Inspector, Inspect for defects, repairs.
✅ Licensed/certified
✅ Detailed reports
✅ Cost: $400-$600
Real Estate Attorney, Review contracts, closing.
✅ Required in some states
✅ Complex transactions
✅ Cost: $500-$1,500
2026 is your year. Get pre-approved and start house hunting.
Source: mortgage-info.com ~ By: Sarah Mitchell ~ Image: Canva Pro