Buying a first home in 2026 means navigating the intersection of high prices, higher rates, and limited inventory. But first-time buyers have advantages — including programs most people don't know exist — that can make ownership accessible earlier than expected.
How much house can you actually afford?
Lenders use debt-to-income ratio (DTI). Maximum: 43% DTI for most conventional loans (all monthly debt payments / gross monthly income). Target for financial health: PITI (principal, interest, taxes, insurance) under 28% of gross income.
🏠 Home affordability calculator
First-time buyer programs most people miss
- FHA loans (3.5% down): As low as 580 credit score. Requires mortgage insurance premium (MIP).
- Conventional 97 / HomeReady / HomePossible: 3% down, conventional financing, potentially lower MIP than FHA.
- USDA loans (0% down): Rural and suburban areas. Income limits apply. Often overlooked because people underestimate what qualifies as "rural."
- VA loans (0% down): Veterans and active military. No PMI, competitive rates.
- State/local DPA programs: Down payment assistance grants and forgivable loans. Some provide $10,000–$25,000 in assistance. HUD.gov has a state-by-state list.
The hidden costs buyers budget wrong
| Cost | Amount | Notes |
|---|---|---|
| Closing costs | 2-5% of purchase price | $8,000-$20,000 on a $400k home |
| Home inspection | $400-$700 | Always get one |
| Moving costs | $1,500-$5,000 | Local move vs long-distance |
| Immediate repairs/improvements | $2,000-$15,000 | Often underestimated |
| 1% maintenance reserve/year | $3,000-$5,000/yr | Budget monthly, spend annually |
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About the author
Enrique 'Kike' Faúndez is an Information Systems and Management Control Engineer from Universidad de Chile, with master’s degrees in Finance from Universidad de Chile and Industrial Engineering from Pontificia Universidad Católica de Chile. He has 15+ years of experience in regulated financial services across finance, operations, and digital product development. He founded CashControlly in Santiago, Chile, with the conviction that personal financial control should not be a privilege, but an accessible and well-designed tool.
- Master's in Finance, Universidad de Chile
- Master's in Industrial Engineering, Pontificia Universidad Católica de Chile
- Information Systems and Management Control Engineer, Universidad de Chile
- AI and ITIL certifications
- 15+ years in regulated financial services
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