First-Time Homebuyer Mortgage Options: Compare Your Loans

Updated October 23, 2026.

A 20% down payment on a $250,000 Wichita home is $50,000. That's a lot of money to save before you even think about closing costs, moving expenses or the repairs that might come after you get the keys.

Fortunately, 20% isn't required for every mortgage. Some qualified buyers can purchase with 3% down through a conventional loan or 3.5% through an FHA loan. Eligible VA and USDA borrowers may not need a down payment at all.

But there's more to choosing a mortgage than finding the smallest down payment. A loan that requires less cash upfront might have higher mortgage insurance costs. Another could offer a lower monthly payment but charge more at closing. Even the location of a Wichita-area property can affect which programs are available.

The useful comparison is how much money you'll need to buy the home, what you'll pay each month and what the mortgage could cost over time.

What Counts as a First-Time Homebuyer Loan?

There isn't one universal mortgage reserved for first-time buyers. Conventional, FHA, VA and USDA mortgages each have their own rules, and some are available to people who've owned homes before. FHA and VA loans, for example, can serve eligible repeat buyers.

Some programs focus on low down payments. Others have requirements involving military service, household income or where the home is located.

A lender will consider your credit, income, existing debts, available funds and the property you want to buy. Individual lenders may also have requirements that are stricter than a loan program's basic standards.

Being eligible for a particular program doesn't guarantee mortgage approval. And a program's advertised minimum down payment isn't necessarily what you'll qualify to pay.

With that in mind, the first comparison many buyers should understand is conventional versus FHA financing. Both can offer a relatively small down payment, but their mortgage insurance works differently.

Conventional vs. FHA Loans: What's the Difference?

If you have enough savings for a small down payment, conventional and FHA financing may both be possibilities. The better option depends on what you qualify for and the actual costs a lender offers.

Conventional Loans: As Little as 3% Down

A conventional mortgage is one that isn't part of a government loan program such as FHA or VA. Different conventional products have different eligibility and down-payment requirements.

Some qualified buyers can put down as little as 3%. Fannie Mae's HomeReady mortgage, for example, offers low-down-payment financing to eligible first-time and repeat buyers, subject to income and other requirements.

Not everyone qualifies for 3% down, so ask the lender which conventional products are available to you.

With less than 20% down, you'll generally pay private mortgage insurance, or PMI. This insurance protects the lender if you default on the mortgage. It doesn't protect the house against damage; that's the job of homeowners insurance.

The good news is that conventional PMI doesn't necessarily remain part of your payment forever.

For many covered loans, you can request PMI cancellation in writing from your mortgage servicer (the company that handles your loan account and payments) when your mortgage balance reaches 80% of the home's original value, provided you satisfy the other requirements. That original value is generally the lower of the home's purchase price or its original appraised value.

Suppose the original value was $250,000. The 80% threshold would be a remaining mortgage balance of $200,000. Reaching that amount can allow you to request cancellation, but payment history, property-value requirements and other conditions still matter.

PMI generally ends automatically when the balance is scheduled to reach 78% of the original value, provided you're current on your payments.

A rising market value alone doesn't automatically remove PMI. The Consumer Financial Protection Bureau explains the cancellation requirements and when other arrangements may apply.

The possibility of eventually eliminating PMI is one reason to compare conventional financing against FHA, particularly if you expect to keep the mortgage for many years.

FHA Loans: As Little as 3.5% Down

FHA loans are insured by the Federal Housing Administration, although private lenders make the loans.

Eligible buyers can put down as little as 3.5%. FHA financing may be worth considering if your credit or other financial circumstances make a conventional offer less favorable.

That doesn't mean FHA loans are automatically easier to obtain. Credit, income, existing debt, property requirements and the lender's own standards still determine whether you qualify.

The major difference to watch is mortgage insurance.

FHA loans generally require both an upfront mortgage insurance premium and an annual premium collected through monthly payments. The upfront premium can typically be financed, but doing so increases the mortgage balance.

The monthly insurance also follows rules that differ from conventional PMI.

For FHA case numbers assigned on or after June 3, 2013, annual mortgage insurance generally lasts:

• For the entire loan term when the original loan-to-value ratio exceeds 90%.

• For 11 years when the original loan-to-value ratio is 90% or less.

Loan-to-value compares the amount borrowed with the property's value under the applicable loan rules. A typical FHA purchase with 3.5% down starts above the 90% threshold, so its annual mortgage insurance generally continues for the loan term.

Paying an FHA loan down to 80% of the home's original value doesn't automatically remove its mortgage insurance under the conventional PMI rules.

Consider what that means if you're comparing two offers. A 3% conventional mortgage might require slightly less money down than a 3.5% FHA mortgage, but the conventional and FHA insurance charges could be very different. Credit qualifications, interest rates and upfront fees can change the comparison further.

That's why it makes sense to request actual conventional and FHA estimates when you qualify for both. The CFPB's FHA loan guide explains the program, and HUD provides the mortgage insurance duration rules.

VA and USDA Loans: When No Down Payment May Be Possible

Conventional and FHA aren't the only options. Some buyers can obtain financing without making a down payment.

That can leave more savings available for closing costs and the expenses of owning a home. But zero down doesn't mean zero cost, and each program has eligibility requirements that go beyond your credit and income.

VA Loans for Eligible Military Borrowers

Eligible veterans, service members and certain surviving spouses may qualify for VA-backed purchase financing.

A VA loan may allow you to buy without a down payment when the purchase price doesn't exceed the home's appraised value, subject to your available VA entitlement (the amount of loan guarantee available through your VA benefit) and other loan requirements.

VA loans also don't require monthly mortgage insurance.

Those are meaningful benefits, but you'll still have to qualify financially and meet the applicable occupancy and property requirements.

You'll generally need a Certificate of Eligibility, or COE, to establish your VA home loan benefit eligibility. The COE doesn't replace the lender's credit and income review or guarantee approval.

Many VA borrowers also pay a one-time funding fee. The amount depends on factors including the loan type, down payment and prior use of the VA loan benefit. Some borrowers, including those who meet certain disability-related requirements, are exempt.

The funding fee may be financed into the mortgage rather than paid at closing. That can reduce the money needed upfront, but it also increases the loan balance and potentially the total interest paid.

A VA loan could be attractive to an eligible buyer who wants to preserve savings and avoid monthly mortgage insurance. It still deserves a comparison against the interest rates, fees and payments available through other loans.

The VA explains purchase loan eligibility and funding fees and closing costs. Our guide to common VA loan misconceptions addresses additional questions about using the benefit.

USDA Guaranteed Loans for Eligible Properties and Households

USDA financing offers another possible route to buying without a down payment, especially when you're considering properties beyond Wichita's more developed areas.

The Section 502 Guaranteed Loan Program from the U.S. Department of Agriculture (USDA) allows qualifying households to obtain 100% financing for an eligible primary residence through an approved lender.

Unlike conventional and FHA financing, USDA Guaranteed eligibility depends partly on the location of the home.

A property outside Wichita city limits isn't automatically eligible. Neither is a house simply because it sits on a large lot or looks rural. USDA uses geographic eligibility boundaries, so you need to check the actual address.

The household must also meet the program's income requirements. USDA generally limits adjusted annual household income to 115% of the applicable area median income. The calculation can include income from household members who aren't borrowers, subject to the program's rules.

For example, having another adult living in the house could affect household-income eligibility even if that person isn't applying for the mortgage. An approved lender can evaluate how the rules apply to your household.

USDA Guaranteed loans also have upfront and annual guarantee fees. Those charges can affect the amount financed, the monthly payment and the cash required at closing.

You can start with the USDA Guaranteed Loan Program's eligibility information and address tool. An approved lender will review the property's eligibility and your financial qualifications.

There is also a separate USDA Section 502 Direct Loan Program. It serves eligible low- and very-low-income rural applicants and may offer payment assistance. Applications go through USDA Rural Development rather than the usual Guaranteed-program lender process. Some assistance may have to be repaid later, and program funding and demand can affect processing.

The USDA Direct program has different income, financing and application rules. Don't assume you qualify for one USDA program simply because you qualify for the other.

How Much Cash Do You Actually Need to Buy a Home?

Even a small down-payment percentage can mean thousands of dollars you'll need to save.

Here's what different down payments would look like on a hypothetical $250,000 Wichita-area purchase:

These are down payments, not financing offers or total amounts needed to close.

Notice that 3% down is $7,500, while 3.5% is $8,750. The difference is $1,250.

For a buyer trying to preserve savings, $1,250 could matter. But it might be less important over time than differences in the mortgage insurance, interest and fees.

A smaller down payment may also leave you with enough savings to handle an unexpected repair without relying on credit cards or other borrowing.

That makes the remaining money in your bank account part of the mortgage decision, not an afterthought.

Down Payment and Cash to Close Aren't the Same Thing

In addition to the down payment, buying a home involves closing costs. These can include lender charges, title-related fees, appraisal expenses and prepaid items such as insurance and property taxes. If you owe compensation to your buyer's agent under your agreement, include that expense in your budget too, subject to the applicable loan program's rules.

You should also plan for expenses that may occur before or outside closing, including inspections, moving and initial repairs.

A lender's Loan Estimate includes an estimated cash to close, which accounts for down payment and closing costs after relevant credits, deposits and adjustments.

Suppose you've already paid earnest money when signing the purchase contract. That deposit is generally credited toward the funds required for the purchase. You wouldn't add it again on top of the cash-to-close amount.

Some loans also allow certain upfront program fees to be financed instead of paid in cash. Doing so may help with the immediate expense, but increases what you borrow.

Before deciding how much to put down, consider the savings you'll have left after closing. A lender's maximum approved loan amount isn't necessarily the amount you want to spend every month.

The CFPB's homebuying budget guide explains how to consider upfront costs, ongoing expenses and a financial cushion.

Why Two Wichita Homes at the Same Price Can Have Different Ownership Costs

The loan isn't the only thing that determines what you'll pay.

Imagine comparing two Wichita houses with identical asking prices. Both might qualify for the same conventional mortgage, yet their property-related expenses could be different.

Property taxes and homeowners insurance are part of the ongoing housing cost. If either property belongs to a homeowners association, dues can add another expense. Utilities, maintenance and repairs need room in the budget too.

In Wichita, special assessments are another item worth checking.

The City allows certain public improvements, such as street paving, water lines and sewer lines, to be funded through special assessments on properties in the affected improvement district.

One house might have an assessment associated with those improvements while another doesn't. That's a property-specific difference you won't necessarily recognize from the asking price.

Special assessments aren't limited to one type of neighborhood, and not every Wichita home has them. Look at the records for the actual property.

The City of Wichita explains special assessments, and Sedgwick County provides property appraisal and tax records.

When reviewing a lender's estimate, ask whether the property tax figure already includes any applicable special assessment. You want to capture the expense, not count it twice.

This comparison matters when deciding both which house to buy and how much mortgage payment you're comfortable carrying.

Can Down-Payment Assistance Help Wichita First-Time Buyers?

If saving for a down payment is your biggest obstacle, assistance programs are worth investigating. But the availability of assistance depends on more than being a first-time buyer.

Some programs provide grants. Others offer forgivable loans or second mortgages that must be repaid under certain circumstances.

An assistance program may have income limits, purchase-price caps, participating-lender requirements or restrictions on selling, refinancing and moving.

Kansas and Wichita also have different geographic rules, so two properties a short distance apart can produce different answers.

Kansas First Time Homebuyer Program

The Kansas Housing Resources Corporation, or KHRC, administers a First Time Homebuyer program that can provide qualifying buyers with down-payment and closing-cost assistance.

There's an important local limitation: KHRC's First Time Homebuyer program excludes properties within Wichita city limits.

A home just outside those limits may be worth checking, but being outside Wichita doesn't guarantee eligibility. The household, purchase price, financing and property must satisfy the program's other requirements.

KHRC generally defines a first-time buyer as someone who hasn't owned a home during the previous three years, with specific exceptions for certain circumstances. That means someone who owned a home years ago may still qualify.

The program also requires buyers to contribute at least 1%, but no more than 10%, of the purchase price from their own funds and use an eligible 30-year fixed-rate first mortgage. Gifts are subject to separate rules and don't replace the minimum required contribution from the buyer's own funds. Household-income and property-price limits apply.

The assistance isn't an unrestricted grant. Under KHRC's March 2025 program summary, it's provided as an interest-free second mortgage with two equal parts:

The first half is forgiven proportionately over five years when the total assistance is $14,999 or less. For assistance from $15,000 to $40,000, that first-half forgiveness period is ten years.

The second half is forgiven after ten years, provided you've continuously occupied the home as required and complied with the program rules. If you sell or refinance during those ten years, that half is repayable. The assistance mortgage isn't released until the applicable conditions are satisfied.

That distinction could be important if you think you might move or refinance within a few years. Even a smaller assistance award isn't necessarily completely forgiven after five years.

Read KHRC's First Time Homebuyer guidance and the program summary. A participating lender and KHRC can confirm the current terms, funding and property requirements.

Wichita HOMEownership 80

The City of Wichita operates a separate HOMEownership 80 assistance program for eligible first-time buyers in designated areas.

As of October 2026, the City is accepting applications only for qualifying newly constructed single-family homes developed through participating organizations.

That means someone shopping for a typical existing Wichita home shouldn't assume HOMEownership 80 will provide assistance for that purchase.

If you're interested in eligible new construction, the program may be worth investigating with one of the participating organizations. Income, geographic and other conditions still apply.

The City's HOMEownership 80 page lists participating organizations and explains where to begin.

These two programs illustrate why it's important to check assistance early. A buyer purchasing an existing home inside Wichita may face different options from someone considering a qualifying new home through a City partner or a property outside Wichita's municipal limits.

Before counting on any assistance, find out whether it applies to the property, whether funds are available and what would happen to the assistance if you later sell, refinance or move.

How Do You Compare Actual Mortgage Offers?

Once you know which programs might fit, ask lenders to show what those choices would cost.

You might qualify for both FHA and conventional financing. If you have eligible military service, a VA quote may be worth comparing too. USDA Guaranteed financing becomes a possibility when the household and property meet its requirements.

Instead of asking only which lender has the lowest rate, request written estimates that show the full financial picture.

A standardized Loan Estimate gives you a way to examine the loan amount, interest rate, upfront charges, estimated payment and cash required at closing.

Pay particular attention to four comparisons:

1. Cash needed at closing. Look at the total after down payment, applicable costs, deposits and credits. Ask how much you'll have left in savings.

2. Monthly housing payment. Compare principal and interest, mortgage insurance or annual program charges, estimated taxes and homeowners insurance. Account for any HOA dues and other property expenses.

3. Upfront financing costs. Check origination charges, program fees, discount points and lender credits. Discount points are upfront charges used to obtain a lower rate; lender credits can reduce closing expenses, sometimes in exchange for a higher rate.

4. Cost over time. Consider how long you expect to keep the mortgage, how long insurance charges may continue and the total interest and fees over a useful comparison period.

The CFPB's Loan Estimate comparison guide explains how to review offers, including the five-year borrowing-cost comparison.

Keep the Comparison Consistent

When you're comparing lenders offering the same type of mortgage, try to keep the loan amount, down payment, repayment term and timing consistent. Check whether the quoted rates are locked, since estimates prepared on different days can reflect market changes.

Comparing different mortgage programs is a little different.

Start with the same home's purchase price, but let the actual loan terms reflect each program. A 3% conventional mortgage and a 3.5% FHA mortgage won't have identical starting balances. Financing a VA funding fee or an eligible USDA upfront fee can change the balance again.

You want to understand those differences, not hide them by forcing every offer to have the same loan amount.

Remember, too, that the mortgage program and the repayment terms are separate choices.

A 15-year mortgage generally carries a higher principal-and-interest payment but less total interest than a comparable 30-year mortgage. A fixed-rate mortgage keeps its interest rate and scheduled principal-and-interest payment stable, although taxes and insurance can change.

An adjustable-rate mortgage, or ARM, can change its rate and payment after an initial period. If you're considering one, review the adjustment schedule and limits rather than assuming you'll be able to refinance before the rate changes.

The CFPB explains the different mortgage terms and rate structures.

A Loan Estimate isn't final loan approval. If you're ready to understand the lender's application and documentation requirements, our Wichita mortgage preapproval guide covers that process in more detail.

Which Mortgage Should You Choose for Your First Home?

Start with the programs you're eligible for, then compare what each would mean for your money.

A buyer who qualifies for conventional financing may prefer its potential for PMI cancellation. Another may find FHA financing more suitable after comparing credit qualifications and actual costs. An eligible VA borrower may place considerable value on avoiding monthly mortgage insurance, while a buyer considering a qualifying property beyond Wichita may want to investigate USDA financing.

The important thing is not to choose a loan solely because it advertises the smallest down payment.

Ask lenders which programs fit your circumstances, what each would require at closing and how the monthly payment and longer-term costs compare. If assistance is part of your plan, verify its conditions before assuming it will be available.

Your lender makes the financing eligibility and approval decisions. A real estate agent can help you evaluate properties, understand their purchase-related considerations and navigate the transaction, but can't guarantee loan or assistance approval.

For the broader steps from preparing your finances through closing, see our first-time homebuyer guide for Wichita.

You can also explore Wichita homes for sale or contact Urban Cool Homes for help with your property search.

A mortgage should do more than make it possible to purchase the house. It should leave you with a payment you can manage and enough financial flexibility to enjoy owning it.