top of page
Realtor Logo (1).png

Best Mortgage Lenders for First-Time Homebuyers in 2025: Top Banks Offering Down Payment & Closing Cost Assistance



If you're a first-time homebuyer navigating the mortgage landscape in 2025, you're in luck—many top banks and lenders now offer special programs, grants, and low down payment options to help make buying your first home more affordable.

In this guide, we break down the best mortgage lenders for first-time buyers (based upon the net loan winners of Q4-2024 on American Banker: https://www.americanbanker.com/list/10-biggest-winners-and-losers-on-loan-sales-in-q4), with a focus on closing cost assistance, down payment grants, and competitive interest rates. Whether you're looking for FHA loans, VA loans, or just need help with the upfront costs, here's where to start.


1. KeyBank – Up to $5,000 in Closing Cost Assistance + Rate Discounts

Best for: Closing cost help and interest rate reductions

KeyBank offers the Neighbors First Credit, a Special Purpose Credit Program designed to help first-time homebuyers cover closing costs. Eligible buyers can receive $5,000 toward prepaid fees and closing costs.

KeyBank also provides a 0.25% interest rate discount for clients who set up automatic payments from a KeyBank checking account.

💡 Example: As of March 17, 2025, KeyBank’s 30-year fixed mortgage rate in Alaska is 6.625% with an APR of 6.702%.

Why we like it: Substantial upfront cost savings and perks for loyal banking customers.


2. PNC Bank – $5,000 Closing Grant + No PMI on 3% Down Loans

Best for: Low down payment with no PMI

PNC Bank offers a $5,000 homebuyer grant for qualified borrowers—greatly reducing closing costs. Plus, they offer 3% down payment loans without requiring private mortgage insurance (PMI), which can save you hundreds per year.

Why we like it: Unique PMI-free options make monthly payments more manageable.


3. Wells Fargo – Low Down Payment & Assistance Programs

Best for: Traditional mortgage with flexible support

Wells Fargo provides several loan options for first-time buyers, including conventional mortgages with as little as 3% down. The bank also partners with down payment assistance programs across the U.S.

Why we like it: Established bank with national reach and helpful support programs.


4. U.S. Bank – 3% Down Loans with FHA, VA Options

Best for: Variety of loan types including government-backed loans

U.S. Bank offers a broad range of home loan products, including conventional, FHA, and VA loans. First-time buyers can also access 3% down payment options and assistance programs depending on their state.

Why we like it: Versatile mortgage options with support for veterans and low-income buyers.


5. Luminate Bank – First-Time Buyer Education & Pre-Qualification Help

Best for: Buyer education and transparency

Luminate Bank focuses on educating first-time homebuyers and helping them understand the mortgage process. They provide clear guidance on pre-qualification, documentation, and next steps.

Why we like it: Excellent resource for first-time buyers who want to feel confident and informed.


What About These Institutions?

Some big names in finance do not currently offer mortgage products or are not ideal for first-time buyers:

  • Square, Morgan Stanley, Hilltop Securities – Primarily focus on payments and investment banking.

  • SoFi, NexBank, TD Bank, CitiBank, Western Alliance, Goldman Sachs – Either limited support for first-time buyers or high upfront costs.


Top Picks for 2025 First-Time Homebuyer Mortgages

If you're looking for the best banks for first-time homebuyers, here are our top recommendations:

Winners

  • KeyBank – Best for closing cost grants and interest rate discounts

  • PNC Bank – Best for low down payment with no PMI

  • Wells Fargo – Great nationwide support and assistance programs

  • U.S. Bank – Flexible options including FHA and VA loans

  • Luminate Bank – Best for educational support

  • The Federal Savings Bank, Huntington Bank – Also worth considering for regional support


Not Ideal

  • Amarant Bank, SoFi, NexBank, Cross River Bank, CitiBank, TD Bank – Limited mortgage options or fewer incentives for first-time buyers


Final Thoughts: Choosing the Right Lender

Whether you prioritize low interest rates, down payment help, or educational support, there’s a lender out there for you. Always:

  • Compare interest rates and APRs

  • Check for first-time homebuyer grants

  • Ask about PMI and closing cost assistance

  • Consider government-backed loans if eligible (FHA, VA, USDA)


And remember, pre-approval is your first step toward homeownership. Reach out to your top-choice bank today and start your journey toward your first home!

Komentáře

bottom of page