Question:
My husband and I are thinking of buying our first home and we were wondering what, if any, first time home buyer advantages there are.

Answer:
In the general case there are two advantages to being a "first-time" homebuyer.

First, if you have not owned property for the past three years you may want to examine state-backed mortgage programs. Realtors and lenders can tell you more, but if you qualify you may be able to obtain financing with little down and a low interest rate. In the case of "mortgage credit certificates" or MCC financing, you can also get special tax write-offs. Note that funds under these programs are limited.

Second, under the 1997 federal tax reform rules, it is possible for someone to make a penalty-free IRA withdrawal of up to $10,000 to assist you in the purchase of a first home -- in this case you must not have owned a home for at least 2 years to be defined as a "first-time" homebuyer. Please have the donor(s) check with a CPA, enrolled agent, or a tax attorney for details.

As well, look into FHA, VA, Affordable Gold, Flex97, and the Community Homebuyer programs for other loans which may be helpful.