Quick answer
A first-time homebuyer, under the definition most US programs use, is someone who hasn’t owned a home during the 3 years before the purchase — so a former owner can qualify again. HUD’s definition also covers single parents and displaced homemakers whose only recent ownership was with a spouse.
Key facts
3years
MCC and mortgage revenue bonds: no principal residence in the past
26 U.S.C. 143(d) · Oct 28, 2026
2years
IRA early-withdrawal exception: no principal residence in the past
26 U.S.C. 72(t)(8) · Oct 28, 2026
The definitions side by side
| Program | No ownership in the past | Notes |
|---|---|---|
| HUD (HOME program and many state programs) | 3 years | Counts you and your spouse |
| Fannie Mae, including HomeReady | 3 years | Any residential property, sole or joint |
| Mortgage credit certificates and bond loans | 3 years | Principal residence; waived in targeted areas |
| IRA penalty-free withdrawal | 2 years | Up to $10,000 over your lifetime |
Each program applies its own wording, so check the exact rule with the agency or lender.
What the label unlocks
First-time status can open down-payment assistance, mortgage credit certificates and some state agency loans. It can also bring obligations: under HomeReady and Home Possible, when every occupying borrower is a first-time buyer, at least one must take a homebuyer education course. The guide Who counts as a first-time buyer? works through the edge cases, including the single-parent and displaced-homemaker exceptions.
Sources
- 42 U.S.C. 12704(14) — First-time homebuyer: has not owned a home in the past (HUD/HOME statute) (Oct 28, 2026)
- Fannie Mae Selling Guide E-3-06 — Fannie Mae: first-time buyer had no ownership interest in the past (Sep 3, 2025)
- 26 U.S.C. 143(d) — MCC and mortgage revenue bond loans: no ownership interest in a principal residence in the past (Oct 28, 2026)
- 26 U.S.C. 72(t)(8) — IRA first-home exception: no ownership interest in a principal residence in the past (Oct 28, 2026)
- IRS Tax Topic 557 — Penalty-free IRA withdrawal for a first home (lifetime limit) (Oct 26, 2026)
Last reviewed Figures are checked against the sources above. Read our editorial policy. This page is general information, not financial advice — see the disclaimer.