First Steps

First-Time Homebuyer Class: What’s Covered and When to Take One

Published on: June 14, 2022

first time homebuyer class

A first-time homebuyer class helps you learn about the ins and outs of the homebuying process and what it means to be a homeowner.

Even if your mortgage lender or homebuyer assistance program doesn’t require you to attend a homebuyer education course, taking one might better prepare you for the ins and outs of homeownership.

What is a homebuyer education course?

A homebuyer education course consists of educational classes that walk you through the entire homebuying process. The idea is to help you understand exactly what to expect throughout the process, including managing housing expenses and understanding complex mortgage topics.

The content within a first-time homebuyer education course is typically set by the U.S. Department of Housing and Urban Development (HUD) and, in some cases, the National Industry Standards for Homeownership Education and Counseling (NIS).

Even if you’re not a first-time homebuyer, these courses can help refresh your memory of what happens throughout the homebuying process. And depending on your loan type, you may be required to take a course to satisfy the lender’s requirements.

What's covered in a first-time homebuyer class

These classes go over essential information on the homebuying process, providing you with step-by-step guidance to learn the ins and outs of buying and financing a home. 

Here are some topics typically covered in a homebuyer class:

  • Deciding to become a homeowner. The course will walk you through comparing renting versus buying and understanding when you’re ready to become a homeowner. 
  • How to budget for a home. You’ll learn about how credit can affect your loan eligibility, as well as learn budgeting and other financial skills like saving up to qualify for a better loan and to afford homeownership costs comfortably.
  • How to choose a home. You’ll learn how to determine how much you can afford, such as by using a mortgage affordability calculator.
  • Financing a home purchase. Topics include selecting the right lender, learning important mortgage terminology, and comparing loan terms to find a mortgage that’s the right fit.
  • Working with a real estate agent. You’ll learn the role a real estate agent plays, including how they can help you put an offer on a home and guide you through closing. 
  • The closing process. You’ll learn about the closing process, including documentation needed, what to expect during the home inspection, the purpose of an appraisal, and when you need to purchase a homeowners insurance policy.

You can choose to take a first-time homebuyer course in person or online. Typically, you’ll need to complete and pass a quiz to assess your knowledge and receive a certificate of completion.

Do you have to take a first-time homebuyer class?

No, you don’t have to take a first-time homebuyer education class unless you’re required to for a specific loan program. For instance, first-time homebuyer programs such as Freddie Mac Home Possible® and Fannie Mae HomeReady® require you to complete one, typically during the financing portion of your homebuying journey.

Even if it’s not a requirement, there are benefits to taking a homebuyer education course; the information you’ll learn could help you make more informed decisions. Aim to take the course as early as you can in the homebuying process. Doing so might help you better determine how much house you can afford or how to hire a real estate agent.

How long is a first-time homebuyer class?

A typical first-time homebuyer class takes about four to eight hours to complete. Your specific course length may depend on the required elements to get a specific loan type. For instance, Fannie Mae’s HomeView course takes around four hours to finish online and is free, so you don’t have to feel too stressed about being able to complete it in time.

Depending on your preference, you can sign up for an in-person class or complete an online one at your own pace. Keep in mind that whatever you do, the course needs to satisfy your lender’s requirements — like a course designed around HUD standards. Check with your loan advisor for specifics.

How much does a homebuyer education course cost?

Many homebuyer education courses are free, but paid courses are fairly affordable, costing up to $100. Think of the potential money you’ll spend on a course as an investment in your future home. The knowledge you gain might help you save thousands of dollars on homeownership over the long run.

Again, make sure you choose a HUD-approved course, especially if you’re trying to meet the requirements required by lenders or housing assistance programs

How do I find first-time homebuyer classes near me?

First, decide whether you want to take one online or in person, as that’ll determine what options are available to you. You can search the HUD database of approved counseling agencies that might offer classes in person or contact your state housing agency by browsing HUD’s list.

Check with your real estate agent or loan advisor to see if they can recommend programs that are HUD-approved. 

Ready to explore your loan options and learn about first-time homebuyer education courses? Contact a local Finance of America Mortgage Advisor today for guidance.

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