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First-Time Home Buyer Class: Why Take It?

A first-time home buyer class can be the ticket to grants, down payment assistance and a lower monthly payment.

Hal M. Bundrick, CFP®
Abby Badach Doyle
Chris Jennings
Michelle Blackford
Updated
If you think you’re ready to buy a home, but you don’t know where to start, a first-time home buyer class can cover the basics. In some cases, you might be required to take a class to qualify for a low down payment mortgage, a grant or down payment assistance.
Even if the class isn’t mandatory, you’ll learn shopping and budgeting tips, which can lead to a lower monthly mortgage payment. Since many first-time home buyer classes are free, that’s time well spent.
Here’s what to expect if you’re signing up for a first-time home buyer class near you.

What is a first-time home buyer class?

A first-time home buyer class is a workshop designed to help borrowers navigate the homebuying process. Participants who complete the course — which may involve passing a quiz — typically earn a certificate that can qualify them for grants and down payment assistance programs.
If you’re looking for a course on your own, choose one that meets the National Industry Standards for Homeownership Education and Counseling, such as Fannie Mae HomeView or Freddie Mac CreditSmart Homebuyer U. This indicates that the curriculum is reliable and trustworthy.
If you need a class to qualify for down payment assistance or other funding, many programs will recommend a class that meets these standards.
» MORE: Best mortgage lenders for first-time home buyers

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Who offers first-time home buyer education?

The U.S. Department of Housing and Urban Development (HUD) has a nationwide network of housing counseling agencies. These agencies provide first-time home buyer workshops, one-on-one counseling and other services. Classes are also offered by other providers, including businesses, nonprofits and community organizations.
You can take a first-time home buyer class from:
🤓 Nerdy Tip
If you need a completion certificate to receive a loan or grant, make sure the class qualifies before you take it. For example: Some lenders might not allow online classes or limit which providers are acceptable.

What is covered in a first-time home buyer class?

Classes come in different lengths and delivery methods, most commonly in person or online. Self-service online courses let you learn the material at your own pace.
A first-time home buyer course is about eight hours’ worth of material, according to the National Industry Standards for Homeownership Education and Counseling. However, some approved online courses issue a certificate of completion after three to four hours of self-study and a passing grade on a quiz.
A typical class will cover topics such as:
  • Budgeting for homeownership.
  • Determining how much house you can afford.
  • Understanding mortgage loan products and interest rates.
  • How to comparison shop real estate agents and lenders.
  • Navigating the homebuying process, from home shopping to closing.
  • Ongoing costs of homeownership, such as maintenance and taxes.
  • Understanding local, state and federal laws.
  • How to avoid foreclosure.
Home buyer education courses are required for some loan programs and can be especially beneficial for people unfamiliar with the homebuying process or those recovering from past financial setbacks, such as a foreclosure.
For buyers reentering homeownership after a foreclosure or other housing setback, the course can help identify common pitfalls and provide a stronger foundation for future financial decisions.
» MORE: Check your credit score for free

When should you take a first-time home buyer education course?

Many borrowers take the class as a lender requirement to qualify for a particular loan or assistance. However, it can be a wise first step in any homebuying journey. That way, you have some financial savvy before you start making decisions — say, shopping around for a mortgage lender or picking a real estate agent.
Prospective buyers will benefit from taking the course as soon as they decide to pursue homeownership, rather than waiting until they are ready to make an offer.
By providing guidance on budgeting, financing and affordability, these courses can help buyers avoid purchasing a home that is beyond their means.
» MORE: How much money do you need to buy a house?

How much does a home buyer class cost?

Many first-time home buyer education courses are free. Your lender or real estate agent might even cover the cost. Some providers might charge a fee, usually $100 or less.

How to find a home buyer education course

Start with housing agencies in your state that offer first-time home buyer assistance programs. Even if you don't financially qualify for a grant or down payment help, the agency can likely direct you to home buyer education programs.
» MORE: NerdWallet’s first-time home buyer guide
NerdWallet writer Isabella Angelos contributed to this story.
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