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Homebuyer education courses: What to expect as a first-time buyer

A woman participates in an online class
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Many homebuyer assistance programs and some mortgage lenders require borrowers to take a homebuyer education course. If you’re a first-time homebuyer, it’s a good idea to find out what educational opportunities are available to you — even if you aren’t obligated to complete a class — and learn about the home-buying process and homeownership before you complete your home purchase.

What is a homebuyer education course?

A homebuyer education course is an online or in-person class you can take to better understand what’s involved in finding, buying and owning a home. You might be required to complete this course by your mortgage lender, or if you’re participating in a down payment assistance or other housing financing program.

“This class explains the home-buying process, what is needed from the borrower to be approved for a mortgage loan, the benefits of homeownership, the challenges of homeownership, and mortgage and lending terms,” explains Wil Hendrix-Griffin, senior vice president of Affordable Lending for PNC Bank in the Chicago area.

Sometimes, the course is offered as a pass/fail class, Hendrix-Griffin says, and the buyer usually receives a certificate upon completion of the course. Other courses have a type of grading system, such as the homebuyer education class offered by Take Charge America, a Phoenix-based nonprofit credit counseling agency.

“In our course, attendees carefully review the content and their knowledge is periodically tested through a set of quizzes,” says Jeremy Wine, customer experience manager with the organization, which offers the class to buyers in all 50 states. “Those who receive a cumulative score of 70 percent or above will pass our course and receive a certificate of completion.”

What a homebuyer education course teaches you

Homebuyer education courses “take you through your entire journey, from wondering if you are ready and looking at listings to searching for a lender, being ready to make an offer, finalizing a purchase and living in your new home,” explains Danielle Samalin, CEO of Framework Homeownership, a national provider of online homebuyer education courses.

“The best courses also have supplemental content for people who want to learn even more,” Samalin says.

Wine says you can expect to learn about concepts like:

Each course is different, however, and depends on the organization offering it and the breadth of material it covers. There’s also a difference between attending a class in-person versus taking one online.

“The best courses are in-person classes that allow for substantial interaction within the class and with the instructor,” says Tony Julianelle, CEO of Atlas Real Estate in Denver. “Ideally, the class should provide time for you to develop a household budget and work through various scenarios, such as how you might pay for a large repair if it were needed.”

Cost of a homebuyer education course

Many homebuyer education courses charge a small fee that you have to pay for out of pocket.

“I’ve seen these fees range from $25 to $125 or more,” says Samalin, who notes that her organization’s course costs $75.

Some classes are offered free of charge, either funded by your lender, real estate agent, the U.S. Department of Housing and Urban Development (HUD) or the organization offering the course. Fannie Mae also facilitates a free first-time homeownership course that meets the education requirement for most loan programs.

Julianelle cautions that a free class you find on your own might not be a HUD-certified course that meets the conditions of the lender or agency requiring you to take it. So, before enrolling in and completing a homebuyer education course, be sure to confirm that it is, in fact, a HUD-approved class.

How long does a homebuyer education course take?

Many homebuyer education courses are four to eight hours long — the free Fannie Mae course takes approximately three to four hours. A course can usually be completed in one or two days, either online through a website or app or at a brick-and-mortar location like your real estate agent’s or lender’s office, Hendrix-Griffin says.

“Most courses offered online allow you to complete them at your own pace,” notes Julianelle.

When to take a homebuyer course

It’s best to complete a homebuyer education course as soon as possible, well before closing on your mortgage. Wine says most buyers complete their class before beginning their home search.

“It’s a best practice to complete this education as soon as you’re aware you’ll need it so that you’re able to find a class that works in a short timeframe,” Julianelle says. “Classes fill up quickly at most HUD-certified courses.”

Benefits of first-time homebuyer classes

You’ll walk away from a first-time homebuyer class with the knowledge you need to navigate the home-buying process. Beyond obtaining that key information, a class might be a requirement for a more affordable mortgage, which could look like:

  • A low-down payment loan;
  • Down payment and closing cost assistance or grants;
  • A lower mortgage rate; or
  • A combination of the three

These benefits (as part of a first-time buyer loan program) can save you money on your mortgage and make homeownership less costly overall — all thanks to your participation in a homebuyer class.

Should you take a homebuyer education course?

If you’re not required to take a homebuyer education course, completing one can still be a smart move. You’ll be empowered with more information about the home-buying process, and most classes can be completed relatively quickly, and for a nominal cost or no cost at all.

Ultimately, while many first-time homebuyers successfully traverse the process without taking a class, it can’t hurt to explore.

How to find homebuyer education courses 

Most homebuyer education courses and first-time homebuyer classes are offered by lenders, nonprofit housing counselors, community development corporations, organizations providing down payment assistance and real estate brokerages, Hendrix-Griffin says.

To find a housing counseling agency and course near you, check out this list provided by HUD, or look to your state housing finance authority (see this additional HUD directory) for guidance.

Learn more:

Written by
Erik J. Martin
Contributing writer
Erik J. Martin is a Chicago area-based freelance writer/editor whose articles have been featured in AARP The Magazine, Reader's Digest, The Costco Connection, The Motley Fool and other publications. He often writes on topics related to real estate, business, technology, health care, insurance and entertainment.
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