Which Homebuyer Class Do You Actually Need?

There are plenty of free homebuyer classes, including the one I teach. But if you're using a specific loan or down payment program, the class you take can matter. Some programs only accept their own course, and a certificate from a different one won't count.

The good news: you don't have to guess. The requirement always comes from the program, so once you know which program you're aiming for, the right class is easy to find.

Three kinds of "homebuyer class"#

People use "homebuyer class" for three different things:

Type	What it is	Who requires it
Homeownership education	A structured course, online or in person, that ends with a certificate	Some loan programs, and most down payment assistance programs
Housing counseling	One-on-one sessions with a counselor at a HUD-approved agency, about your own finances	Most local down payment programs, often in addition to a course
General classes	Short sessions from agents, lenders and community groups, like mine	Nobody. They're for understanding your options

The first two can satisfy a requirement. The third can't, but it can save you time by pointing you at the right one.

Who asks for what#

Low down payment conventional loans

Fannie Mae's HomeReady and Freddie Mac's Home Possible loans require homeownership education when every buyer who'll live in the home is a first-time buyer. At least one of you has to complete it before closing. Fannie Mae also requires it on a purchase with more than 95% financing when every buyer is a first-time buyer.

Each has a free online course that counts:

• Fannie Mae HomeView. Self-paced, with a final assessment you need to pass at 80% or higher to get the certificate.
• Freddie Mac CreditSmart Homebuyer U. Self-paced, with a certificate at the end. Freddie's shorter "CreditSmart Essentials" doesn't come with a certificate, so make sure you take Homebuyer U.

Both companies also accept education or counseling from other independent providers, including HUD-approved counseling agencies. The provider can't be your lender.

Virginia Housing loans

Virginia Housing, the state's housing finance agency, requires homebuyer education for first-time buyers on its loans. It runs its own free course, online or in person. Check its site for the current format and how long the certificate stays valid.

NACA

NACA's free Homebuyer Workshop is the first step in the program, and no other class replaces it. You can attend one live or take NACA's self-paced version. At the end you get a five-digit code that you need to set up your NACA member portal account. Without it, you can't book your first counseling appointment.

Local down payment assistance

Here's where most people get caught out. Local assistance in the Richmond area usually runs through a HUD-approved counseling agency, and the agency's own education and counseling are part of the program:

• HOME of Virginia requires its own homebuyer education course and one-on-one counseling, even if you've already taken a class somewhere else. Henrico's and Chesterfield's first-time buyer programs both run through HOME.
• SCDHC builds counseling into its down payment program, and its VIDA matched savings program starts with a required orientation workshop.
• Henrico's employee program requires a HUD-certified homebuyer education course and six hours of one-on-one counseling before you sign a purchase agreement.

The details for each are in the program guide, and where to get free housing and credit counseling covers the three main local agencies.

Standard FHA, VA and conventional loans

A standard loan with a larger down payment often has no class requirement at all. If you're not using HomeReady, Home Possible, Virginia Housing, NACA or a local assistance program, ask your lender before you sign up for anything.

Certificates: the details that trip people up#

• How recent it has to be. Each program sets its own window. Fannie Mae's HomeView certificate shows a completion date but no expiration, and lenders can set their own limits. Others expire. Ask before you take a course months ahead.
• The name on it. HomeView prints the name you enrolled with. Use the exact name that will be on your loan application.
• Who has to take it. Usually one borrower is enough for conventional loans. Local programs may want everyone on the loan. Check before you assume.
• When it's due. Conventional programs need it before closing. Some assistance programs need it before you sign a contract, which means you finish it before you shop.

How to know which one you need#

1. Talk to a lender first. Find out which loans and assistance programs you're likely to qualify for. That decides everything else.
2. Ask which certificate that program accepts, how recent it has to be, and whether everyone on the loan needs one.
3. If you're using local assistance, contact the agency before taking any other class. Its own course is usually required anyway.
4. Take the required class early. Classes fill up, and counseling takes weeks.
5. Save the certificate as a PDF somewhere you can find it. Your lender will ask for it.

Before you sign up

Where a general class fits#

A short general class like mine won't satisfy a program's education requirement. That's not its job. In 30 minutes it gives you the whole process, the main loan types and the local help that exists, so you know which program to aim for and which certificate you'll need. Then you can spend your hours on the course that actually counts.

The bottom line#

Don't take a class just to collect a certificate. Find out which program you're likely to use, ask which course it accepts, and take that one. If local assistance is part of your plan, start with that agency, because its course is usually the one you need.

Education requirements are set by each loan and assistance program and can change. Confirm with your lender and the program before you enroll.