#1 - I previously owned a home so I'm not eligible for these incentives

Even though "first time home buyer" implies no previous home ownership, the criteria for most of these programs and incentives is that you haven't owned a home in the last three years.

A lender is going to review your last three years of tax returns to verify you didn't claim mortgage interest or property tax deductions.

So, If you were one of the early casualties of the "housing meltdown" in 2007 and 2008 you still may be eligible for one or more of these programs.

Note: Even if it's been less than three years, there are incentives and down payment assistance programs available for those who don't currently own a home or primary residence.

#2 - I have to be "low income" to qualify for first time home buyer programs

The stated purpose of these programs and incentives is to provide "homeownership assistance to low and moderate income families".

But "low to moderate" is relative and you'll need someone with experience in these programs to accurately calculate your income according to program guidelines.

All first time home buyer programs have income limits and these income limits are based on the "HUD median income limit" for your area (generally by County).

The program may be limited to 50%, 80% or 120% of HUD median income and the size of your family also factors into the calculations.

For example in Riverside County, CA if the program guidelines are 80% of HUD median a family of 4 can make up to $52,000 a year and be eligible. If the program is at 120% of HUD median then the same family of 4 can make up to $78,000 a year.

A family of 4 looking to use the State of California first time home buyer and down payment assistance programs to buy their first home can earn up to $93,240 in Riverside County.

In San Diego County this number increases to $115,640 (for a family of 4 or more) and $130,200 in Orange County, CA.

#3 I've saved for my down payment, I don't need down payment assistance

It's true you don't NEED it, but it may be a smart financial move to use it if you qualify.

Owning your first home, is more than just making a monthly payment. There are moving expenses and if you're going to be one of the thousands of first time home buyers who will be purchasing a bank owned or foreclosed property, there undoubtedly will be some deferred maintenance, which will need your attention.

If you exhaust your savings just to buy your first home then those upgrades and repairs may have to wait.

On the other hand, if you qualify and take advantage of the first time home buyer incentives and down payment assistance, you'll still have that money in the bank, and use it for the things that will turn that REO into YOUR home.

The down payment assistance can also give you an advantage if you happen to get into a competitive bidding situation.

Many first time home buyers have saved enough for their down payment, but as part of their offer are asking the seller to pay all or a portion of their closing costs.

If you have down payment assistance, you can use your savings to pay closing costs and then be submitting a much more competitive offer, because the bank/seller will have a higher "net" which they really like.

First time home buyer programs and incentives require a level of expertise that not all Realtors and Lenders have, so it's important that both your Realtor and Lender are specialists in these programs.