What is a downside for a first-time buyer securing financing through a land contract?

When a first-time buyer secures financing through a land contract, one significant downside is that they may not be able to utilize most first-time homebuyer programs. Many of these programs are designed to assist buyers who are obtaining traditional mortgage financing. These programs often come with benefits such as lower interest rates, lower down payment requirements, and assistance with closing costs.

Land contracts, on the other hand, typically do not qualify for such programs since they are not formal mortgage loans but rather an agreement between the buyer and seller. As a result, buyers using land contracts may miss out on these financial advantages that are available through traditional mortgage options, which can impact their overall budget and financial readiness for homeownership.

The other options provided, such as tax deductions for interest or the need for larger down payments, while potentially relevant, do not directly highlight the specific limitations on access to first-time homebuyer assistance programs. Therefore, the inability to utilize these programs stands out as a prominent concern for buyers considering a land contract.