Affordable Housing Help: Top Federal Loan Programs for Buyers as Mortgage Rates Hit 2025 Lows

Lower borrowing costs and easing home prices could help buyers get back into the market

There’s finally some good news for Americans looking to buy a home.

After months of high borrowing costs, average 30-year mortgage rates have fallen to 6.19%, down from 6.27% last week, according to Freddie Mac.

This may seem like a small change, but it’s the lowest mortgage rate of 2025 so far, and it could make a big difference for buyers who have been waiting for housing to become more affordable.

Some cities are also seeing slightly lower home prices, giving buyers more room to negotiate.

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Why Mortgage Rates Are Falling

Experts say the drop in rates is connected to growing expectations that the Federal Reserve will cut interest rates in October.

The Fed doesn’t directly control mortgage rates, but its decisions affect the 10-year Treasury yield, which lenders use to set home loan rates.

When investors expect the Fed to lower rates, borrowing costs often start falling ahead of time. That’s what appears to be happening now.

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Helpful Homebuyer Programs to Know

If you’re planning to buy a home soon, these U.S. government-backed programs can make it easier to qualify or save money:

• FHA Loans – Backed by the Federal Housing Administration, these loans allow lower credit scores and smaller down payments. 

• USDA Loans – Help low- to moderate-income buyers purchase homes in rural areas with no down payment. 

• VA Loans – Offer affordable financing for eligible veterans, active-duty service members, and their families. 

• Homeowner Assistance Fund (HAF) – Provides financial help for homeowners struggling with mortgage payments. 

Signs the Housing Market Is Picking Up

Recent reports show that the housing market is starting to move again.

The average U.S. home sold for 1.4% less than the asking price in September, the biggest price drop for that month since 2019.

The National Association of Realtors (NAR) also said home sales rose at their fastest pace in seven months, suggesting more buyers are taking action as rates dip.

Challenges Still Remain

Even with this good news, it’s not all smooth sailing. The number of homes for sale is still low, keeping prices higher in some areas.

And for first-time buyers, added expenses like property taxes, insurance, and closing costs still make it tough.

Still, experts see hope that things are starting to balance out. If the Fed moves ahead with a rate cut, mortgage rates could drop even further, giving buyers a little more breathing room before the end of the year.

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