What is a potential drawback for first-time buyers securing financing through a land contract?

Securing financing through a land contract can pose challenges for first-time buyers, particularly with regard to their eligibility for various first-time homebuyer programs. These programs often provide valuable assistance, such as down payment assistance, reduced interest rates, or favorable loan terms, aimed at making homeownership more accessible for individuals who are purchasing their first home.

However, land contracts are typically considered non-traditional financing methods. They do not involve conventional lenders or traditional mortgages, which can limit access to programs specifically designed for first-time buyers. Many of these programs require a formal mortgage from a recognized financial institution, and since a land contract usually involves private agreements between the buyer and the seller, compliance with the prescribed guidelines of these assistance programs may be lacking.

This limitation can hinder first-time buyers from benefiting from the financial support designed to ease the burden of securing a home, making it a significant drawback of using a land contract as a financing option.