First-Time Home Buyer Market Evenly Split Between Conventional and Government Loans

This chart displays a year-to-date (through September 2025) count of 30-year fixed-rate purchase loans for First-Time Home Buyers (FTHBs), segmented by conventional versus government loan types. The data, sourced from MBS loan-level disclosures, shows a near-identical volume for both categories.

This 50/50 equilibrium is a critical strategic insight for mortgage lenders.

For Production: A product strategy focused on FTHBs cannot succeed by focusing on only one channel. A lender lacking competitive government loan products (like FHA or VA) is effectively ignoring half of the potential FTHB market.

For Servicing: This split has profound implications for MSR (Mortgage Servicing Rights) strategy. A lender originating for their own portfolio will create a servicing asset mix that is half conventional (GSE) and half government (Ginnie Mae). This necessitates a robust, dual-compliant servicing platform. Ginnie Mae servicing has distinct reporting, delinquency, and loss mitigation requirements compared to GSE servicing.

For decision-makers, this chart illustrates that a successful FTHB origination and retention strategy requires an enterprise-wide capability to efficiently produce and service both conventional and government loans.