As anyone who has seen "House Hunters" or any other home shopping TV show knows, finding your first home to buy is all about tradeoffs.

If you want to live near the center of town, you probably won't get a big back yard. If you can only afford a small home, it may not have the big bathroom you're looking for. Two-car garages are a lot harder to find than one-car garages.

If your budget is limited as a first-time homebuyer, such as for Millennials who are just starting their careers, these are choices that can leave you disappointed. You can't have it all, especially when it comes to buying a house that's within your budget. Other challenges of a small budget include possibly buying a home in an older neighborhood, a fixer-upper, or having poor schools in the area.

But there are ways to get around the challenges of being a first-time homebuyer, starting with facing the reality that you won't be able to afford everything on your ideal home checklist, says Ryan Gable, a real estate broker and CEO of StartingPoint Realty in Chicago.

There's also the reality that a first home isn't a permanent home, with new owners staying there for four to seven years, Gable says.

"It's about getting them to the point that this is not going to be the home that they're going to live in for the rest of their lives," he says.

"Opportunity properties"

A good, inexpensive home can be found in older neighborhoods, though that doesn't necessarily mean an older neighborhood with high crime and poor schools. Buyers should look for up-and-coming neighborhoods with "opportunity properties," says Kathy Cummings, a Bank of America home buying expert. These can include older homes, fixer-uppers, or homes that need an updated kitchen, Cummings says.

To buy a property "as is" that needs renovations, an FHA 203(k) Renovation Loan, also called a "single close loan," offers a loan for the purchase price, plus money for renovations and minus a down payment.

The loan requires as little as 3.5 percent down to qualify; includes most renovations that add value to the property; covers materials, labor and expenses such as permits and fees; and applies to owner-occupied primary residences from one to four units.

If home buyers are set on one geographic area that's out of their price range, one way to still found a house they can afford is to expand the search to a few miles outside of the area, says Jessica Althoff, a real estate agent in Southern California.

"Usually a few miles in one direction or another can really reduce the prices in this area without changing someone's lifestyle," Althoff says.

Financial help

Many states and counties provide first-time homebuyer programs that assist with down payment and closing costs, says Hillary Legrain, vice president of First Savings Mortgage Corp. in McLean, VA.

"Using these programs it is possible for a first-time buyer to buy a home with no money own," Legrain says.

There are also low down payment options, she says, such as a Fannie Mae 30-year fixed rate conforming loan that requires only 3 percent down up to a $417,000 loan.

The California city of Santa Ana, for example, offers a deferred payment loan with no interest of up to $40,000 to help with the down payment, Althoff says. The maximum home sale price is $459,000 and the buyer must put at least 1 percent of their own money down, she says.

Orange County, Calif., allows some home buyers to take up to 15 percent of their interest payment as a credit against their income taxes, she says. This allows their tax withholding to drop, increasing their take-home pay and allowing them to afford a higher mortgage.

Millennials buying less house

While practically any house is better than an apartment as far as size- especially to a newly married couple or a family with a small child - some of Gable's young clients are opting to buy a smaller home than they can afford for a variety of reasons, he says.

They may qualify for a $350,000 loan, but only want to spend $275,000, he says, because they've lived through the financial problems of the past few years and don't want to lose a home to foreclosure if they lose their job.

"They're reluctant to kind of go to that maximum amount," says Gable, who has seen buyers with bigger down payments the last few years.

Student loan debt also has a large impact on a home buying decision, he says, even if it's only for six to 12 months.

Millennials have the "mental thought that they already have $100,000 in student loan debt" and don't want to take on a $250,000 home debt, Gable says, and delay a home purchase for a few years.

Cummings, the mother of two Millennials, says her children choose to be house poor so they can spend their money on other things such as travel.

"They're learning a lot about the pitfalls of maxing themselves out," she says.

Published on March 9, 2015