Is There a $25,000 First-Time Home Buyer Grant?

Saving a down payment is a major obstacle for many would-be home buyers, especially borrowers looking to get their first mortgage. A down payment doesn’t necessarily need to be 20% of the purchase price. Even so, it can require borrowers to come up with a big chunk of cash. The proposed Downpayment Toward Equity Act would help first-generation home buyers fund a down payment.

Lawmakers first introduced the Act in 2021 and again in 2023. Each version expired when that Congress ended without becoming law. Sponsors introduced it a third time in 2025, but Congress has not enacted it. That means it might change before becoming law, or it might never become law.

Still, here’s what the 2025 version of the bill would do.

Check your home buying eligibility. Start here (Nov 2nd, 2026)

What is the Downpayment Toward Equity Act?

The Downpayment Toward Equity Act, most recently introduced in 2025, aims to “narrow and ultimately close the racial homeownership gap in the United States.” The 2025 bill would authorize $100 billion for grants that help first-time, first-generation homebuyers purchase their first home.

If the program became law, financial assistance for qualifying prospective homeowners could include help with down payments, closing costs and buying down mortgage interest rates. Under the 2025 bill, assistance could total up to the greater of $20,000 or 10% of the purchase price per buyer.

Under the bill, HUD would give grants to states and other eligible entities. Those entities would provide the assistance on the buyer’s behalf at closing, instead of as a tax credit.

Did the $25,000 first-time home buyer grant get passed?

No. As of October 2026, the Downpayment Toward Equity Act has not passed. Lawmakers first introduced the bill in 2021 and again in 2023. Each version expired at the end of that Congress. Then, in 2025, sponsors introduced it again as S. 967 in the Senate and H.R. 4069 in the House. Both bills are with committees and have not advanced to a vote.

In March 2023, the Biden administration included a similar first-generation down payment program in its proposed budget for fiscal year 2024. The budget asked for $10 billion. Congress did not enact that proposal.

Eligibility rules under the Downpayment Toward Equity Act

The Down Payment Toward Equity program aims to help first-time, first-generation buyers purchase their first home. Given that, not everyone qualifies for this proposed grant.

Grant requirements in the 2025 bill

If the Act passed as written in 2025, prospective homeowners would need to meet the following criteria to receive a grant:

• First-time buyers: To count as a first-time home buyer, a borrower must not have owned a home for the last three years. This means prospective homeowners who sold their last place over three years ago without purchasing another property could qualify for this grant.
• First-generation homebuyers: The grant targets home buyers whose parents or legal guardians do not own a home in any state (or did not own one when they died). The buyer’s spouse or domestic partner also cannot have owned a home in the past three years. People who spent time in foster care or institutional care can qualify under a separate test. Buyers would confirm this by signing a statement.
• Income requirements: The program would serve low-income and moderate-income borrowers. Household income cannot exceed 120% of the area’s median income. In high-cost areas, as HUD defines them, the limit is 140% of the area’s median income.
• Residency requirements: The home must be the buyer’s primary residence. A buyer who stops living in it within five years would repay part of the grant, based on how many years they lived there. No repayment is due after five years. The bill has exceptions for hardship.
• Property requirements: This down payment grant program is only available for real estate properties of one to four units. To purchase a multi-unit property, the homeowner must utilize at least one of the units as a primary residence.
• Housing counseling: A prospective borrower must complete homeownership counseling through an agency approved by the Department of Housing and Urban Development (HUD). The counseling comes before the purchase agreement or loan application.

Additional funds could be available for some borrowers

Under the bill, a grant could be up to the greater of $20,000 or 10% of the purchase price. A buyer could get a grant only once. HUD could raise those caps for socially and economically disadvantaged buyers and for buyers in high-cost areas. The 2021 version of the bill capped grants at $20,000, or $25,000 for disadvantaged buyers. The 2025 version has no $25,000 figure.

Buyers in groups presumed to be socially disadvantaged, such as Black, Hispanic, Native American and Asian American buyers, would still have to meet the income limit above.

Other down payment assistance programs for first-time homebuyers

Congress hasn’t passed the Downpayment Toward Equity Act yet. If the bill becomes law, it could provide a pathway to homeownership for many aspiring homeowners.

But if this bill doesn’t become law or you just don’t want to wait, there are other down payment assistance (DPA) program opportunities that could make homeownership possible.

Here are a few other first-time homebuyer programs available to first-time home buyers:

• Localized grants from government agencies: Some cities and states offer down payment assistance grant money for first-time home buyers.
• Forgivable loans: Some down payment assistance programs are available as forgivable loans. The program forgives the balance after a set period if you meet its conditions, such as keeping the home as your primary residence.
• Government programs: The FHA loan program and USDA loan programs can offer flexible credit score requirements and low down payment options.

Take some time to explore all of your down payment assistance options as you begin your homeownership journey. If you meet the eligibility requirements, you could move forward with the home-buying process soon.

Questions about $25,000 first-time home buyer grant claims

Does the Downpayment Toward Equity Act offer $25,000?

Not under the 2025 bill. The Downpayment Toward Equity Act is a proposed down payment grant for first-generation home buyers. If the bill becomes law, qualified home buyers could receive up to the greater of $20,000 or 10% of the purchase price. HUD could also raise that cap for some buyers. The 2021 version of the bill had a $25,000 cap for disadvantaged buyers.

Is the federal government giving $25,000 to first-time home buyers?

No. The Biden administration proposed a first-generation down payment program in its fiscal year 2024 budget, but Congress did not enact it. The bill is not law, so this nationwide grant does not exist. Local and state programs may help. See the options above.

Who qualifies as a first-time home buyer?

For the purposes of this program, a first-time home buyer is someone who hasn’t owned a home in the last three years.

When will the Downpayment Toward Equity Act pass?

No one knows when, or if, it will pass. As of October 2026, S. 967 and H.R. 4069 are in committee, and earlier versions expired without becoming law.

Should you wait for the Downpayment Toward Equity Act?

The Act could offer a path to homeownership for many Americans. However, this bill isn’t the law yet. With that, prospective beneficiaries of the program will have to wait and see if the proposal becomes law.

Check your home buying eligibility. Start here (Nov 2nd, 2026)