Saving up for a down payment can be a hurdle for many would-be home buyers. Luckily, first-time home buyers can turn to grants.

There are lots of assistance programs to help home buyers purchase homes, and grants — which you don’t have to repay — are often the most attractive.

Let’s explore your homeownership grant options as a first-time buyer.

Check your home buying eligibility. Start here (Apr 26th, 2025)

What is a first-time home buyer grant?

First-time home buyer grants offer financial assistance to put homeownership within reach for buyers. As an eligible home buyer, you can use the funds to help cover your down payment and closing costs.

The best part about first-time home buyer grants is that you never have to pay the money back.

You can find first-time home buyer grant options available through the federal government. But many state and local governments also offer home buyer grants.

9 types of first-time home buyer grants

A first-time home buyer grant might be just what you need to close on a home purchase. Here’s a closer look at the first-time home buyer grant programs you might qualify for.

1. State first-time home buyer grants

Most states offer a down payment assistance program to qualifying residents. Since this is on a state level, the rules for first-time home buyer grants will vary based on where you live.

Some states and local governments offer outright grants, which you don’t have to pay back. Typically, these range from a few thousand dollars to 5% of your home’s purchase price.

Other states offer forgivable loans, also known as silent mortgages, which are similar to grants. These second mortgages don’t come with a monthly payment and are forgiven after a set period of time. Generally, this type of forgivable loan comes with requirements you’ll have to meet to qualify for full forgiveness. For example, you might have to live in the home for a set number of years before the loan is forgiven.

Even if your state doesn’t offer grants, it may offer a repayable down payment loan. When you take out a first-time home buyer down payment loan, it will come with a monthly payment. The good news is that the interest rates on these down-payment loans are usually relatively low.

2. National Homebuyers Fund

The National Homebuyers Fund offers both grants and three-year forgivable loans to qualifying buyers. The fund is designed to support low-income and moderate-income home buyers in the home-buying process.
Although the exact amount varies based on your situation, you can receive up to 5% of your loan amount. To move forward, you’ll need to work with a mortgage lender that participates in the NHF program.

3. Chenoa Fund

The Chenoa Fund offers down payment assistance to first-time buyers, with a focus on borrowers with strong credit and low to moderate income.

Instead of an outright grant, the Chenoa Fund provides three-year, forgivable loans. It also offers down payment loans that must be repaid. Your financial situation will determine which opportunity you qualify for.

You can receive a forgivable loan of up to 3.5% of the purchase price. But you’ll need a minimum credit score of at least 600 to apply. Of course, the forgivable loan is preferable. However, borrowers that don’t qualify might find a solution in the Chenoa Fund’s repayable loan.

4. Community Seconds

Community Seconds is a program available through Fannie Mae. Although this program doesn’t offer grants outright, it allows you to finance up to 105% of the home’s sale price so that you don’t have to make a down payment upfront.

The Community Seconds program doesn’t have income requirements though it is intended for low- to moderate-income borrowers, and to qualify, borrowers must earn less than 120% of the median income for their area.

5. Affordable Seconds

Freddie Mac offers Affordable Seconds, which is very similar to Fannie Mae’s Community Seconds program. You can finance up to 105% of the purchase price of the home, which gives you the funds you need to cover the down payment and closing costs.

You’ll need to have a credit score of at least 660 to work with this loan type. This program has income requirements similar to the Community Seconds program.

6. Good Neighbor Next Door

The Good Neighbor Next Door program is offered through the U.S. Department of Housing and Urban Development (HUD). It helps workers in certain professional fields move forward with a home purchase.

Through the program, those in select professions can qualify for funding of up to 50% of the home’s list price. To qualify, borrowers are required to live in the home for at least 36 months. Plus, eligible properties are in revitalization areas, which often correlate with less-than-ideal neighborhoods.

Some of the professions that qualify for this program include law enforcement officers, teachers (pre-K through 12th grade), firefighters, and emergency medical technicians (EMTs).

7. Disabled buyer grants

If you have a disability, you may qualify for special home buyer programs. Some programs that offer assistance for disabled home buyers include VA loans, HUD Housing Choice Vouchers, and nonprofit home buyer assistance grants.

In addition to these programs, disability income can help you to qualify for a mortgage, so be sure to include it on your application.

8. Private lender grants

A handful of private mortgage lenders offer incentives to first-time home buyers. Typically, these programs are designed to help borrowers who might otherwise face additional hurdles to home ownership, such as lower incomes or limited savings for a down payment.

Some of the available grants from private lenders include Chase Bank DreaMaker grants of $5,550 and the Bank of America Community Affordable Loan Solution with no down payment requirement.

Keep in mind that these mortgage programs each have their own eligibility requirements. And typically, these loans are only available for buyers purchasing a single-family home.

9. Downpayment Toward Equity Act

There has been some recent buzz around a government grant program that would offer $25,000 in grant money to aspiring home buyers. A proposed congressional bill — the Downpayment Toward Equity Act of 2021 — would enable qualifying first-generation first-time home buyers to access a grant of $25,000.

The bill has not yet passed in Congress. However, if it passes, this sizable grant could be a huge boon for first-time home buyers.

Check your home buying eligibility. Start here (Apr 26th, 2025)

Who qualifies for first-time home buyer grants?

The requirements for first-time home buyer grants vary based on the specific grant program. That said, you’ll typically need to have a credit score of at least 620, a debt-to-income ratio below 43%, a reliable income, and two years of stable employment.

In addition to these requirements, many grant programs also have income limits. For example, several of the programs above require that your household income be less than 120% of the area’s median income.

In some cases, first-time home buyer grants require a minimum contribution from the borrower. For example, you might be required to contribute a percentage of the home purchase price or a few thousand dollars out of your own bank account. Plus, if you get a down payment grant, you’ll still likely need to pay for closing costs separately.

Finally, you’ll likely need to commit to a first-time home buyer education course. Although these are sometimes free, you might have to pay for a specific class before applying for your mortgage loan grant.

Other first-time home buyer programs

A first-time home buyer grant isn’t the right fit for every buyer. Here’s a look at some of the other assistance programs that could help you to purchase a new home.

• Down payment assistance programs: Down payment assistance (DPA) programs offer a second mortgage for a smaller amount to cover the down payment and closing costs. Typically, these loans come with lower interest rates.
• Deferred-payment loans: A deferred-payment loan gives you access to the funds you need for the down payment but you won’t have to start repaying the loan immediately. Depending on the loan, you might be able to start repaying it after you pay off the mortgage, refinance your mortgage, or sell your home.
• Forgivable loans: Some forgivable loans are available to cover your down payment costs. However, these often come with strings attached. For example, you might have to commit to living in the home as a primary residence for five years before the loan is forgiven.
• Zero down payment loan programs: Some home loans don’t require a down payment at all. With a zero down payment loan program, you can close on a home without putting down thousands of dollars.

As a home buyer, it’s helpful to compare all of your options. That’s especially true if this is your first mortgage. If you have specific questions, don’t be afraid to work with one of the counseling agencies available to home buyers. When you find the right fit, you’ll be ready to move forward with your home purchase.

First-time home buyer grants FAQ

Who qualifies as a first-time home buyer?

If you haven’t owned a home in the last three years, you qualify as a first-time home buyer for most purposes.

What is an NHA grant?

NHA grants, available through the Navajo Housing Authority, are available to help eligible borrowers become homeowners.

Which loan type is best for first-time home buyers?

The right loan type for first-time buyers depends on the details of their specific situation. For example, many first-time homebuyers will find their best option through the FHA loan program. That said, veterans are likely to find the best deals through the VA loan program (which requires no private mortgage insurance), while rural residents might find better options through the USDA loan program.

What is Biden’s $25,000 Downpayment Toward Equity Act?

The Downpayment Towards Equity Act would provide down payment assistance of up to $25,000 to first-generation first-time home buyers. As of January 2024, this bill has not become law.

Can I buy a house with zero money down?

Yes, some home loan programs allow you to purchase a home with zero money down. You’ll need to meet certain home buyer requirements to qualify but many 100% financing home loan programs offer great deals to buyers who are eligible.

The bottom line: Assistance is available for first-time homebuyers

As a first-time home buyer, you have access to a wide range of assistance options, and there are many ways to get the funds you need to finalize your home purchase.

Check your home buying eligibility. Start here (Apr 26th, 2025)