First Time Home Buyer Programs and How to Find Yours

First time home buyer programs are loans, grants and credits that make buying your first home cheaper, usually by covering part of your down payment or closing costs, lowering your interest rate or mortgage insurance, or giving you a tax credit. They come from three main places: federal loan programs (FHA, VA, USDA and low down payment conventional loans), your state's housing finance agency, and local city, county, nonprofit and employer programs. The fastest way to find what you qualify for is to start at your state housing finance agency's official website, then work down to your county and city.

Program details change often, sometimes several times a year, so treat any list of amounts or income limits you find online (including general figures here) as a starting point and confirm it at the official source.

Who counts as a first time home buyer?

The definition is broader than most people think. Many programs use a definition similar to HUD's, which generally treats you as a first time buyer if you have not owned a principal residence in the past three years. Under that kind of rule:

• If you owned a home years ago, sold it and have rented for more than three years, you may qualify again.
• Some definitions include a single parent or displaced homemaker who only owned a home with a former spouse.
• Some programs drop the first time requirement entirely, waive it in designated "target areas," or waive it for veterans.

If you owned before, compare your exact ownership dates with each program's definition. Many assumed repeat buyers actually qualify.

The main types of first time buyer assistance

Almost every program fits one of these types, and the type matters more than the headline amount.

1. Grants. Money you never repay if you follow the rules. The least common and usually the most limited.
2. Forgivable loans. A second loan on the home that is forgiven over a set number of years while you live there. Sell, refinance or move out early, and you may owe part of it.
3. Deferred payment loans. No monthly payment, often zero or low interest, but repaid in full when you sell, refinance or pay off your mortgage. Some take a share of the home's appreciation instead.
4. Repayable second loans. Low-rate loans with monthly payments. They add to your monthly cost but can help you buy sooner.
5. Mortgage credit certificates (MCCs) and below-market first mortgages. No cash up front, but lower ongoing costs. An MCC can give you a federal tax credit for part of the mortgage interest you pay each year, subject to limits.

Alongside these, the main federal loan options many first time buyers use are:

• FHA loans: lower down payment and more flexible credit standards than many conventional loans.
• VA loans: for eligible veterans, service members and some surviving spouses, often with no down payment.
• USDA loans: for eligible homes in qualifying rural and some suburban areas, often with no down payment.
• Low down payment conventional loans: programs designed for buyers with modest incomes and small down payments.

Expect strings attached: income limits (often tied to area median income), purchase price caps, a requirement that you live in the home, a homebuyer education course, minimum credit scores, and the rule that most state programs can only be used through approved lenders.

How to find first time home buyer programs in your state

Set aside about two hours, open a spreadsheet, and search in four layers.

1. State. Find your state housing finance agency (HFA). Search "[your state] housing finance agency" and confirm it is the official site, or use the member directory of the National Council of State Housing Agencies. Look for a "Homebuyers" section and record each program, its assistance type, income and price limits, credit requirements, education rules and participating lenders.
2. County. Search "[your county] down payment assistance" and use only official county pages.
3. City. Check your city's housing or community development department. Many programs require the home to be inside city limits, which can differ from your mailing address.
4. Nonprofits, employers and lenders. Ask a HUD-approved housing counselor about local nonprofits, ask your HR department about homebuying benefits, and ask local banks and credit unions about first time buyer grants. Teachers, first responders, health care workers and veterans should also look for programs aimed at their profession.

For each program, note the official link and the date you checked it. Recheck your top two monthly until you buy, because funding can pause and reopen.

Where to start in popular states

The statewide agencies below are the right first stop. Check their sites for current programs, then follow the county and city layers.

• Texas: two statewide entities run homebuyer programs, the Texas Department of Housing and Community Affairs (TDHCA) and the Texas State Affordable Housing Corporation (TSAHC). Check both, then your city and county, since many large Texas cities run their own.
• Florida: Florida Housing Finance Corporation. Many counties and cities also offer assistance through the state-funded SHIP program run by local governments. Get a real insurance quote early, because insurance costs can change what you can afford.
• California: California Housing Finance Agency (CalHFA). Many cities and counties have their own programs, and some in high cost areas use shared appreciation terms, so read the repayment rules closely.
• North Carolina: North Carolina Housing Finance Agency.
• Ohio: Ohio Housing Finance Agency.
• New York: State of New York Mortgage Agency (SONYMA), plus city programs, including New York City's own housing department.
• Michigan: Michigan State Housing Development Authority (MSHDA).
• Georgia: the Georgia Dream program, run by the Georgia Department of Community Affairs.

In every other state, the method is the same: HFA first, then county, city, nonprofits and employers. HUD's website also lists local homebuying resources by state, which makes a useful cross-check.

A worked example: comparing three $10,000 offers

Rosa, 31, earns a moderate income in a mid-size county and is shopping around $250,000 with an FHA loan. Her search turns up three programs, each offering $10,000. (The terms here are illustrative, to show how to compare.)

• Program A is a grant. She never repays it, but the income limit is tight and funds are on a waitlist.
• Program B is a forgivable loan, forgiven evenly over five years. If she sells after three years, she might owe about $4,000.
• Program C is a deferred zero-interest loan. She owes the full $10,000 whenever she sells or refinances, whether that is in 3 years or 20.

Rosa also asks two participating lenders to quote the same home two ways in writing: with Program B, and with a standard loan and no assistance. The assistance version has a slightly higher rate on the first mortgage, which adds a modest amount to her monthly payment. Because she plans to stay at least seven years, the forgivable loan wins: it is gone before she would likely move, and she can buy a year sooner. If she expected to move in two years, the answer would be different.

Common mistakes with first time buyer programs

• Trusting old lists. Amounts, limits and funding status change. Confirm everything at the official source and note the date.
• Looking only at the headline amount. A grant, a forgivable loan and a deferred loan of the same size are very different deals.
• Not comparing against a loan without assistance. Assistance can come with a higher rate or fees. Ask for both options in writing.
• Choosing a lender who rarely uses the program. Ask how many loans with that program they closed in the past year.
• Ignoring future refinancing. A second loan stays as a lien on your home. Ask whether the program allows subordination if you refinance later.
• Falling for fee scams. Real programs do not ask you to pay a fee to receive a "guaranteed" grant or to wire money.
• Forgetting taxes. MCCs and some bond-financed loans can carry a recapture tax if you sell within a set period. Ask the program and a tax professional how it applies to you.

Common questions

How do I know if I qualify for a first time home buyer program?

Check three things for each program: whether you meet its first time buyer definition (often no ownership in the past three years), whether your household income is under its limit for your county and household size, and whether the home price is under its cap. A HUD-approved housing counselor can review your situation for free or low cost and point you to programs you are likely to qualify for.

Do first time home buyer programs have income limits?

Most do. Limits are usually based on a percentage of area median income, so they vary by county and household size, and some programs count the income of every adult in the home. Some loan types, such as VA loans, do not use the same kind of income cap, so ask about each program separately.

Can I combine more than one first time buyer program?

Often, yes. Many buyers pair a state program with a city, county or employer program, but each one has rules about what it can be stacked with. Ask your participating lender early, because combining programs can add paperwork and time before closing.