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Considering a down payment at home can sometimes feel impossible, especially if you’re the first person. The good news is that many first-time home buyer grants are available to help bridge the savings gap. These programs are offered by banks and nonprofit organizations, as well as state and local governments.
What is a first-time home buyer grant?
A critical feature of first-time home buyer grants is that they don’t have to pay back the money. This funding not only covers the down payment of your home, but also supports the closing costs.
First-time home buyer grants differ from other types of down payment assistance that require you to repay the funds or meet certain requirements to get your funds allowed. It also differs from affordable mortgage programs with perks such as lower mortgage rates and lower mortgage premiums.
How to qualify for your first homebuyer grant
First-time homeowner grants tend to be directed to low-to-moderate income borrowers. The exact definition depends on your income, location and size of your household, but generally speaking, households earning less than 80% of your local median income (AMI) are eligible as “low income”, while households earning more than 80% of your AMI are eligible as “moderate income.” You can find your ami here.
Beyond income limits, most grant programs share some general requirements, such as:
- Home price limit: Again, these restrictions vary widely based on state or local housing markets.
- Borrower contribution: Buyers usually have to tip with some cash. Often it is 1% of the purchase price or $1,000, whichever is greater.
- Residency Status: Most grant programs require that the home you are purchasing is your main residence, not the rental or second home.
- HomeBuyer Education: Many grant programs require you to complete a homebuyer education course before you receive the funds.
8 Subsidies to consider for first-time home buyers
1. National HomeBuyers Fund
The non-profit National Home Buyers Fund sponsors a down payment and closure fee grant of up to 5% of the purchase price of your home. You don’t need to be your first home buyer to actually qualify, but you will need to find a mortgage lender who will join the program and allow the funds. You can call the organization to find a local lender at 866-643-4968.
2. Bank of America Grant Program
Bank of America offers two grant options to help with down payments and closing costs. America’s Home Grant offers up to $7,500 lender credit for closing costs, and down payment grants provide up to $10,000 down payment help. However, you will need to get a mortgage from Bank of America and your down payment grant could count as taxable income.
3. Chase Home Buyer Grant
Chase HomeBuyer Grant is available to home buyers in certain areas of the United States. The program will first purchase interest rates, then lender fees, and then grants of up to $5,000, which apply to down payments. HomeBuyer Grant is available to applicants seeking a Dreammaker loan from a bank or a traditional FHA or VA mortgage.
4. Wells Fargo Grant Program
Wells Fargo offers two types of support grants: HomeBuyer Access Grant and Down Payment Help with The Dream. Plan. house. Credit for closing costs. The former offers up to $10,000 to eligible borrowers in certain metro areas. Closure Cost Credit offers up to $5,000 for low-income earners in certain areas. Like other grants offered by banks and lenders, you will need to obtain a mortgage from Wells Fargo to qualify. Eligibility can be checked on the Wells Fargo website.
5. Possible home reedy and home credits
If you plan to get a traditional home-ready or potential home loan by February 28, 2026, you will also be eligible for a $2,500 credit if you have “very low income.” At least one of the mortgages is also a first-time home buyer. Credits can be applied to down payment or closing costs.
6. State and local first-time home buyer grants
Many states and cities offer grant programs for first-time home buyers. Check with your state Housing Finance Bureau or real estate agent for more information.
A local mortgage lender may be able to direct you towards free money. Here are some examples:
7. Good Neighbor Next Door Program
Available to law enforcement officers, teachers, firefighters and emergency medical technicians, the Good Neighbor Next Door program is overseen by the U.S. Housing and Urban Development Agency and offers a 50% discount on homes in designated revitalized areas. As long as you have lived there for three years, you don’t have to pay back that discount and get half the property of the date price.
8. HomePath compatible buyer program
The HomePath Ready Buyer program is courtesy of Fannie Mae. With this program you can earn up to 3% of the purchase price of your home to help with the closure costs. However, you will need to purchase the HomePath property, a home owned by Fannie Mae. These are foreclosures that can require significant work in most cases.
How to apply for a first-time home buyer grant
- the study. See which grants are eligible from local and state governments, nonprofits and lenders.
- Improve your credit score. Many first-time home purchase grants require a minimum credit score. Paying on time and paying off your debt can improve your score.
- Collect documents. To apply, you will usually need to provide an extensive document of income and assets, including at least two months’ recent pay stubs in addition to employment verification.
- Check the guidelines. Eligibility awards vary.
- Apply. To apply for a grant, please follow the organization’s application form.
Other support for first-time home buyers
If you can’t find a grant for a first-time homebuyer who works for you, you’re not in bad luck yet. There are other low-cost first-time home buyer loans and programs. You also qualify for a granted loan. This could work like a grant. This means that if you meet certain requirements, you do not need to pay off the loan.
Here are a few options to explore:
- DPA Second Mortgage:Downpayment Support (DPA) Second Mortgages are available through many state housing finance institutions. DPA’s second mortgage program will allow you to apply for a 30-year mortgage to fund your home, and then apply for another small mortgage to support your down payment or closure fee. Just like the first mortgage, this second loan comes with interest, which may be lower than the first loan, but will repay your balance over time.
- DPA Deferred Payment Loan: Instead of requiring you to start paying off your down payment support funds immediately, some programs allow you to postpone these payments until you sell your home or refinance or repay your mortgage. During that time, the amount you owe will not grow as support is not interested.
- DPA Tolerant Loans: A generous loan is the closest cousin to a home subsidy because it allows you to be free. For example, you may be able to borrow $5,000 for your down payment, and your loan balance will be reduced over a 10-year period each month. If you stay at home for 10 years, it is completely forgiven. If you move within 10 years, you will need to pay back some of the loan.
- Individual Development Accounts (IDAs): IDAS is a matching savings account typically designed for low-income individuals. IDAS is provided through certain public housing organizations and private nonprofits, and usually offers a certain amount of dollars to a certain amount for savings targets such as down payments and closing costs.
