How First-Time Homebuyer Grants and Programs Work

Buying your first home can feel out of reach, but it doesn’t have to be. Across the United States, a growing number of assistance programs are making it easier for first-time homebuyers to close the gap on down payments and other upfront costs. From federal grants to local support through participating lenders, these options can save thousands and bring the dream of homeownership closer than you might think.

What Are First-Time Homebuyer Grants and Programs?

First-time homebuyer grants and assistance programs are designed to reduce the financial barriers that often come with buying a home. Most notably, the down payment and closing costs. These aren’t loans you pay back. Grants are typically one-time financial gifts, while assistance programs may offer deferred or forgivable loans tied to staying in the home as a primary residence.

These programs can come from federal entities like HUD, state housing finance agencies, local governments, or private organizations and banks, including well-known names like Bank of America. Some offer payment assistance, while others support lower interest rates or provide closing cost assistance.

Who Qualifies as a First-Time Homebuyer?

You don’t necessarily need to be purchasing your very first home to qualify. In most programs, a first-time homebuyer is defined as someone who hasn’t owned a primary residence in the past three years.

To qualify for grants or mortgage programs, other typical requirements include:

• Residency or citizenship
• Meeting household income limits (based on your location and family size)
• Staying under a set purchase price limit
• Using the home as your primary residence
• Meeting a minimum credit score (varies by program)

Eligibility may also depend on your lender. Many programs only work with participating lenders who are approved to offer certain grants. Still wondering if you’re financially or emotionally ready? Here’s how to find out.

Types of First-Time Homebuyer Grants and Assistance

Not all homebuyer help is the same. Here are the major types of assistance programs you might come across:

• Down Payment Assistance Programs (DPAs): Often the most well-known, DPAs offer grants or loans to help you cover your down payment. These can be structured as outright grants, second mortgages, or forgivable loans that turn into grants over time.
• Closing Cost Assistance: Covers legal fees, title insurance, and other closing costs. Some programs allow you to use a portion of your grant toward these expenses.
• Employer-Sponsored Assistance: Some companies and unions offer home purchasing incentives or match programs to their employees.
• State and Local Grants: Many cities and counties offer first home buyers grant opportunities, especially for low- to moderate-income families. These programs often vary by zip code and are worth exploring regionally.
• Bank-Specific Programs: Large banks like Bank of America and Wells Fargo have assistance grants tied to their mortgage products, particularly for buyers in underserved communities.

Explore different types of grants and how they can work alongside other options like USDA Loans for a more complete strategy.

How to Apply for First-Time Homebuyer Programs

Getting access to these programs often starts with doing your research and working with the right lender. Here’s how to begin:

1. Check Eligibility Requirements: Use your location, income, and credit profile to determine what you may qualify for. Local housing agencies are a good starting point.
2. Find Participating Lenders: Not all mortgage lenders offer access to grant programs. Foyer can help you match with trusted, approved lenders.
3. Prepare Documentation: This may include tax returns, pay stubs, household income records, credit reports, and more.
4. Apply Early: Some grants are first-come, first-served with limited funds available each calendar year.

If you’re still figuring out how much to save or where to start, this step-by-step guide can help you build a plan that works!

Pros and Cons of Using a Homebuyer Grant

Homebuyer grants can be a game-changer, but like any form of financial assistance, they come with trade-offs. Here’s what to consider before applying:

Pros:

• Reduces or eliminates down payment requirements
• Lowers upfront home purchasing costs
• Often no repayment required
• Can make homeownership accessible sooner

Cons:

• Income and purchase price limits can be restrictive
• May need to stay in the home for a set period (or repay grant)
• Some assistance programs are geographically limited
• Additional paperwork and approval timelines

Frequently Asked Questions About Homebuyer Assistance

Do first-time homebuyer grants have to be repaid?

Most grants do not need to be repaid, especially if you remain in the home for a certain period, typically five years. However, if you sell or refinance early, some programs may require partial repayment.

How much money can I get from a first-time homebuyer program?

Amounts vary widely. Some national grants offer $5,000 to $10,000, while local programs may cover a percentage of your down payment or up to $25,000 depending on your location and household income.

What is the difference between a homebuyer grant and a loan?

A grant is essentially free money that doesn’t need to be repaid under normal conditions. Loans, even “assistance” ones, typically require repayment or come with terms like interest rates and forgiveness periods.

Are there income limits for first-time homebuyer assistance programs?

Yes. Most programs are aimed at low- to moderate-income households, meaning your eligibility depends on household income relative to area median income (AMI). Some programs also apply price limits to ensure affordability.

Do I need a down payment if I qualify for a homebuyer grant?

Not necessarily. Some grants fully cover your down payment, while others reduce the amount needed. Grants may be paired with low down payment mortgage loans to further ease the burden.

How long does it take to get approved for homebuyer assistance?

Timelines vary by program, but expect 30–60 days on average. You’ll want to apply early in your homebuying process to ensure your funding is ready when you need it.

Want to know which first-time buyer grants you might qualify for?

Foyer makes it easy. From connecting with participating lenders to uncovering local payment assistance options, we’re your guide to smarter homeownership.