First-Time Home Buyer Programs 2026: Grants and DPA

The phrase "first-time home buyer grant" covers a lot of things that aren't grants. Most down payment help is a second mortgage with special terms. That's not a reason to skip it. A 0% loan that's forgiven after five or ten years can work like a grant if you stay put. But it changes what happens if you sell, refinance, or move early, and that's where buyers get surprised.

What Exists Instead of a Federal Grant

Five kinds of help are real, and they stack in different ways. HUD's own FHA loans page (opens in a new tab) says down payments can be as low as 3.5% and points buyers to state and local governments for down payment help.

Grantsights decision rule: pick the first mortgage and the down payment help together, not separately. State DPA almost always requires the agency's own first mortgage, so a lender who doesn't offer it can't get you the assistance.

State Down Payment Assistance in the 15 Most Populous States

Grantsights checked each state housing finance agency's own page on October 28, 2026. Of the 15 programs below, only Virginia's main down payment program is a true grant that never has to be repaid. The other 14 are loans, many forgiven over time. Amounts are quoted as the agency states them.

Notes on the table:

• Texas has a second program, My Choice Texas Home, that also offers up to 5% and doesn't require first-time buyer status.
• Florida also offers HFA Preferred and HFA Advantage PLUS seconds of 3%, 4%, or 5%, forgiven at 20% a year over five years with its conventional loans, and the Florida Hometown Heroes program, which offers up to 5% of the first mortgage ($10,000 minimum, $35,000 maximum) as a 0% deferred second mortgage for eligible workers such as health care workers, school staff, and first responders. Hometown Heroes isn't forgivable.
• New York also lists DPAL PLUS 2026, up to $30,000 for households at or below 60% of area median income, offered first-come, first-served until funds run out.
• Illinois also offers Access Deferred, 5% of the price up to $7,500 as an interest-free loan deferred for the life of the mortgage.
• Arizona's state housing department site blocked automated reading on October 28, 2026, so this row uses the Arizona Industrial Development Authority's Home Plus program page.

Every program has income limits, purchase price limits, and credit score minimums, and most require a homebuyer education course. Check them on the agency page before you shop.

Forgivable, Deferred, Amortizing: What the Words Mean for Your Wallet

The type column matters more than the dollar figure. Here's what each one means, using the agencies' own terms:

• Grant. You never repay it. Virginia Housing says its DPA Grant "is a true grant, meaning you never need to repay it."
• Forgivable loan. A second mortgage that disappears if you meet the terms. Ohio's is "forgiven after seven years," but "if you sell your home within seven years, you must repay all of the assistance provided." New York's DPAL shrinks by 1/120 a month over 10 years.
• Deferred loan. No monthly payment, but the full amount is due when you sell, refinance, or pay off the first mortgage. CalHFA's MyHome, Florida Assist, Michigan's MI 10K, and Washington's Home Advantage DPA work this way.
• Amortizing loan. A second monthly payment. Pennsylvania's Keystone Advantage is repaid over 10 years at 0%. A second payment can lower how much a lender will let you borrow; Florida Housing notes its amortizing FL HLP payment may count in your debt-to-income ratio.

The common mistake is treating a deferred loan like free money. If you take $10,000 deferred and sell in four years, that $10,000 comes out of your sale proceeds. If you expect to stay put for a decade, a forgivable program is your best bet. If you might move within a few years, a forgivable program with a short term, or simply a smaller loan, is a better fit than a large deferred one.

Another trade-off: some programs raise your first mortgage rate. SONYMA says rates on first mortgages with a DPAL attached are 0.40% higher than without, except for certain programs. Ask your lender to quote the loan both with and without assistance.

FHA, VA, and USDA: Loans, Not Grants

These federal programs lower the cash you need, but every one is a mortgage you repay.

FHA loans. HUD's FHA page (opens in a new tab) says "your down payment can be as low as 3.5% of the purchase price," on 1 to 4 unit properties. FHA insures the loan; you borrow from an FHA-approved lender.

VA home loans. According to VA's purchase loan page (opens in a new tab), a VA-backed loan often offers "no down payment as long as the sales price isn't higher than the home's appraised value," and no private mortgage insurance. You may need to pay the VA funding fee. You'll need a Certificate of Eligibility.

USDA Section 502 Guaranteed Loan. USDA Rural Development's guaranteed loan page (opens in a new tab) says eligible buyers can purchase "with 100% financing" in eligible rural areas, with income that "cannot exceed 115% of median household income." You apply through an approved lender.

USDA Section 502 Direct Loan. For low- and very-low-income buyers in rural areas, USDA lends directly. The direct loan page (opens in a new tab) lists a 5.750% rate effective October 1, 2026, which payment assistance can reduce to as low as 1%, and says no down payment is typically required. The catch: borrowers must repay all or part of that payment subsidy when they sell or move out. Our USDA housing grants guide covers the agency's housing programs in more depth.

Fannie Mae and Freddie Mac. These aren't government grants either, but two conventional loan products help buyers with less cash. Fannie Mae's HomeReady page (opens in a new tab) lists down payments as low as 3% and a $2,500 borrower credit for very low-income first-time buyers on eligible loans, under dates Fannie Mae lists as running from March 1, 2025, into early 2027. Freddie Mac's Home Possible page (opens in a new tab) lists a 3% down payment for borrowers with income up to 80% of area median income. Ask a lender whether you qualify.

Special HUD programs. HUD's Good Neighbor Next Door (opens in a new tab) program offers law enforcement officers, pre-K through 12th grade teachers, and firefighters and EMTs a 50% discount from the list price on certain HUD homes in revitalization areas, if they live there for 36 months. Homes are limited and listings change weekly. Families who already have a Housing Choice Voucher may be able to use it toward a mortgage through the voucher homeownership program (opens in a new tab); our rental assistance guide explains how vouchers work.

Local Programs Funded by HUD's HOME Program

Below the state level, many cities, counties, and nonprofits run their own down payment programs. A big source is HUD's HOME Investment Partnerships Program. HUD Exchange (opens in a new tab) calls HOME "the largest Federal block grant to state and local governments designed exclusively to create affordable housing for low-income households," and says jurisdictions can use it for home purchase assistance for new homebuyers. Household income must not exceed 80% of area median income. HUD also says plainly that it "does not provide HOME assistance directly to individuals," so you apply through your city, county, or state.

According to USAspending.gov FY2025 data, HUD obligated about $1.04 billion in HOME funds to the 50 states and DC, roughly $3 per resident. That money also pays for rental housing and repairs, so only part of it becomes down payment help. For example, California received $150.3 million, the most of any state, while Florida received $22.8 million for a population more than half California's.

Source: Grantsights analysis of USAspending.gov (opens in a new tab) FY2025 obligations for Assistance Listing 14.239 by recipient state; per-resident figures use Census Bureau July 1, 2025 estimates.

Read these numbers with care. They show what HUD committed during FY2025, which can differ from a state's allocation for that year, so a very low figure doesn't mean a state has no HOME program. HUD's FY2026 formula allocations page (opens in a new tab) lists what each jurisdiction is set to receive. To find a local program, ask your city or county housing or community development office, or a HUD-approved counselor. HUD's HOME FAQs (opens in a new tab) say any homebuyer who receives HOME down payment help must have housing counseling. For more on how HOME works from the government side, see our HOME program guide.

HUD-Approved Housing Counseling: Where to Start

HUD's buying a home page (opens in a new tab) tells buyers to talk to a HUD-approved housing counseling agency, and HUD lists the counseling line as (800) 569-4287. Use the HUD housing counselor finder (opens in a new tab) to search by location.

Why it matters:

1. Most DPA programs require homebuyer education. Texas, Florida, Washington, Michigan, and Illinois all list it on their program pages, and HOME-funded help requires counseling.
2. Counselors can point to the local layer. A city's down payment program may not show up in any national search, so ask a local counselor which ones are open.
3. A second opinion. A counselor's job is advice, not selling you a loan. That's useful when a lender only offers its own products.

HUD's state homebuying pages (opens in a new tab) list homebuying programs by state and are a good second check after your HFA's site.

What Down Payment Grant Ads Don't Tell You

Grantsights checked the state agency pages above against the most common claims in "first-time home buyer grant" ads. Here's what the official sources show:

1. "Grant" usually means loan. In the 15 most populous states, only Virginia's main program is a true grant. The rest are second mortgages with conditions.
2. There's no federal grant to apply for. USA.gov says websites and ads "claiming to offer 'free money from the government' are often scams."
3. Nobody should charge you to apply. The FTC's government grant scams page (opens in a new tab) says "no government agency will ever contact you to demand that you pay to get a grant." Florida Housing's Hometown Heroes page warns there's "no cost to apply" and that scammers often require an upfront fee.
4. Assistance often comes with a time limit. Sell or refinance early and you may owe it back, sometimes all of it.
5. Funds can run out. New York says DPAL PLUS 2026 funds are first-come, first-served and the program ends when funds are depleted. Texas lists its DPA as "funding permitting."
6. Closing day is a scam target. The FTC's mortgage FAQ (opens in a new tab) warns that scammers send emails impersonating your loan officer or another real estate professional and ask you to wire closing money to a different account. Call your lender at a number you already know before you wire anything.

If someone asks for a fee for a grant, report it at ReportFraud.ftc.gov (opens in a new tab).

A Step-by-Step Plan

1. Check your state HFA page in the table above for income limits, price limits, and credit minimums.
2. Call a HUD-approved housing counselor to learn about city and county programs and to take the required education course.
3. Find a lender approved by your state HFA. Ask for quotes with and without DPA so you see the rate trade-off.
4. Compare repayment terms, not just amounts. Plan for how long you'll likely stay.
5. Never pay a fee for a "grant," and verify wire instructions by phone.

Money for a house is only one piece. For help with other household costs, the free Grantsights eligibility checker asks who you are; choose "Individual" and then "Personal financial help" and it lists official routes (the USA.gov benefit finder, rental help, help with bills, food help) and the 211 line rather than grants. If you already own a home and need repairs, see our guide to home repair grants for low-income homeowners. For a broader look at what individuals can and can't get, read how to apply for grants as an individual.

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Sources

1. USA.gov: Homeownership vouchers for first-time homebuyers (opens in a new tab) - no federal grants or free money to buy a home; scam warning
2. HUD: New Jersey state page (opens in a new tab) - HUD has no direct grant programs to homebuyers
3. HUD: Let FHA loans help you (opens in a new tab) - 3.5% minimum down payment
4. HUD: Buying a home (opens in a new tab) and HUD state pages (opens in a new tab) - homebuying steps and state programs
5. HUD housing counselor finder (opens in a new tab) - HUD-approved counseling agencies
6. HUD Exchange: HOME overview (opens in a new tab) and HUD HOME FAQs (opens in a new tab) - HOME rules and counseling requirement
7. HUD: Good Neighbor Next Door (opens in a new tab) - 50% discount program
8. VA: Purchase loan (opens in a new tab) - no down payment terms and funding fee
9. USDA Rural Development: Section 502 Guaranteed (opens in a new tab) and Section 502 Direct (opens in a new tab) - rural home loans
10. Fannie Mae HomeReady (opens in a new tab) and Freddie Mac Home Possible (opens in a new tab) - 3% down conventional loans
11. State housing finance agency pages linked in the state table, checked October 28, 2026, plus the TDHCA My First Texas Home matrix (opens in a new tab), Florida Hometown Heroes (opens in a new tab), and NC 1st Home Advantage (opens in a new tab)
12. FTC: Government grant scams (opens in a new tab) and FTC: Shopping for a mortgage FAQs (opens in a new tab) - scam warnings
13. USAspending.gov award search (opens in a new tab) - FY2025 HOME obligations (Assistance Listing 14.239)
14. Census Bureau Vintage 2025 state population estimates (opens in a new tab) - July 1, 2025 population used for per-resident figures