First-Time Homebuyer Programs by State: Down Payment Assistance and Grants (2025/2026)

Here's something most first-time buyers don't know: your state probably has money set aside specifically for you — and it's going unused right now.

Studies consistently show that roughly 87% of first-time buyers qualify for some form of down payment assistance or homebuyer program. But most never apply. Not because they're ineligible. Because they didn't know to look.

The homebuying process is already overwhelming. Figuring out what programs exist, whether you qualify, and how to actually access them feels like another full-time job on top of an already stressful journey. We get it.

This post cuts through that. Below you'll find a breakdown of how state homebuyer programs work, the national programs worth knowing first, and a state-by-state overview of what's available where you live. If you're just getting started, grab the HomeReady Blueprint at /start — it walks you through the full process from savings to closing day.

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How State Homebuyer Programs Work

Every state has a Housing Finance Agency (HFA) — a quasi-governmental body whose entire job is to make homeownership more accessible. These agencies administer the programs, set the rules, and partner with approved lenders to get money into buyers' hands.

Types of Assistance

Down Payment Assistance (DPA) Grants — Free money that doesn't need to be repaid. True grants are the best-case scenario and do exist, though they're less common than loan-based programs. Forgivable Second Mortgages — You receive a second loan to cover the down payment, but if you stay in the home for a set number of years (typically 5–10), the balance is forgiven. Leave early and you repay a pro-rated amount. Deferred Second Mortgages — No payments due until you sell, refinance, or pay off your first mortgage. At that point, you repay the full balance — no interest or forgiveness involved. Below-Market-Rate First Mortgages — Some HFAs offer 30-year fixed-rate loans at rates below what banks advertise. Even a fraction of a percent lower can save you tens of thousands over the life of the loan. Mortgage Credit Certificates (MCCs) — A federal tax credit (not a deduction) that reduces your tax bill dollar-for-dollar by a percentage of your annual mortgage interest — typically 20–25%. This is stackable with other programs.

Who Qualifies

Most programs share similar eligibility requirements:

• Income limits: Typically 80–120% of the Area Median Income (AMI) for your county. In high-cost areas, limits are higher.
• Purchase price caps: Usually set per county, often $350,000–$600,000+ depending on location.
• First-time buyer definition: Someone who has not owned a primary residence in the past 3 years. (You may still qualify even if you owned a home before — as long as it's been at least 3 years.)
• Credit score: Most programs require at least a 620–640 FICO score.

Programs can also stack. A common combo: FHA loan + state DPA grant. The FHA handles your mortgage, the state covers most or all of the 3.5% down payment, and you walk into your home with minimal cash out of pocket.

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National Programs Worth Knowing First

Before diving into state-specific options, make sure you know what's available federally — these form the foundation most state programs build on.

FHA Loans — Backed by the Federal Housing Administration, FHA loans require as little as 3.5% down with a 580+ credit score. They're the most common loan type used with state DPA programs. Read our full breakdown of FHA loan requirements before you apply. Fannie Mae HomeReady — A conventional loan program requiring just 3% down, with income limits applied. Allows non-borrower household income to count toward qualification. Great for buyers living with family. Freddie Mac Home Possible — Similar to HomeReady, also 3% down with income limits. Flexible on down payment sources (gifts and grants allowed). USDA Loans — If you're buying in a rural or suburban area, USDA loans offer 0% down with competitive rates. The property must be in a USDA-eligible zone — check their map before assuming you don't qualify. HUD-Approved Housing Counseling — Free or low-cost counseling through HUD-certified agencies. They'll walk you through your options, help you compare programs, and are required by many state assistance programs anyway. Find one at hud.gov.

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First-Time Homebuyer Programs by State

Programs change — funding runs out, rates adjust, new initiatives launch. Always verify current details directly with your state's HFA. This overview is accurate as of mid-2026.

Northeast

Connecticut — Connecticut Housing Finance Authority (CHFA) offers the CHFA Home of Your Own Program and down payment assistance loans up to $20,000 at below-market rates. Programs serve both first-time buyers and those who haven't owned in 3+ years. Maine — Maine State Housing Authority (MaineHousing) runs the First Home Loan program offering low fixed rates plus up to $5,000 in Advantage down payment and closing cost assistance. Funds are limited and first-come, first-served. Massachusetts — MassHousing offers low fixed-rate loans plus the MassHousing Down Payment Assistance program — up to $30,000 in deferred assistance in many communities. MI Plus adds mortgage payment protection if you lose your job. New Hampshire — New Hampshire Housing runs the Home Start Homebuyer Tax Credit (MCC) and the Home Flex Plus program with down payment and closing cost assistance. Income limits apply by household size. New Jersey — New Jersey Housing and Mortgage Finance Agency (NJHMFA) offers the First-Time Homebuyer Mortgage Program with below-market rates and the NJHMFA Down Payment Assistance program — $15,000 forgivable over 5 years. New York — State of New York Mortgage Agency (SONYMA) administers the Low Interest Rate Program and the Achieving the Dream Program (for lower-income buyers). Down payment assistance up to 3% of the purchase price is available as a 0% deferred second mortgage. Pennsylvania — Pennsylvania Housing Finance Agency (PHFA) offers the Keystone Home Loan and Keystone Advantage Assistance Loan Program — up to 4% of purchase price or $6,000 (whichever is less) in closing cost and down payment help. Rhode Island — Rhode Island Housing (RIHousing) offers FirstHomes100, a 100% financing program for income-qualifying buyers. Extra Assistance provides up to $17,500 for down payment and closing costs. Vermont — Vermont Housing Finance Agency (VHFA) offers the MOVE and ASSIST programs, with down payment assistance up to $7,500 in affordable second mortgages. Programs prioritize low-to-moderate income buyers.

Southeast

Alabama — Alabama Housing Finance Authority (AHFA) offers Step Up, a down payment assistance program providing 3% of the purchase price as a 10-year second mortgage at a low fixed rate. Arkansas — Arkansas Development Finance Authority (ADFA) runs the Move-Up program with 30-year fixed-rate loans and the Down Payment Assistance Program (DPA) — up to $15,000 at 0% interest, forgiven after 10 years. Delaware — Delaware State Housing Authority (DSHA) offers the SMAL (Second Mortgage Assistance Loan) program and the Delaware First-Time Homebuyer Tax Credit (MCC). The SMAL provides up to $15,000 in deferred assistance. Florida — Florida Housing Finance Corporation offers the Florida Assist program — $10,000 at 0% interest, deferred until you sell or refinance. Also offers the Homebuyer Loan Program with below-market first mortgages statewide. Georgia — Georgia Department of Community Affairs administers the Georgia Dream Homeownership Program. Standard assistance is $10,000 toward down payment and closing costs; buyers in targeted areas or working in eligible professions can receive $12,500. Kentucky — Kentucky Housing Corporation (KHC) offers the Regular Down Payment Assistance Program — up to $10,000 at 3.75% interest with a 10-year term. Combines with KHC's below-market first mortgages. Louisiana — Louisiana Housing Corporation (LHC) runs the Market Rate GNMA Program and the Soft Second program, which provides a forgivable second mortgage covering most or all of the down payment for income-qualifying buyers. Maryland — Maryland Department of Housing and Community Development (DHCD) offers the Maryland Mortgage Program with competitive rates and the Maryland SmartBuy 3.0 program — which pairs DPA with student loan payoff assistance, a rare and valuable combo. Mississippi — Mississippi Home Corporation (MHC) offers the Smart6 program — a 6% DPA grant (true grant, not repaid) combined with a 30-year fixed mortgage. One of the more straightforward programs in the region. North Carolina — North Carolina Housing Finance Agency (NCHFA) offers the NC Home Advantage Mortgage with up to 3% down payment assistance as a 0% deferred second mortgage forgiven at 20% per year starting in year 11. South Carolina — SC Housing offers the SC Housing Home Buyer Program with below-market rates and the SC Housing Forgivable Down Payment Assistance — up to $7,000 forgiven over 7 years. Tennessee — Tennessee Housing Development Agency (THDA) runs Great Choice Home Loans paired with Great Choice Plus — $6,000 in down payment assistance as a second mortgage at 0% interest. Virginia — Virginia Housing (formerly VHDA) offers the Granting Freedom program for disabled veterans and the Down Payment Assistance Grant — up to 2–2.5% of the purchase price as a true grant (no repayment required). West Virginia — West Virginia Housing Development Fund (WVHDF) offers the Homeownership Program with below-market rates and the HERO (Homeownership and Economic Recovery Opportunity) program targeting lower-income buyers. Washington D.C. — DC Housing Finance Agency (DCHFA) and DC Open Doors offer down payment assistance up to 3–3.5% of the loan amount as a deferred loan. The Home Purchase Assistance Program (HPAP) provides up to $80,000 for income-eligible DC residents — one of the highest DPA amounts in the country.

Midwest

Illinois — Illinois Housing Development Authority (IHDA) offers multiple programs. The IHDA Access Forgivable provides $6,000 in down payment and closing cost assistance forgiven after 10 years. IHDA Access Deferred gives $7,500 deferred until sale. Indiana — Indiana Housing and Community Development Authority (IHCDA) offers the Next Home program — 3.5% of the purchase price as a forgivable second mortgage for income-qualifying first-time buyers. Iowa — Iowa Finance Authority (IFA) offers the FirstHome and Homes for Iowans programs. FirstHome provides a below-market rate mortgage plus the Iowa DPA Grant — up to $2,500 that never needs to be repaid. Kansas — Kansas Housing Resources Corporation (KHRC) administers First Time Homebuyer with KHRC — offering down payment assistance as a forgivable 0% loan. Amounts vary by income and county. Michigan — Michigan State Housing Development Authority (MSHDA) offers the MI Home Loan with the MI DPA Loan — up to $10,000 for most buyers, $7,500 in specific zip codes. The loan is deferred until the home is sold. Minnesota — Minnesota Housing (MHFA) offers the Start Up loan program for first-time buyers with below-market rates, plus the Monthly Payment Loan — a second mortgage of up to $17,000 for down payment and closing costs. Missouri — Missouri Housing Development Commission (MHDC) offers the First Place Loan with cash assistance of 4% of the loan amount. For qualified buyers, the assistance is forgivable after 10 years. Nebraska — Nebraska Investment Finance Authority (NIFA) runs the Homebuyer Assistance Program — offering down payment and closing cost help up to 5% of the purchase price as a 10-year second mortgage at 1% interest. North Dakota — North Dakota Housing Finance Agency (NDHFA) offers the Start Program for first-time buyers with below-market rates plus the DCA (Down Payment and Closing Cost Assistance) — up to 3% of the purchase price. Ohio — Ohio Housing Finance Agency (OHFA) offers the Your Choice! Down Payment Assistance program — either 2.5% or 5% of the purchase price, with the option to have it forgiven after 7 years if you stay in the home. South Dakota — South Dakota Housing Development Authority (SDHDA) offers the Governor's House Program and the Fixed Rate Plus loan with down payment assistance. Income and purchase price limits apply. Wisconsin — Wisconsin Housing and Economic Development Authority (WHEDA) offers the Easy Close Advantage — a down payment and closing cost assistance second mortgage of up to 6% of the purchase price at a 0% interest rate.

Southwest

Arizona — Arizona Department of Housing partners with lenders to offer the Home Plus program — up to 5% of the loan amount as a true grant (not a loan, not forgivable — just free). No repayment under any circumstances. One of the most buyer-friendly grant programs in the country. Colorado — Colorado Housing and Finance Authority (CHFA) offers the SmartStep Plus program — a 30-year fixed mortgage at below-market rates with an optional down payment assistance second mortgage. The FirstStep program targets buyers at lower income levels. Nevada — Nevada Rural Housing Authority and the Nevada Housing Division together offer the Home Is Possible program — down payment assistance of 4% of the loan amount as a grant for buyers who meet income limits. New Mexico — New Mexico Mortgage Finance Authority (MFA) offers the FirstHome and NextHome programs with below-market rates and the HOMENow DPA — up to $8,000 for income-qualifying buyers. True grant for those below 80% AMI. Oklahoma — Oklahoma Housing Finance Agency (OHFA) offers the OHFA Gold and Dream programs with below-market first mortgages plus DPA of up to 3.5% of the purchase price. Texas — Texas Department of Housing and Community Affairs (TDHCA) administers My First Texas Home — a 30-year fixed-rate mortgage at below-market rates combined with up to 5% of the loan amount in down payment and closing cost assistance. Funds are competitive and often exhausted mid-year. Utah — Utah Housing Corporation (UHC) offers the FirstHome Loan with a down payment assistance second mortgage. The Score Loan is available for buyers with lower credit scores — unusual flexibility for a state program.

West

Alaska — Alaska Housing Finance Corporation (AHFC) offers the First Home Limited program with below-market rates for income-qualifying buyers. Veterans and rural residents have access to expanded programs. California — California Housing Finance Agency (CalHFA) offers the MyHome Assistance Program — a deferred second mortgage of up to 3.5% of the purchase price for FHA loans (3% for conventional). CalHFA regularly updates program limits to reflect California's high home prices. Hawaii — Hawaii Housing Finance and Development Corporation (HHFDC) and the Office of Hawaiian Affairs offer programs for specific buyer populations. The Hula Mae program offers below-market rates; funding is limited and waitlists are common. Idaho — Idaho Housing and Finance Association (IHFA) offers the First Loan and Preferred Loan programs with below-market rates plus up to 7% down payment and closing cost assistance as a second mortgage. Montana — Montana Board of Housing (MBOH) offers the Montana Homeownership Network and the MBOH Equity Loan — a second mortgage for down payment assistance at low rates. Programs vary significantly by county. Oregon — Oregon Housing and Community Services (OHCS) offers the Oregon Bond Residential Loan with below-market rates and the Cash Advantage option — a 3% cash grant toward down payment and closing costs. RateAdvantage gives a lower rate instead. Washington — Washington State Housing Finance Commission (WSHFC) offers the Home Advantage program with below-market rates plus the Home Advantage Second Mortgage DPA — 3–5% of the purchase price in deferred assistance. The House Key program targets lower-income buyers. Wyoming — Wyoming Community Development Authority (WCDA) offers the HFA Preferred and HFA Advantage loan programs plus the Down Payment Assistance program — up to 3% of the purchase price as a second mortgage at 3.99% interest.

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How to Apply

The process is more straightforward than most buyers expect.

Step 1: Find your state's HFA. Search "[your state] housing finance agency" or go to hud.gov/states for the official directory. This is your starting point for every program in your state. Step 2: Check income and purchase price limits for your county. These vary widely — limits in a rural county may be half of what's allowed in a high-cost metro. Always check at the county level. Step 3: Confirm your lender is HFA-approved. Not every bank or mortgage broker participates in state programs. You'll need to work with a lender on your HFA's approved list — it's usually searchable on the HFA website. Step 4: Get pre-approved through an HFA-approved lender. This works the same as any pre-approval: income docs, tax returns, bank statements, credit pull. Your lender will match you to the programs you qualify for. Step 5: Complete a homebuyer education course. Most programs require it. The course typically runs 6–8 hours online and costs $0–$99. HUD-approved courses through organizations like eHome America or Framework are widely accepted. Step 6: Submit your application. Your lender handles most of the paperwork. Programs often have funding cycles or annual caps — many run out of money mid-year. The earlier in the year you apply, the better your odds of available funds.

One thing worth knowing: some programs operate on a reservation system. Once funding is reserved for your file, it's held through your closing. But if you're shopping in spring or summer, don't assume funds will still be there in six months.

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What to Know Before You Apply

A few things that catch buyers off guard:

Forgivable ≠ free immediately. Forgivable loans require you to stay in the home for a set period — usually 5–10 years. Leave before then and you repay a prorated amount. If you're planning to move in 3 years, run the math before counting on forgiveness. Income limits include your whole household. It's not just the borrower's income — it's everyone who lives in the home and has income. A spouse who works, even part-time, counts toward the household total. Primary residence only. These programs are designed for people who will live in the home. Investment properties and vacation homes don't qualify, and your lender will document your intent. Credit score minimums are real. Most programs require 620–640 minimum. A few go lower (Utah's Score Loan, some rural programs), but if your score is below 620, start there — a few months of targeted credit repair can unlock significantly better options. HFA rates aren't always the lowest. State programs sometimes carry a slightly higher interest rate than you'd get on the open market. The DPA often more than compensates over time, but run both scenarios with your lender before deciding. Budget for the education course. You'll need to complete it before closing. Block off a weekend — most courses are fully online and self-paced.

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The Money Is There — Most Buyers Just Don't Look

State programs collectively distribute billions in homebuyer assistance every year. A significant portion of it goes unclaimed — not because buyers don't qualify, but because they didn't know to ask.

Your state has a program. Your county might have one too. Your lender can layer them. And if you're already feeling buried in spreadsheets and deadlines, start here with our free first-time buyer checklist — it's built to simplify exactly this kind of research.

When you're ready to go deeper into the full offer and loan process, the Smart Buyer Toolkit covers everything from reading a loan estimate to making a competitive offer — all in plain English.

The money is on the table. Go get it.