The biggest barrier to buying your first home isn't the monthly mortgage payment. It's the down payment. Most first-time buyers need a significant amount of cash upfront, and that doesn't include closing costs which add even more to the total. But there are grant programs and down payment assistance programs that can cover part or all of those upfront costs, and most first-time buyers never apply for them.
Nearly every state in the country operates at least one down payment assistance program for first-time buyers. National programs like the National Homebuyers Fund and the Chenoa Fund offer grants up to 5% of the purchase price. Federal Home Loan Bank programs provide grants up to $30,000 (and up to $60,000 when stacked). And major lenders like Bank of America offer their own grant programs with no repayment required. The money is real, and the programs are active in 2026.
This guide covers the biggest and most accessible first-time home buyer grant and down payment assistance programs available nationwide in 2026, how they work, who qualifies, and how to apply.
💡 Key Takeaways
- Nearly every state offers down payment assistance programs for first-time buyers, many providing 3-5% of the purchase price as grants or forgivable loans
- National programs like the National Homebuyers Fund and Chenoa Fund offer grants up to 5% of the loan amount that work alongside FHA and conventional mortgages
- Federal Home Loan Bank programs offer grants up to $30,000-$60,000 for down payment and closing costs through participating lenders
- You don't need 20% down. FHA loans require 3.5%, conventional programs as low as 3%, and VA/USDA loans require 0% down
- Multiple programs can often be stacked together, combining a state DPA with a national grant and a low-down-payment mortgage for maximum assistance
Who Counts as a "First-Time" Home Buyer?
The definition is broader than you'd think. For most programs, a "first-time home buyer" is anyone who hasn't owned a principal residence in the past three years. That means if you owned a home five years ago but have been renting since, you qualify again. Some programs also extend eligibility to single parents who only owned a home jointly with a former spouse, displaced homemakers, and people who owned a home that wasn't permanently affixed to a foundation (like a mobile home on rented land).
Most programs also require you to complete a homebuyer education course (typically online, 4-8 hours, often free or under $100), meet income limits that vary by location, and purchase a home below a certain price cap. Some programs are available to all income-qualifying buyers, while others target specific groups like teachers, healthcare workers, veterans, or buyers in certain neighborhoods.
⚠️ Important: Grants vs. Forgivable Loans
Some programs give you a true grant that never needs to be repaid. Others provide "forgivable loans" structured as silent second mortgages with 0% interest and no monthly payments. These forgivable loans are erased after you live in the home for a set period (typically 5-10 years). If you sell, move out, or refinance before that period ends, you may have to repay some or all of the assistance. Both are valuable, but understand which type you're receiving before you commit.
Compare the Top First-Time Buyer Programs for 2026
The five programs below represent the largest and most accessible grant and down payment assistance options available to first-time home buyers nationwide in 2026.
State Housing Agency DPA Programs
State Housing Finance Agencies (HFAs) | Grants & Forgivable Loans | All 50 States
Every state operates a Housing Finance Agency (HFA) that runs down payment assistance programs for first-time home buyers. These are the most widely available and typically the most generous programs you'll find. Depending on your state, you may receive a true grant, a forgivable second mortgage, a zero-interest deferred loan, or a low-interest repayable loan. Amounts typically range from $5,000 to $25,000, though some states (like Massachusetts through MassHousing) offer up to $50,000 in certain communities. State HFA programs are usually paired with a competitive first mortgage at below-market interest rates. Most require homebuyer education, income at or below 80-120% of AMI, and purchase of a home below a set price cap.
Best For: All First-Time Buyers, Largest Assistance Amounts, Every State
Pros
+ Available in every state with the largest assistance amounts
+ Many offer true grants or forgivable loans (no repayment)
+ Often paired with below-market mortgage rates
+ Can be stacked with national programs and lender grants
+ Income limits are higher than you'd expect (up to 120% AMI in some states)
Cons
- Programs vary widely by state: some are far more generous than others
- Funding can run out mid-year (first-come, first-served)
- Must use an approved lender (can't use any bank you want)
- Homebuyer education course required (4-8 hours)
Our Verdict: Your state HFA program should be the very first place you look. These are the most established, best-funded, and most generous first-time buyer programs in the country. Search "[your state] housing finance agency first-time buyer" to find your state's program, or visit the National Council of State Housing Agencies at ncsha.org for a complete directory.
National Homebuyers Fund (NHF)
NHF, Inc. (Nonprofit) | Up to 5% of Loan Amount | Available Nationwide
The National Homebuyers Fund is a nonprofit that provides down payment and closing cost assistance to home buyers nationwide. NHF offers up to 5% of the mortgage loan amount as either a grant (no repayment) or a three-year forgivable second mortgage. The program works with FHA, VA, USDA, and conventional mortgages, giving buyers flexibility in their loan choice. One of NHF's biggest advantages is its higher income limits compared to many state programs, making it accessible to moderate-income buyers who earn too much for some state DPA programs but still struggle to save for a down payment. NHF partners with approved lenders across the country, and the grant can be used for both down payment and closing costs.
Best For: Nationwide Availability, Higher Income Limits, Flexible Loan Types
Pros
+ Up to 5% of the loan amount is among the highest grant percentages available
+ Works with all major loan types (FHA, VA, USDA, conventional)
+ Available nationwide, not limited to specific states
+ Higher income limits than many state programs
+ Grant option means zero repayment
Cons
- Must use an NHF-approved lender
- Mortgage rate may be slightly higher than non-DPA loans
- Forgivable loan must be repaid if you sell within 3 years
- Not all lenders participate in every state
Our Verdict: NHF is the strongest nationwide grant option for first-time buyers who earn too much for their state program or need a program that works with VA or USDA loans. The 5% grant is generous, and the flexibility to choose between a true grant and a forgivable loan gives buyers options. Call (866) 643-4968 or visit their website to get matched with an approved lender.
Chenoa Fund
CBC Mortgage Agency | 3.5%-5% of Purchase Price | Available Nationwide
The Chenoa Fund, administered by the CBC Mortgage Agency, is one of the most popular nationwide down payment assistance programs. It provides 3.5% or 5% of the home's purchase price as a zero-interest second mortgage that's forgiven after 36 consecutive on-time payments on your first mortgage. That means if you make your mortgage payments on time for three years, the entire second mortgage disappears. The program is designed to work alongside FHA and conventional loans, and it specifically targets buyers who have the income to support a mortgage payment but haven't been able to save for a down payment. The minimum credit score is 600, and income must be at or below 115% of AMI.
Best For: Buyers Who Can Afford Payments But Lack Savings, Low Credit Score OK
Pros
+ Can fully cover your FHA down payment (3.5%) or conventional (5%)
+ Zero interest and no monthly payments on the second mortgage
+ Completely forgiven after just 36 on-time payments
+ Lower credit score requirement (600) than many programs
+ Available nationwide through participating lenders
Cons
- Late payment resets the 36-month forgiveness clock
- Mortgage rate may be slightly higher than non-DPA loans
- Must use a Chenoa Fund-approved lender
- Second mortgage remains until forgiven (shows on your credit)
Our Verdict: The Chenoa Fund is ideal for buyers who have steady income and can make on-time payments but haven't been able to accumulate savings for a down payment. The 36-month forgiveness timeline is one of the shortest available, and the 600 credit score minimum makes it accessible to buyers who might be shut out of other programs. Just make sure you can commit to 36 consecutive on-time payments since a single late payment resets the clock.
Federal Home Loan Bank (FHLB) Programs
11 Regional FHLBs | Grants up to $30,000-$60,000 | Through Participating Lenders
The Federal Home Loan Bank system consists of 11 regional banks that each operate homebuyer assistance programs through their member financial institutions (banks, credit unions, and mortgage companies). These programs offer some of the largest grant amounts available, with some FHLB districts providing up to $30,000 per household. The FHLB of New York's Homebuyer Dream Program, for example, offers grants up to $30,000 and can be layered with their Wealth Builder program for a combined total of up to $60,000. Grants cover down payment, closing costs, and homebuyer counseling. Income limits are typically at or below 80% of AMI, and the programs are administered through participating member lenders. The FHLB of New York alone allocated $31.67 million for its 2026 program year.
Best For: Largest Grant Amounts, Stackable Programs, High-Cost Markets
Pros
+ Largest grant amounts available (up to $60,000 when stacked)
+ True grants that never need to be repaid
+ Multiple FHLB programs can be layered together
+ Significant annual funding allocations
+ Particularly valuable in high-cost housing markets
Cons
- Must use a participating member lender (not all lenders participate)
- Program rules and amounts vary by FHLB district
- Funding runs in annual rounds and can be exhausted quickly
- Some programs limited to specific districts (e.g., NY/NJ only)
Our Verdict: FHLB homebuyer programs offer the largest grant amounts available anywhere, making them especially valuable in expensive housing markets where $5,000 or $10,000 barely makes a dent. The catch is that you must use a participating lender and apply during the funding window. Ask your lender if they participate in FHLB programs, or search for participating members on your regional FHLB's website.
Bank of America Down Payment & Closing Cost Grants
Bank of America | Up to $7,500 Closing Costs + Down Payment Grant | Select Markets
Bank of America's Community Homeownership Commitment offers two types of grants for qualifying buyers. The America's Home Grant provides up to $7,500 toward closing costs, and their Down Payment Grant provides a percentage-based grant toward your down payment in select markets. Both are true grants that never need to be repaid and are not structured as second mortgages. Bank of America also offers its Affordable Loan Solution mortgage, a conventional loan with as little as 3% down, no mortgage insurance, and no minimum borrower contribution (meaning the grant can cover your entire down payment). These programs are available to moderate-income buyers purchasing in designated areas and are administered directly through Bank of America, making them easy to access without needing to find a specialized program or lender.
Best For: Simple Application, True Grant (No Repayment), No Mortgage Insurance
Pros
+ True grants with zero repayment and no second mortgage
+ No mortgage insurance on the Affordable Loan Solution
+ Simple: apply directly through Bank of America
+ No minimum borrower contribution (grant can cover full down payment)
+ Can be combined with other Bank of America mortgage products
Cons
- Limited to designated markets and eligible census tracts
- Must use Bank of America as your lender
- Grant amounts smaller than FHLB or some state programs
- Mortgage rates may not be the most competitive
Our Verdict: Bank of America's grants are the easiest to access because you don't need to find a specialized DPA lender or navigate a government program. Just apply directly through BofA. The combination of a true grant (no repayment), 3% down with no mortgage insurance, and no minimum out-of-pocket requirement makes this one of the most buyer-friendly programs available. Check their website to see if the home you're interested in is in a qualifying area.
Quick Comparison: All First-Time Buyer Programs
| Program | Amount | Type | Income Limit | Where |
|---|---|---|---|---|
| State HFA DPA | $5K-$50K | Grant / forgivable loan | 80-120% AMI | All 50 states |
| NHF Grant | Up to 5% of loan | Grant or forgivable | Higher limits | Nationwide |
| Chenoa Fund | 3.5%-5% of price | Forgivable (36 mo.) | 115% AMI | Nationwide |
| FHLB Programs | Up to $60K | True grant | 80% AMI | By FHLB district |
| Bank of America | Up to $7,500+ | True grant | Moderate income | Select markets |
💡 Pro Tip: Stack Programs for Maximum Assistance
Many first-time buyer programs can be combined. For example, you could use a state HFA down payment grant, a Chenoa Fund forgivable loan to cover any remaining down payment, an FHLB grant for closing costs, and an FHA loan with 3.5% down. In some states, buyers have stacked programs to receive $50,000-$100,000 in total assistance. Your lender should be able to identify which programs can be layered together in your market. Always ask: "What DPA programs do you work with, and which ones can be combined?"
Frequently Asked Questions
Do first-time home buyer grants have to be paid back?
True grants do not need to be repaid. However, many programs offer "forgivable loans" that function like grants as long as you meet certain conditions, usually living in the home for 3-10 years. If you sell, move out, or refinance before the forgiveness period ends, you may owe some or all of the money back. Always clarify whether you're receiving a true grant or a forgivable loan, and understand the conditions attached.
How much money can you get as a first-time home buyer?
It depends on which programs you qualify for and where you're buying. Individual programs range from $5,000 to $60,000. By stacking multiple programs (state DPA + national grant + FHLB grant), some buyers receive $50,000-$100,000 in total assistance. The average first-time buyer receives $10,000-$20,000 from a single DPA program. Your lender can help identify the maximum assistance available in your specific market.
What credit score do you need for first-time buyer programs?
Requirements vary by program. The Chenoa Fund accepts scores as low as 600. FHA loans require a minimum of 580 for 3.5% down (or 500 for 10% down). Most state DPA programs require 620-660. Conventional loans with HomeReady or Home Possible typically need 620+. If your score is below 600, focus on improving it before applying since even a small increase can unlock significantly more program options and better mortgage rates.
Do you really need 20% down to buy a house?
No. This is one of the most common misconceptions in home buying. FHA loans require just 3.5% down. Conventional programs like HomeReady and Home Possible require 3%. VA and USDA loans require 0% down. With down payment assistance grants, you may not need any of your own money at all. The 20% threshold only applies if you want to avoid private mortgage insurance (PMI) on a conventional loan, and even PMI is often a manageable cost that allows you to buy years sooner.
Can I use a grant for closing costs, not just the down payment?
Yes. Most first-time buyer grants and DPA programs can be used for both down payment and closing costs. Some programs, like Bank of America's America's Home Grant, are specifically designed for closing costs. Closing costs typically run 2-5% of the purchase price (roughly $6,000-$15,000 on a $300,000 home), so grants that cover these costs can make a significant difference in how much cash you need at closing.
What is the homebuyer education requirement?
Most DPA programs require you to complete a HUD-approved homebuyer education course before receiving assistance. These courses cover the home buying process, budgeting, mortgage terms, and homeowner responsibilities. Most can be completed online in 4-8 hours. Some are free, and others cost under $100. Popular providers include eHome America, Framework, and local HUD-approved housing counseling agencies. Completing the course is a one-time requirement and is well worth the time for the financial assistance you receive.
The Bottom Line
If you think you can't afford to buy a home because you don't have enough saved for a down payment, you may not have explored all your options. Nearly every state offers down payment assistance for first-time buyers. National programs like the National Homebuyers Fund and Chenoa Fund provide grants up to 5% of the purchase price. FHLB programs offer up to $60,000 in grant funding. And you don't need 20% down: FHA requires just 3.5%, and VA and USDA loans require nothing down at all.
Your best first step: talk to a lender who specializes in first-time buyer programs. Ask them specifically which DPA programs they work with and which ones can be stacked together. Then check your state's housing finance agency website for additional options. Complete a homebuyer education course (many are free online), gather your income documentation, and apply to every program you qualify for. The money is there. Most first-time buyers just don't know about it.
Disclaimer: This content is for general informational purposes only and does not constitute financial, legal, or mortgage advice. Grant and down payment assistance programs, eligibility requirements, income limits, and funding levels are subject to change and vary by state, county, and lender. Always verify current program details with the administering agency or an approved lender. Mortgage rates, terms, and availability depend on your individual financial situation. Consult a HUD-approved housing counselor or licensed mortgage professional before making any home purchase decisions. This page may contain affiliate links.
