First-Time Home Buyer Programs: Loans, Grants, and Assistance Options

First-Time Home Buyer Programs: Where to Start

First-time home buyer programs can help reduce the cash needed to buy a home, lower monthly payments, or make qualifying easier. These programs may include low-down-payment mortgages, down payment assistance, closing cost help, forgivable loans, tax credits, and state or local grant programs.

The best option usually depends on your income, credit score, location, military status, debt, home price, and how long you plan to live in the home. Many buyers combine a national loan program with state or local assistance.

Common Types of First-Time Buyer Help

• Low-down-payment mortgages that allow eligible buyers to purchase with 0% to 3.5% down.
• Down payment assistance that may help cover part of the upfront cash needed.
• Closing cost assistance to reduce lender, title, escrow, or prepaid costs.
• Forgivable loans that may be reduced or forgiven if you meet program rules.
• Mortgage credit certificates or tax credits offered in some areas.
• Local city or county programs targeted to specific income levels or neighborhoods.

FHA Loans

FHA loans are popular with first-time buyers because they allow a lower down payment and more flexible credit requirements than many conventional loans.

• Minimum down payment can be as low as 3.5% for qualified buyers.
• Credit requirements may be more flexible than some conventional options.
• Mortgage insurance is typically required.
• Loan limits and property standards apply.

USDA Loans

USDA loans can be helpful for eligible buyers purchasing in qualifying rural and some suburban areas. They are not limited only to farmland or very remote locations.

• 0% down payment may be available for eligible buyers.
• Income limits and property location rules apply.
• Can be useful in smaller towns and some suburban markets.
• Guarantee fees and program rules should be reviewed with a lender.

VA Loans

VA loans can be one of the strongest options for eligible veterans, active-duty service members, and certain surviving spouses.

• 0% down payment may be available.
• No monthly private mortgage insurance.
• Often competitive interest rates.
• VA funding fee and eligibility rules may apply.

Conventional 3% Down Programs

Some buyers may qualify for conventional low-down-payment programs through Fannie Mae or Freddie Mac. These can be a good fit for buyers with stronger credit who want a lower down payment but may not need FHA flexibility.

• Down payments may be as low as 3% for eligible buyers.
• Private mortgage insurance may be required with less than 20% down.
• Credit, income, occupancy, and loan limit rules apply.
• Some programs include homebuyer education requirements.

Down Payment and Closing Cost Assistance

Down payment assistance can come from state housing agencies, cities, counties, nonprofits, employers, or special local programs. Assistance may be structured as a grant, second mortgage, deferred loan, forgivable loan, or matched savings program.

Before relying on assistance, ask:

• Is the assistance a grant, loan, forgivable loan, or deferred payment?
• Are there income limits, purchase price limits, or location limits?
• Do you need to live in the home for a certain number of years?
• Can the program be combined with FHA, VA, USDA, or conventional financing?
• How does the assistance affect your monthly payment and long-term cost?

How to Choose the Right Program

The lowest down payment is not always the best overall choice. A program that lowers your upfront cash may still come with mortgage insurance, fees, resale restrictions, repayment rules, or a higher monthly payment.

A smart comparison includes:

• Total cash needed at closing.
• Monthly payment, including taxes, insurance, HOA, and mortgage insurance.
• Interest rate and loan fees.
• Program restrictions or repayment terms.
• Whether the program works in your target city or county.

You can also use our home affordability calculator to estimate monthly payment comfort and our real estate commission calculator to understand how commission differences can affect buyer and seller costs.

Why Agent Choice Still Matters for First-Time Buyers

Financing is only one part of buying your first home. The agent you choose can affect how well you understand the process, how clearly costs are explained, and how confidently you negotiate.

Seeking Agents® helps buyers compare agents before committing. You can review experience, communication style, services, and potential commission-related savings in one place.

Find First-Time Home Buyer Programs by State

Every state offers its own mix of grants, forgivable loans, deferred loans, mortgage credit certificates, and local city or county incentives. Use the links below to explore programs where you plan to buy.