Saving enough for a down payment is often the biggest obstacle to buying your first home. The good news is that first-time homebuyer programs can cover part of your down payment and closing costs, sometimes with no interest and no monthly payments. In this guide, you’ll find the main federal loan options, the best state programs in seven of the largest states, and how to find the program that fits you.
What Counts as a First-Time Homebuyer?
You may qualify even if you’ve owned a home before. Most programs define a first-time homebuyer as someone who hasn’t owned and lived in a primary residence in the past three years. Many programs also make exceptions for veterans and for buyers purchasing in certain targeted areas.
Federal Loan Options for First-Time Buyers
Before looking at state programs, it helps to know the national loan options. State assistance is usually paired with one of these:
| Loan type | Minimum down payment | Best for |
|---|---|---|
| FHA loan | 3.5% (with a 580+ credit score) | Buyers with lower credit scores |
| VA loan | 0% | Eligible veterans, service members and some surviving spouses |
| USDA loan | 0% | Buyers in eligible rural and suburban areas with moderate incomes |
| Fannie Mae HomeReady | 3% | Low- to moderate-income buyers |
| Freddie Mac Home Possible | 3% | Low- to moderate-income buyers |
Best First-Time Homebuyer Programs by State
Every state has a housing finance agency that runs its own programs. Here are the main options in seven of the largest states. Amounts and rules change often, so always confirm the current details with the agency or a participating lender.
| State | Program | Assistance | Key terms |
|---|---|---|---|
| California | CalHFA MyHome Assistance | Up to 3.5% of the price (FHA) or 3% (conventional) | Deferred payments until you sell, refinance or pay off the loan |
| Texas | TDHCA My First Texas Home | 2% to 5% of the loan amount | 0% interest; deferred or forgivable after 3 years |
| Florida | Florida Hometown Heroes | 5% of the loan amount, $10,000 to $35,000 | 0% interest, due on sale or refinance; for eligible workers |
| New York | SONYMA Down Payment Assistance Loan | Greater of 3% of the price (up to $15,000) or $3,000 | 0% interest; forgiven after 10 years |
| Georgia | Georgia Dream | Up to $10,000 (or $12,500 for eligible workers) | 0% interest, deferred until you sell or refinance |
| Pennsylvania | PHFA Keystone Advantage Assistance | Up to 4% of the price or $6,000, whichever is lower | 0% interest, repaid over 10 years |
| Michigan | MSHDA MI 10K DPA | Up to $10,000 | 0% interest, deferred until you sell or refinance |
California: CalHFA MyHome Assistance
CalHFA’s MyHome program offers a deferred-payment second loan of up to 3.5% of the purchase price with a CalHFA FHA loan, or up to 3% with a CalHFA conventional loan. You can use it for the down payment, closing costs, or both. You must be a first-time buyer, meet the income limits, live in the home, and complete a homebuyer education course.
Texas: TDHCA My First Texas Home
The Texas Department of Housing and Community Affairs offers 2% to 5% of the loan amount in assistance, paired with a 30-year fixed FHA, VA or USDA loan. You can choose a 0% deferred second loan repaid when you sell or refinance, or a version that’s forgiven after three years if you stay current and keep living in the home. Buyers generally need a 620 credit score, must meet county income limits, and must complete homebuyer education.
Florida: Hometown Heroes
This program helps eligible workers such as healthcare staff, teachers and school staff, first responders, childcare workers, and military members. It provides 5% of the first mortgage amount, between $10,000 and $35,000, as a 0% second loan with no monthly payments. Household income can’t exceed 150% of the county’s area median income. Funding is limited and first-come, first-served, so check availability with a participating lender.
New York: SONYMA Down Payment Assistance Loan
The State of New York Mortgage Agency offers the greater of 3% of the purchase price (up to $15,000) or $3,000, with a $1,000 minimum. The loan has 0% interest, no monthly payments, and is forgiven after 10 years. You must use a SONYMA mortgage and contribute at least 1% of the property value yourself. Keep in mind that SONYMA mortgages with this assistance usually carry a slightly higher interest rate.
Georgia: Georgia Dream
Georgia Dream offers $10,000 or 5% of the purchase price, whichever is less. Public protectors, educators, healthcare workers, active military, and households with a member who has a disability can receive up to $12,500 or 6%. The assistance is a 0% loan with no monthly payments, repaid when you sell, refinance or pay off your mortgage. You typically need a credit score of at least 640 and must meet income and price limits.
Pennsylvania: PHFA Keystone Advantage Assistance
The Pennsylvania Housing Finance Agency offers up to 4% of the purchase price or $6,000, whichever is lower. Unlike most programs on this list, it’s repaid monthly over 10 years, but at 0% interest. You need a credit score of at least 660 and must use a PHFA first mortgage.
Michigan: MSHDA MI 10K DPA
The Michigan State Housing Development Authority offers up to $10,000 toward your down payment, closing costs, and prepaid expenses. The loan is interest-free and has no monthly payments; you repay it when you sell, refinance, or pay off your first mortgage. It’s available statewide, must be combined with a MSHDA MI Home Loan, and requires a homebuyer education course.
How to Find Programs in Your State
If your state isn’t on this list, you still have options:
- Visit your state’s housing finance agency website. Every state has one, and most list their down payment assistance programs on their homebuyer pages.
- Check with your city or county. Many local governments run their own assistance programs, sometimes with larger amounts.
- Ask lenders who participate in state programs. Not every lender offers them, so ask directly when you compare offers.
- Talk to a HUD-approved housing counselor. Counseling is often free and can help you find and combine programs.
Common Requirements to Expect
Most first-time homebuyer programs share a few basic rules:
- Income limits: usually based on your county’s area median income and your household size.
- Purchase price limits: the home must cost less than a set maximum.
- Minimum credit score: commonly between 620 and 660.
- Homebuyer education: a short course, often available online.
- Primary residence: you must live in the home, not rent it out.
- Your own contribution: some programs require you to put in a small amount, such as $1,000 or 1% of the price.
Pros and Cons of Down Payment Assistance
Pros:
- Lets you buy sooner, without waiting years to save a large down payment.
- Many loans have 0% interest and no monthly payments.
- Some assistance is fully forgiven after a few years.
Cons:
- Most deferred loans must be repaid when you sell or refinance.
- Some programs come with a slightly higher interest rate on your main mortgage.
- Funding is limited, and some programs run out of money during the year.
- Paperwork and approval can take longer.
A Note From José María
I’m José María, and while researching this guide for Finanzasclave, the thing that stood out most was how much these programs differ from one state to another, and how often they change. My advice is to treat this list as a starting point: before you make an offer, ask your lender which first-time homebuyer programs are open in your area right now, and get the terms in writing. Some of the best help is local and easy to miss.
Final Thoughts
First-time homebuyer programs can reduce the cash you need to buy a home by thousands of dollars. Start by checking your state’s housing finance agency, compare the terms carefully, especially whether the assistance must be repaid, and work with a lender who knows the programs well. Combined with a low down payment loan, they can make homeownership possible much sooner than you might expect.
Frequently Asked Questions
Do I have to repay down payment assistance?
It depends on the program. Some assistance is a grant or is forgiven after a few years, while most deferred loans must be repaid when you sell, refinance, or pay off your mortgage.
Can I combine first-time homebuyer programs?
Sometimes. Some state and local programs can be combined, but others don’t allow it. Your lender can tell you which combinations are permitted.
What credit score do I need for first-time homebuyer programs?
Many state programs require a score between 620 and 660. FHA loans can accept lower scores, but the state assistance paired with them often has its own minimum.
Can I use these programs if I owned a home before?
Often, yes. Most programs only require that you haven’t owned and lived in a home in the past three years.
Do first-time homebuyer programs have income limits?
Most do. Limits are usually based on your county’s area median income and your household size, so they can be quite different from one area to another.
This article is for informational purposes only and is not financial advice. Program terms, funding and eligibility rules change frequently. Always confirm current details with the program administrator or a participating lender.