First-time home buyer programs in US: cash grants and down payment assistance.

 

Having sufficient funds for a down payment and closing costs is the biggest obstacle for many potential home buyers to pursue their dream of homeownership. To address this issue many state goverments offer free money grants towards buying a house. Some states offer deferred loans to be used for down payment and closing costs. In some instances, those loans are forgiveable after a certain number of years of owning the house.

 

 

We compiled a comprehensive list of first-time home buyer programs, cash grants and down payment assistance offered in each US state and District of Columbia. Let's look at what you may be eligible for when purchasing a home in those states:

  

 

 

The Alabama Housing Finance Authority offers Step Up homeownership program which lets qualified buyers finance the down payment into a 10-year second mortgage and combine it with a 30-year, fixed-rate, first mortgage. For more info and additional requirements visit their website here.

 

 

The Alaska Housing Finance Corporation offers Closing Cost Assistance loan, which provides 30-year fixed interest rate with closing assistance of up to 4% of the initial principal balance of the mortgage loan. The assistance funds may be used toward a down payment and closing costs. Closing cost assistance is funded directly by Alaska Housing at the time of closing. More info here.

 

 

The State of Arizona offers Home+Plus Home Buyer Down Payment Assistance Program, which is administered by Arizona Industrial Development Authority. This home loan program provides a 30-year fixed-rate mortgage combined with a down payment assistance (DPA) ranging from 0%-5% depending the new underlying first mortgage. The DPA can be used towards the down payment, closing costs, or both. The DPA is provided in a form of a second mortgage, which is fully forgiven after 36 months. You don't have to be a first-time home buyer to qualify for the Home+Program. Learn more here.

 

 

The Arkansas Development Finance Authority created down payment assistance program (DPA). The DPA ranges from $1,000 to $10,000 for closing cost assistance. This program is a second mortgage, with a 10-year term. More details here.

 

 

The California Housing Finance Authority offers MyHome Assistance Program which features a deferred-payment junior loan of an amount up to the lesser of 3.5% of the purchase price or appraised value to assist with the down payment and closing costs, up to $15,000. Check out the additional details here.

 

 

The Colorado Finance Housing Authority offers Down Payment Assistance Grant of up to 3% of the first mortgage for the property. No repayment required. More info here.

 

Connecticut: 

 

The Connecticut Housing Finance Authority offers Downpayment Assistance Program (DAP) Loan program, which is a second mortgage loan on your home. DAP provides financing to cover down payment and closing costs, up to $20,000. You can find more details on their website.

 

 

The Delaware State Housing Authority (DSHA) would like to help you to kiss your landlord goodbye! DSHA offers down payment and closing cost assistance as well as First-Time Homebuyer Tax Credit. They offer a no-interest second mortgage loan of 2% to 5% of your first mortgage amount. The loan must be repaid upon the sale, transfer, or refinance of the home, or when it's no longer the primary residence of the borrower. You can also get the benefit of claiming part of the annual interest paid on your mortgage (35% of the interest), as a special tax credit, up to $2,000/year. Check out more details here.

 

 

The DC Housing Finance Agency offers programs to assist home buyers with down payment and closing cost on the purchase of their home in the District of Columbia. The assistance comes in a form of an interest-free loan. For specific requirements check their website here.

 

 

 

The Florida Housing Finance Corporation offers The FLAssist, a second mortgage program to assist borrowers with down payment and closing costs. Up to $10,000 on FHA, VA, and USDA loans, and up to $7,500 on conventional loans. The FLAssist is not forgivable, but it comes with 0% interest, and does not require monthly payments unless the property is sold, transfered, refinanced, the first mortgage satisfied (paid off), or in an invent when it's no longer occupied by the borrower. More details at floridahousing.org

 

Georgia: 

 

The Georgia Department of Community Affairs runs the Georgia Dream Homeownership Program which offers $7,500 in a form of second mortgage loan on the property, with 0% interest and no monthly payments. The amount is increased to $10,000 for protectors, educators and nurses. Click here to visit their website for more info.

 

 

Hawaii is known for its natural beauty and the high cost of its real estate. While we haven't found any state-wide programs for first-time home buyers in Hawaii, the County of Kaua'i offers a Home Buyer Program which provides the residents of the island of Kaua'i with low-cost mortgages. Find out more here.

 

 

The Idaho Housing and Finance Association offers down payment and closing cost assistance to home buyers with good credit. The assistance comes in a form of a second mortgage. Available up to 3.5% of the sale price. It is a forgivable loan, with tiered forgiveness over 7 years period. More info can be found on their website here. 

 

 

The Illinois Housing Development Authority offers mortgage called Opening Doors which allows borrowers to get $6,000 towards down payment and closing costs, in a form of a second mortgage loan with 0% interest. The second loan is forgiven after 5 years. Get more details here. 

 

 

The Indiana Housing & Community Development Authority (IHCDA) offers to first-time home buyers a mortgage program called First Place. It offers 6% down payment assistance, which is a second mortage loan. It is forgivable after 9 years, subject to conditions outlined by the IHCDA. You can find more info here.

 

 

The Iowa Finance Authority offers FirstHome Down Payment and Closing Costs Assistance in a form of $2,500 grant. Another option is a second loan program that offers a loan of up to 5% of the home's sale price or $5,000 (whichever is less). The loan is repayable, but carries no monthly payments. Minority Down Payment Pilot Program: offers additional $5,000 towards down payment and closings cost, and it can be combined with the $2,500 grant or the second loan option. More info at IowaFinance website.

 

 

The Kansas Housing Resources Corporation offers a program for first-time home buyers that lets them finance 15%-20% of the home purchase price with a 0% interest mortgage loan, which is forgiven if the buyer remains in the house for 10 years. More info here. 

 

Kentucky: 

 

The Ketucky Housing Corporation offers home buyers assistance with the down payment and closing costs in a form of a $6,000 loan, which is repayable over the period of 10 years. More info on their website. 

 

 

The Louisiana Housing Corporation offers the Resilence Soft Second program to first-time home buyers to help them with purchasing of a house. The program offers a 2nd loan of up to 20% of the purchase price (up to $55,000) and up to $5,000 toward the closing costs. For more details please visit their website.

 

Maine: 

 

The Maine State Housing Authority offers the Advantage down payment and closing cost assistance of $3,500 toward the cash you need for closing. For multi-unit properties the assistance can be higher: for two units Advantage is $7,000, three units is $10,500, and four units is $14,000. To check the program and eligibility requirements please visit there website. 

 

 

The Maryland Mortgage Program from the Maryland Department of Housing and Community Development offers Flex 5000 program which comes with $5,000 second loan for down payment and closing costs. This is a repayable loan, which is due when the first mortgage is satisfied (paid off, refinanced) or when property is sold or transfered. More details here.

 

 

Massachusetts real estate buyers may be eligible for 5% down payment and closing cost assistance, up to $25,000, when purchasing a property in Boston or Gateway City. Elsewhere in MA, the buyers are eligible for up to $15,000 is such assistance. Find out more at masshousing.com website. 

 

Michigan: 

 

The Michigan State Housing Development Authority, or MSHDA, offers up to $10,000 in form of a loan meant to assist home buyers with covering the down payment and closing costs. For more details and a list of requirements please visit their website.

 

 

The Minnesota Housing Finance Agency offers Down Payment and Closing Cost option of up to $17,000. For more info on the program requirement click here. 

 

Mississippi: 

 

The Mississippi Home Corporation (MHC) has programs that offer home buyers a cash assistance at closing. While the specific criteria of the program limits and requirements are not publish on their website, it does offer you additional information on what to do to qualify. Click here to visit the MHC website.

 

Missouri: 

 

The Missouri Housing Development Commission (MHDC) offers first-time home buyers Cash Assistance Loan, which is a forgivable second mortgage of 4% of loan amount to be used for down payment and closing costs. The loan will be forgiven if the borrower stays in the home for 10 years. Visit MHDC's website for more info.

 

Montana:  

 

The Montana Department of Commerce created Bond Advantage Down Payment Assistance Program which can be used for up to 5% of sales price, maximum of $10,000. The program is a form of a second lien mortgage with a 15 year amortization, and same interest rate as the first mortgage. More info here.

 

Nebraska: 

 

The Nebraska Investment Finance Authority (also known as NIFA) feature a Homebuyer Assistance Program. It allows home buyers to borrow 5% of the home's purchase price, up to $10,000. This loan is considered a second mortgage, and the term of the loan is 120 months, or 10 years. Visit NIFA's website for more details.

 

 

The Nevada Housing Division created Home Is Possible program which allows home buyers to borrow 5% of the home's value toward down payment and closing costs. This is a second lien mortgage, with a term of 30 years. There is a one-time origination fee of $755, paid at closing. More info on the program can be found here.

 

New Hampshire: 

 

The New Hampshire Housing Finance Authority offers cash of up to 4% to help with down payment and closing costs. Up to $35,000 in PurchaseRehab programs to help with purchase and rehab of fixer-upper homes. Home buyers also qualify for tax credit up to $2,000/year to help them reduce federal tax return liability. For more info click here.

 

New Jersey: 

 

The New Jersey Housing and Mortgage Finance Agency offers $10,000 down payment assistance program for first-time home buyers. For more info check out their webpage.

 

New Mexico: 

 

The New Mexico Mortgage Finance Authority offers a number of mortgage programs for home buyers, as well as down payment assistance program - up to $8,000 for down payment and closing costs. Check out their website for more info. 

 

 

The State of New York Mortgage Agency (SONYMA)  offers Down Payment Assistance Loan of up to 3% of the purchase price (up to $15,000) or $3,000, whichever is higher. The loan features 0% interest, no monthly payments, and is forgiven after 10 years. Read more details here.

 

If you are looking to purchase a property in New York City, The NYC Housing Preservation and Development offer HomeFirst Down Payment Assistance Program of up to $100,000 (yes, that's not a typo!) toward a down payment and closing costs on a 1-4 family house, condominium, or a cooperative in one of the five boroughs of NYC. This program is offered only to first-time home buyers, and they must purchase a home to use as their primary residence. They must occupy the property for at least 10 years for loans of up to $40,000 and for 15 years for loans above $40,000. There are quite a few conditions and requirements that have to be met for this program. You can find out more here.

 

 

The North Carolina Housing Finance Agency is offering down payment assistance of 5% of the loan amount with their NC Home Advantage Mortgage. The agency also offers an $8,000 down payment assistance option with NC 1st Home Advantage Down Payment, exclusively for first-time home buyers and military members who meet additional eligibility criteria. The repayment of the down payment assistance is only required if you sell, transfer, or refinance the property in the first 15 years of ownership. The down payment assistance is forgiven at 20% per year at the end of years 11-15, with a complete forgiveness at the end of 15 years. More details on these programs can be found on their website.

 

 

The North Dakota Housing Finance Agency offers Down Payment and Closing Cost Assistance (DCA) for low-income home buyers. The DCA is equal to 3% of the first mortgage loan amount in the form of credit towards your out of pocket requirements. Only one or two unit properties are eligible (one unit must me occupied by the borrower). Visit their website for full info.

 

Ohio: 

 

The Ohio Housing Finance Agency's down payment assistance of either 2.5% or 5% of the home's purchase price. This assistance is forgiven after 7 years. Visit MyOhioHome.org for full details.

 

 

The Oklahome Housing Finance Agency offers 3.5% Homebuyer Down Payment Assistance to Oklahomans across the state. First-time home buyers and repeat buyers qualify. Check out their website for more info.

 

Oregon: 

 

The Oregon Housing and Community Sevices' Homeownership Division awards funds to organizations that offer homebuyers who have completed Homebuyer Education and the recommended coaching from a qualified organization, up to $15,000 in down payment and/or closing costs assistance. Visit oregon.gov website forr more details and a list of organizations recently awarded funding for Down Payment Assistance program.

 

Pennsylvania: 

 

The PA Housing Finance Agency offers home loans with possible down payment and closing cost assistance as well as up to $2,000 a year if your qualify for the Mortgage Tax Credit Certificate. More info on their website. 

 

Rhode Island: 

 

The Rhode Island Housing offers to first-time home buyers mortgages with 100% financing (no down payment required) and closing cost assistance. Other loan programs also available. Learn more at rihousing.com 

 

 

The South Carolina Housing Finance and Development Authority offers competetive home loans and down payment assistance (DPA). The DPA is offered in form of a second mortgage which is forgivable either after 10 or 20 years, depending on the income criteria of the borrower. More info at SC Housing's website.

 

South Dakota: 

 

The South Dakota Housing Development Authority' Fixed Rate Plus loan program offers eligible first-time home buyers 3% or 5% of their first mortgage loan as a second mortgage, with 0% interest rate, due on sale or satisfaction of the first loan. The second loan requires no monthly payments and no additional fees. Learn more on their website.

 

 

The Tennessee Housing Development Agency (THDA) offers down payment assistance in two options: either $6,000 in form of a forgivable second mortgage on your home (you have to own the property for 30 years before the loan is forgiven), or THDA will provide 6% of the sale price in a form of a second mortgage, that is paid in monthly payments over 15 years at an interest rate that is the same as your first mortgage. The funds can also be used for closing costs. More info here.

 

Texas: 

 

The Texas Homebuyer Program can help provide down payment and closing costs in a form of a second mortgage, which carries 0% interest and no monthly payments. In an event you sell your property, satisfy your first mortgage, or transfer the title, you would have to pay back the second mortgage. Check out their official website for more details here. 

 

Utah: 

 

The Utah Housing Corporation offers down payment and closing cost assistance based on the needs of the individual borrower. You may be able to borrow your entire minimum required down payment plus all or a portion of your closing costs on a Utah Housing Corp. 30-year fixed rate second mortgage. Visit this webpage for more info. 

 

Vermont: 

 

The Vermont Housing Finance Agency's Equity Builder Down Payment Assistance provides for up to $15,000 for eligible first-time home buyers. Other assistance and programs available. Check out VHFA's website for more details. 

 

 

The Virginia Housing offers downpayment grants (no repayment required) as well as mortgage credit certificate to eligible home buyers. For more info visit their website. 

 

 

The Washington State Housing Finance Commission offers downpayment assistance loans for homebuyers who use their mortgage programs, Home Advantage and House Key. It's a second lien mortgage, typically up to $10,000. Check out their website for a full info.

 

 

The West Virginia Housing Development Fund offers down payment and closing cost assistance loans in conjunction with the Homeownership and Movin' Up programs. For Homeownership program the limit is $7,500 for loans with loan-to-value ratio greater to or equal to 90% of  the purchase price, and $10,000 for loans for less than 90% of the purchase price. Other limits available for Movin' Up program. The money borrowed for the down payment and closing cost is in form of a 15-year loan, with current rate of 2%. Check out their website for additional info.

 

 

The Wisconsin Housing and Economic Development Authority (WHEDA) offers up to 6% of the purchase price for down payment assistance (DPA). The DPA is offered in other amount with various pay-off options, depending on the type of the loan program. For full information visit WHEDA's website.

 

 

The Wyoming Community Development Authority offers down payment assistance of up to $10,000 to assist the borrowers with their down payment, closing costs, and prepaid expenses. For full details on the program please visit their website here.