From grants to low-interest loans, this state-by-state guide to first-time homebuyer programs is your map to making homeownership possible

GBJSTOCK // Shutterstock Buying your first home can feel like a huge leap. With rising home prices, a competitive housing market, and the weight of all those extra costs, it’s easy to feel overwhelmed. Over half of prospective homeowners say that the high cost of living is preventing them from saving for a down payment. But there’s a wealth of first-time home buyer incentives designed to help make homeownership more accessible, easing the financial burden along the way. Whether in need of help with the down payment, securing a better mortgage rate, or reducing tax liabilities, there are programs tailored to first-time buyers. In this comprehensive guide, MakeMyMove breaks down everything to know about first-time home buyer incentives–how they work, who qualifies, and how to make the most of these opportunities. If you’ve been dreaming of homeownership, these programs might just be the key to making that dream a reality. Types of first-time home buyer programs First-time home buyer incentives are programs designed to assist individuals who have never owned a home. These incentives come in many forms, including: Down payment assistance programs (DPA) For many first-time buyers, saving enough for the down payment is the biggest hurdle. Traditional mortgage lenders often require a 20% down payment, but down payment assistance programs can significantly reduce this burden. Even if you think you’ve saved enough for a down payment, it’s worth checking if you qualify for down payment assistance. These programs can reduce the amount of cash needed upfront and help keep more money in your pocket. Tax credits Tax credits are another powerful incentive for first-time home buyers. One of the most common programs is the Mortgage Credit Certificate, which allows you to claim a portion of your mortgage interest as a tax credit. This can reduce your annual tax bill, freeing up more money to put toward mortgage payments or saving for the future. Tax credits vary by state, so be sure to check what’s available in your area. Low-interest loans and specialized mortgages Many first-time home buyers can take advantage of mortgage programs that offer lower interest rates, reduced down payment requirements, or more lenient credit score guidelines. These programs are specifically designed to make it easier for new buyers to enter the market and include: FHA loans: Insured by the Federal Housing Administration, these loans offer down payments as low as 3.5% and more flexible credit score requirements. VA loans: Available for military service members, veterans and their families–these loans offer no down payment and competitive interest rates. USDA loans: If you’re purchasing a house in a rural area and meet certain income criteria, a USDA loan offers 100% financing and very low interest rates. Conventional 97 loans: These loans allow for a down payment as low as 3%, which can help to avoid private mortgage insurance. Grants Grants are essentially free money that can be used for various expenses related to purchasing a home, such as down payments or closing costs. While grants are less common than loans or tax credits, they do exist and are often tied to specific geographic areas or have income limits. Some grant programs are offered by non-profit organizations, while others are administered at the state or local level. How to find first-time home buyer programs Navigating the sea of first-time home buyer programs can be a bit tricky, but there are ways to streamline the search. Here are a few tips for finding the right incentives for any situation: Consult with a real estate agent A good real estate agent who works with first-time home buyers can help you understand the various incentives available in your area. They’re often familiar with local and state programs and can guide you through the application process. Check with your local housing authority State and local housing authorities are excellent resources for finding down payment assistance and other home buyer incentives. They can provide details on eligibility, available programs, and application deadlines. Use online resources Websites like the Department of Housing and Urban Development and the Federal Housing Administration offer comprehensive information about federal programs. Many states also have dedicated pages outlining available programs and their requirements. Talk to your lender Mortgage lenders often work with first-time home buyers and can offer guidance on loan options and assistance programs that might be available. Tips for Maximizing First-Time Home Buyer Incentives To make the most of the available programs, keep these tips in mind: 1. Start early The earlier you start your research and application process, the better. Some programs have limited funds and tight deadlines, so make sure to give yourself enough time to complete the necessary paperwork. 2. Boost your credit score The better your credit score, the more favorable loan terms you’ll be able to access. While many programs have more flexible credit requirements, improving your credit score can help you qualify for better interest rates. 3. Shop around for the best deals Don’t settle for the first mortgage rate you come across. Compare rates from different lenders and ask about special offers or programs for first-time buyers. You might be surprised at the savings you could find. 4. Understand eligibility requirements Each program has different criteria, so make sure you read the fine print. Some programs are only available to buyers with specific income levels or in particular locations. 5. Consult a professional It’s a good idea to talk to a financial advisor or tax professional to understand how these incentives might impact taxes or finances in the long term. Examples of First-Time Home Buyer Programs Alabama Housing Finance Authority Offers below-market, 30-year fixed mortgage interest rates and DPA. Must work with approved lenders and meet standards for creditworthiness. Alaska Housing Finance Corporation Must complete a home buyer education course to receive DPA. Arizona Department of Housing DPA for first-time home buyers. Must attend an 8-hour home buyer education class. Arkansas Development Finance Authority Down payment and closing cost assistance. Must obtain an “ADFA StartSmart” or “ADFA Move-Up” first mortgage. California Housing Finance Agency MyHome offers a deferred-payment junior loan of up to 3.5% of the purchase price or appraised value to assist with down payment and/or closing costs. Must be a first-time home buyer and complete home buyer education counseling. Chase Homebuyer Closing cost and down payment assistance toward the purchase of a primary home in one of 14,000 minority communities in designated census tracts. The grant is available for those with DreaMaker, Standard Agency, Federal Housing Administration, and Veterans Affairs mortgages. It can also be used to purchase points from a lender to reduce your interest rate. City of Madison DPA for first-time home buyers. Aimed at supporting low-to-moderate-income home buyers to purchase a single-family home, condominium, or one-half a duplex in the City of Madison. CITI Credit that can be applied towards closing costs. You must purchase a primary residence in specific areas of certain cities and meet other eligibility requirements. Colorado Housing & Financing Authority Offers down payment assistance grants and second mortgage loans to those who are going through their first mortgage loan program. A credit score of 620 or higher and must take a home buyer education course. Community Development Corporation of Utah DPA for first-time home buyers, a home purchase value limit of $492,000 is required. Connecticut Housing Finance Authority Financing options to cover down payment and closing costs. Must qualify for a CHFA mortgage from a participating lender. County of Maui Department of Housing & Human Concerns First-time home buyers DPA program. Must be a current Maui resident and must complete a home buyer education class. Delaware State Housing Authority Assistance for first-time or repeat buyers, tax credits, and DPA. A minimum credit score of 620, and there are caps to the home’s purchase price. Detroit Down Payment Assistance Provides grants up to $25k for down payment, closing costs, etc. Available to people who haven’t owned a home in the last three years, resided in Detroit for at least a year, and meet requirements to withhold after the purchase of the home. Fannie Mae Federal Grant Program First-time home buyers can receive up to 3% of the purchase price in closing cost assistance toward the purchase of a HomePath property upon completion of an online home buyer education course. Must be at or below 100% of the median income for your area. Recipients must also buy a HomePath property, which is a foreclosed home owned by Fannie Mae. Florida Housing Finance Corporation Florida Housing’s second mortgage program to assist borrowers with down payment assistance and closing costs. A minimum credit score of 640 is required, and the buyer must work with an approved lender. Georgia Department of Community Affairs Georgia Dream Homeownership Program provides affordable mortgage financing for eligible home buyers as well as down payment and closing cost assistance. Grow South Dakota Down payment and closing cost assistance in the form of a 0% deferred loan. Must take a home buyer education course to qualify. Housing and Urban Development (HUD) Get 50% of the list price of a home, and eligible properties are located in revitalization areas. To qualify, you must be (or have been) a full-time law enforcement officer, firefighter, emergency medical technician, or teacher. IHDA Mortgage Three active programs are available offering forgivable loans, deferred loans, and zero-interest loans. A credit score of 640 or higher is required, with a debt-to-income ratio of 50% or lower. Indiana Housing & Community Development Authority Down payment assistance, low-interest rate loans and tax credits available. Credit score must be 640 or greater and must be a legal U.S. resident purchasing a home. Iowa Finance Authority Down payment and closing cost assistance programs in conjunction with their mortgage programs. Varies from program to program, must be a first-time home buyer, veteran, or be purchasing a home in a targeted area to qualify for the first program. Buyer’s credit score must be over 640 to qualify for any program. Kansas Housing Helps first-time home buyers with down payment and closing cost assistance. First-time home buyers, Kansans who have a median income at or below 80% of their area qualify. Kentucky Housing Corporation The Regular Down Payment Assistance Program is available to all KHC first-mortgage loan recipients. Home buyers must have a 620 credit score or higher. Louisiana Housing Corporation Down payment assistance programs and help with closing costs. DPA can be in the form of a loan but the closing costs can be provided through a grant. For first-time home buyers with a minimum credit score of 640, the property must be located in Louisiana. Maine State Housing Authority Mortgage program for borrowers who have never lived in a home owned by their biological parents or legal guardians. The program is also available to borrowers who have been in foster care at some point in their childhood. Offers low fixed interest rates, down payment and closing costs assistance and education classes. MakeMyMove Relocation Assistance Financial assistance is available in multiple communities across the country which can be used towards closing costs or a down payment on a home. Amount and requirements vary by community. Maryland Mortgage Program Offers a loan for down payment and closing costs with your home loan. Michigan State Housing Development Authority Offers DPA loans, federal tax credits, classes and workshops. Minimum credit score of 640, first-time home buyer (repeat home buyers in some areas can still qualify), sales price limit of $224,500 statewide. Minnesota Housing Loan programs for both first-time and repeat home buyers, along with refinancing options. Applicants are required to complete an approved home buyer education course. A minimum credit score and house price limits depending on the location within the state must be met. Mississippi Home Corporation Requirements in certain counties require you to be a first-time home buyer to receive the down payment assistance. Must also use an approved lender and take a home buyer education class. Missouri Housing Development Commission Offers three different programs for home buyers in Missouri. Affordable interest rates, down payment assistance, or tax credits to help prospective buyers in a competitive market. The “first place program” requires you to be a first-time home buyer or veteran. Montana Department of Commerce Must qualify for a Regular Bond Program Loan to receive DPA. Nebraska Investment Finance Authority Provides first and second mortgage loans, the first mortgage loan includes down payment and closing cost assistance. Different programs including one geared for first-time home buyers and another for military members. Nevada Housing Division Program offering 5% of the home loan value to apply toward down payment or closing costs. A minimum credit score of 640 and the buyer must complete a home buyer education course. New Hampshire Housing DPA, closing cost assistance and other perks. Must complete a home buyer education course. New Jersey Housing and Mortgage Finance Agency The NJHMFA DPA provides up to $15,000 for qualified first-time home buyers to use as a down payment and closing cost assistance when purchasing a home in New Jersey. Must be paired with a NJHMFA first mortgage loan. New Mexico Mortgage Finance Authority Provides home buyers with down payment and closing cost assistance as well as competitive interest-rate mortgage loans. A credit score of at least 620 is required and buyer must be willing to take pre-purchase home buyer counseling. North Carolina Housing Finance Agency Down payment assistance for first-time home buyers and military veterans. Must have a credit score of 640 or higher, be a first-time home buyer or military veteran. North Dakota Housing Finance Agency Offers loan programs with down payment and closing cost assistance. To receive the extra assistance, you must be considered a low-income buyer and complete a home buyer education course. Ohio Finance Agency Offers a variety of loans with different perks depending on your situation. DPA, tax credits, veteran-related benefits and benefits for people with higher education. Open to people who have not had an ownership interest in their primary residence in the last three years and must be purchasing a home in the listed target areas. Oklahoma Housing Federal Agency Must have a credit score of 640 or higher, use an approved lender, and be a legal U.S. resident to qualify for DPA. Oregon Housing and Community Services DPA funds are awarded to certain organizations to disperse. Must complete a home buyer education course. Pennsylvania Housing Finance Agency Various loans and programs are available based on your situation. One is the PHFA grant to help with downpayment and closing costs. Must be obtaining an HFA PreferredTM (Lo MI) loan and attend in person if the credit score is lower than 680. Rhode Island Housing Assistance for down payment and/or closing costs for first-time home buyers. Be a first-time home buyer with a minimum credit score of 660, complete a home buyer education course, and obtain a RIHousing-funded first mortgage. South Carolina State Housing Finance & Development Authority Multiple DPA programs are available.  Tennessee Housing Development Agency Buyer is required to attend a home buyer education class to receive DPA. Texas Department of Housing & Community Affairs Offers various programs with benefits like DPA. The “My First Texas Home” program is only available for first-time homeowners and veterans. Texas State Affordable Housing This nonprofit is offering two different loan programs as well as grants for DPA. “Home Sweet Texas” is open to any Texan, “Home for Texas Heroes” is limited to those within a certain career field, and you do have to be a first-time home buyer for some of the additional grants. Vermont Housing Finance Agency DPA for first-time home buyers, also offers tax credits. Available with a VHFA program. Virginia Department of Housing and Community Development Down payment and closing cost assistance for first-time home buyers. Virginia Housing Provides home loans, free first-time home buyer courses and grants to cover closing costs and down payment. First-time home buyer or repeat buyer purchasing in areas of economic opportunity. Washington Housing Finance Commission DPA when you use a mortgage program through the Washington State Housing Finance Commission and also have a credit score of at least 620. Wells Fargo Homebuyer Access Have to apply for a Wells Fargo fixed-rate conventional loan to qualify for a down payment grant. West Virginia Housing Development Fund Down payment assistance or help with closing costs. Have to have a loan through the Homeownership Program. Wisconsin Housing and Economic Development Authority Must purchase a home in the state using a WHEDA Advantage Conventional loan or WHEDA Advantage FHA loan to qualify for DPA. Wyoming Community Development Authority DPA with a credit score of 620 or higher. Unlocking the door to homeownership Becoming a homeowner is an exciting milestone but it can be financially challenging, especially for first-time buyers. Fortunately, with the right-first-time home buyer incentives, you can significantly reduce your costs and increase your chances of success. From down payment assistance to tax credits, there are numerous programs designed to help you achieve your homeownership dreams. Remember, the key to unlocking the door to homeownership is knowledge. By doing your research, understanding the eligibility requirements, and taking advantage of the various incentives, you can make your first home purchase a reality. Stay informed, work with professionals, and take advantage of these opportunities to set yourself up for financial success as a homeowner. Now, go ahead–your first home is waiting. This story was produced by MakeMyMove and reviewed and distributed by Stacker.