Skip to Main Content

Programs for First-Time Homebuyers: Down Payment Assistance and More

There are many assistance programs available for first-time homebuyers, on both a state and national level.

By Tara Mastroeni

Written by

Tara Mastroeni


Tara Mastroeni is an expert on real estate and mortgage. Her work has been featured in Forbes, Fox Business, Business Insider, and more.

Edited by Reina Marszalek

Written by

Reina Marszalek

Senior editor

Reina is a senior mortgage editor at Credible and Fox Money.

Updated March 28, 2024

Editorial disclosure: Our goal is to give you the tools and confidence you need to improve your finances.

Read More


Buying a home is no small feat — but there are programs designed to assist you in your journey toward owning a home. These programs for first-time homebuyers offer down payment or closing cost assistance and low down payment mortgage options.

What are the benefits of a first-time homebuyer program?

If you’re a first-time homebuyer, these programs can make it easier for you to buy your first home by offering a form of financial assistance.

Here’s a closer look at some of the benefits they can provide:

  • Down payment assistance: The down payment is often the largest cost associated with buying a home, which often makes it the largest obstacle for first-time homebuyers. As a result, many first-time homebuyer programs offer down payment assistance in the form of grants, forgivable loans, or payment-deferred loans.
  • Closing cost assistance: Since closing costs can often add up to an additional 2%-5% of the home’s sale price, first-time homebuyers often need help covering these costs as well. Similar to your down payment, you may be able to get a grant or a loan to offset the amount of money that you need to bring to the closing table.
  • Government loan programs: Government-insured loans offer a guarantee that protects the lender from taking a loss if you default on the loan. In exchange for this reassurance, lenders offer more flexible qualifying standards and lower down payment requirements on these loans.
  • Tax credits: Although the Housing and Economic Recovery Act’s $7,500 credit for first-time homebuyers ended in 2010, some state and local governments still offer tax credit options. Plus, owning a home can also help you save money on your taxes because you’re able to deduct certain homeowner expenses, such as mortgage insurance, from the income used to calculate your taxes.
  • Homebuyer education: If you aren’t sure where to start with the home-buying process, many first-time homebuyer programs include a homebuyer education component. These classes and resources can help educate you on your loan options, the buying process, and how to apply for a mortgage. A mortgage calculator is also a valuable resource to help get you started.

Learn More: First-Time Homebuyer Tips

Credible makes getting a mortgage easy

Find Rates Now

Checking rates won’t affect your credit score

5 national first-time homebuyer programs

There are many homebuyer assistance programs available on a national scale (plus five types of mortgage loans). Here’s a list of five of the most popular options to help you get started in your search.

Find Out: How to Find the Best Mortgage Lender

FHA loan

An FHA loan is a mortgage that is insured by the Federal Housing Administration, a government agency that sets standards for how homes are constructed and financed in the U.S.


  • The minimum down payment (or minimum required investment) is 3.5%
  • Lower credit score requirements


  • 500 to 579 credit score when paired with a 10% down payment
  • 580+ credit score to qualify for a 3.5% down payment
  • Plan to use the home as your primary residence for at least one year
  • Buy a one-to-four-unit property

Learn more about FHA loans

Fannie Mae HomeReady Mortgage program

Fannie Mae’s HomeReady Mortgage program helps homebuyers who might qualify for a mortgage, but might not have enough for a large down payment.


  • Meant to help lower-income buyers become homeowners
  • Minimum down payment is 3%
  • Funds for the down payment can come from gifts, grants, or another loan


Learn more about the Fannie Mae HomeReady Mortgage program

Freddie Mac Home Possible Mortgage

Freddie Mac’s Home Possible Mortgage program gives low-to-moderate income homebuyers more credit flexibility to help them buy a home.



Learn more about the Freddie Mac Home Possible Mortgage

HUD’s Good Neighbor Next Door program

HUD’s Good Neighbor Next Door program helps law enforcement officers, K-12 teachers, firefighters, and emergency medical technicians afford a home at a discounted price.


  • Designed to help educators, emergency medical technicians, firefighters, and law enforcement officers become homeowners
  • Gives you the ability to save up to 50% off of the list price of the home


  • Employed as one of the above professions
  • Plan to live in the home for at least three years
  • Buy a home in an approved revitalization area
  • Borrow a silent second mortgage that’s worth the same amount as the home price discount

Learn more about HUD's Good Neighbor Next Door program

HomePath Ready Buyer program

Fannie Mae’s HomePath Ready Buyer program assists borrowers with closing costs, but they must successfully complete an online education course first.


  • Provides assistance with closing costs (up to 3% of the home’s purchase price)


  • Complete an approved homebuyer education course
  • Buy an eligible, foreclosed property from

Learn more about the HomePath Ready Buyer program

10 states with first-time homebuyer programs

There are many homebuyer assistance programs available depending on the state you live in, as well. Here are some of the most popular options in the following states:






New York

North Carolina




Keep Reading: Do You Count as a First-Time Homebuyer? The Answer Might Surprise You

Some states even have programs targeted at student loan borrowers

You might think that having student loans means you shouldn’t buy a home. However, that’s not necessarily the case. Some states even have assistance programs aimed at helping people with student loans buy a house.

Here are some options for the states listed below:

Read On: How to Buy a House With Student Loan Debt

Meet the expert:
Tara Mastroeni

Tara Mastroeni is an expert on real estate and mortgage. Her work has been featured in Forbes, Fox Business, Business Insider, and more.