Best First-Time Homebuyer Programs by State
Buying a home for the first time is a major milestone. But for many people, the process feels overwhelming—especially when it comes to the financial side. Rising home prices, strict credit requirements, and large down payments can make it difficult to qualify for a mortgage. That’s where state-backed programs come in.
Every U.S. state offers some form of financial assistance for first-time homebuyers. These programs are designed to make buying a home more affordable and less stressful. They include help with down payments, low-interest mortgages, tax credits, and even closing cost assistance. Understanding what each state offers can help you take the right steps toward homeownership.
What Is a First-Time Homebuyer Program
A first-time homebuyer program is a government-backed initiative created to make homeownership more accessible to people who have never owned a home—or who haven’t owned one in the past three years. These programs are usually managed by state housing finance agencies (HFAs), which work with local lenders to deliver support.
The primary goal of these programs is to reduce the financial barriers that stop people from buying a home. The most common barrier is the down payment, which can range from 3% to 20% of the home’s price. In many states, programs provide money to cover some or all of this cost, either as a grant or a secondary loan.
In addition to financial help, these programs often include homebuyer education courses. These courses are important because they teach new buyers how mortgages work, what their long-term obligations are, and how to avoid financial risks. Some states require the course as part of the application process.
Common Types of State-Sponsored Homebuyer Assistance
Every state structures its programs a little differently, but most of them offer one or more of the following forms of assistance:
Down Payment Assistance (DPA)
Down payment assistance is the most common benefit offered. Many first-time buyers struggle to save enough for a down payment, especially if they are paying rent or dealing with student loans. DPA programs solve this by providing money that can cover all or part of the down payment.
DPA usually comes in one of three forms:
- Grants – This is money you don’t have to pay back. It’s often given to low- or moderate-income buyers.
- Forgivable loans – These are loans that you don’t have to repay if you stay in the home for a certain number of years, usually five to fifteen, depending on the program.
- Deferred-payment loans – These loans don’t require monthly payments and are only due when you sell, refinance, transfer title, or pay off your mortgage.
Closing Cost Help
Closing costs typically add up to 2%–5% of the home’s purchase price. These include fees for things like the home appraisal, title insurance, and loan origination. Some programs offer extra funds to cover these costs. This can be especially helpful for buyers who already used their savings for the down payment.
Mortgage Credit Certificates (MCCs)
MCCs are federal tax credits available through some state or local programs. They allow buyers to claim a portion of their annual mortgage interest as a credit on their federal income tax return (subject to IRS rules). If the certificate’s credit rate exceeds 20%, the maximum annual credit is capped at $2,000 under IRS guidance.
Low-Interest Mortgage Loans
Many state programs offer first mortgages with interest rates below what you might find on the open market. These loans are usually 30-year, fixed-rate mortgages with predictable monthly payments. Lower interest rates mean lower long-term costs, which can be a deciding factor for budget-conscious buyers.
Who Qualifies for These Programs
Eligibility rules vary from state to state, but there are common standards used to determine who qualifies.
Most programs require that you:
- Are a first-time homebuyer (defined as not owning a home in the past three years)
- Use the home as your primary residence
- Meet income limits based on your household size and location
- Purchase a home within the program’s price limits
- Take a homebuyer education course
Some programs allow exceptions. For example, if you are a veteran or buying in a federally targeted area, you may be eligible even if you’ve owned a home before.
Income and purchase price limits are based on the median income for your county or metro area. These are updated annually by the U.S. Department of Housing and Urban Development (HUD). It’s important to check the current numbers on your state housing agency’s website.
How State Programs Differ from Federal Options
State programs are designed to work with local markets and populations. They are often combined with federally-backed loans like FHA, VA, or USDA loans. Here’s how they compare:
- FHA loans are insured by the Federal Housing Administration. They allow for down payments as low as 3.5% and generally accept credit scores down to 580, subject to lender overlays.
- VA loans are guaranteed by the U.S. Department of Veterans Affairs. They offer no-down-payment loans for eligible service members, veterans, and surviving spouses.
- USDA loans are for homes in eligible rural areas. They also allow for no down payment and are limited to lower- or moderate-income buyers.
State programs typically offer DPA and other benefits that can be layered onto these federal loans. For example, a buyer can use a state down payment loan or grant in combination with an FHA mortgage to reduce upfront costs.
First-Time Homebuyer Programs in the Northeast
New York
The State of New York Mortgage Agency (SONYMA) offers 30-year fixed-rate loans with low interest and down payment assistance through:
- Down Payment Assistance Loan (DPAL): the lesser of 3% of the purchase price or $15,000 (minimum $3,000).
- DPAL Plus (ATD/DPAL Plus): an enhanced DPA up to $30,000 for qualifying low-income first-time buyers.
Programs include Achieving the Dream (lower rates, 3% down) and can be combined with DPAL; rate-locks up to 120–240 days are available.
Massachusetts
MassHousing offers the MassHousing Mortgage with Down Payment Assistance up to $25,000 statewide (expanded June 11, 2025). It also provides MI Plus mortgage insurance that can cover up to six months of principal and interest if the borrower loses a job (benefit caps and eligibility apply). Some cities (e.g., Boston) also operate their own DPA programs that can reach higher caps, separate from MassHousing.
Pennsylvania
The Pennsylvania Housing Finance Agency (PHFA) offers Keystone Home Loan first mortgages and the Keystone Advantage Assistance Loan: up to 4% of the purchase price or $6,000 (whichever is less) at 0% interest, repaid monthly over 10 years for down payment and closing costs. PHFA-approved lender and homebuyer education are required.
New Jersey
The NJHMFA First-Time Homebuyer Mortgage/“Homeward Bound” comes with a statewide Down Payment Assistance Program of up to $15,000, structured as an interest-free, five-year forgivable second loan (no monthly payment) when using an NJHMFA first mortgage. Income and purchase-price limits apply.
First-Time Homebuyer Programs in the Midwest
Illinois
The Illinois Housing Development Authority (IHDA) offers IHDAccess options:
- Access Forgivable: 4% of purchase price, up to $6,000, forgiven monthly over 10 years.
- Access Deferred: up to $7,500 deferred (due at sale/refi/maturity).
- Access Repayable: up to $10,000, 0% interest, repaid monthly over 10 years.
Use of an IHDA-approved lender and counseling are required.
Michigan
The Michigan State Housing Development Authority (MSHDA) offers MI Home Loan first mortgages and the MI 10K DPA Loan: up to $10,000 in interest-free assistance for down payment/closing costs (paired with MI Home Loan; education required; min credit score typically 640).
Ohio
The Ohio Housing Finance Agency (OHFA) provides Down Payment Assistance sized at 3% of the purchase price for conventional loans or 3.5% for FHA/VA/USDA loans. The assistance is forgiven after seven years; if you sell or refinance within seven years, you must repay it. Note this supersedes older references to “2.5% or 5%.”
Minnesota
Minnesota Housing offers Start Up first mortgages plus two DPA options: the Deferred Payment Loan (up to $14,000) and the Deferred Payment Loan Plus (up to $18,000), both at 0% interest with repayment deferred until sale, refi, transfer, or payoff. Counseling is required.
First-Time Homebuyer Programs in the South
Texas
The Texas Department of Housing and Community Affairs (TDHCA) runs My First Texas Home (for veterans and first-time buyers) and My Choice Texas Home (also open to repeat buyers). Both offer 30-year fixed-rate loans with down payment and closing cost assistance up to 5% of the first-lien amount. Assistance is delivered as a grant or a second-lien depending on program and borrower selection. The Texas State Affordable Housing Corporation (TSAHC) separately offers grants or deferred-forgivable second liens and can pair assistance with Mortgage Credit Certificates.
Florida
Florida Housing Finance Corporation offers the FL Assist second mortgage: up to $10,000 at 0% interest, deferred (not forgivable) and due upon sale/refi, payoff, or when the home is no longer your primary residence. Certain borrowers may also access the Florida HLP ($10,000, 3% fully amortizing 15-year second). Education and approved lenders are required.
Georgia
The Georgia Dream program provides standard DPA of up to $10,000, and up to $12,500 for PEN (protectors/educators/nurses/active-duty military) and CHOICE (households with a member living with a disability). A 640 minimum credit score, income/asset limits, and education apply.
North Carolina
The NC Home Advantage Mortgage™ offers down payment assistance up to 3% of the loan amount (forgiven at 20% per year in years 11–15). First-time buyers and military veterans may qualify for the NC 1st Home Advantage Down Payment of $15,000, also a 0% deferred second with forgiveness over 15 years. Approved lenders and education apply.
First-Time Homebuyer Programs in the West
California
CalHFA offers the MyHome Assistance Program, a deferred-payment junior loan of up to the lesser of 3.5% of purchase price or appraised value to help with down payment/closing costs. CalHFA’s CalPLUS first mortgage pairs with the Zero Interest Program (ZIP) for closing-cost help; as of May 2025, CalPLUS with ZIP must be combined with MyHome. The California Dream For All shared-appreciation program has allocated all funds and is not accepting new applications; existing applicants can check the voucher portal.
Washington
The Washington State Housing Finance Commission offers down payment assistance second mortgages (various programs), commonly up to $15,000 with 1% interest and 30-year deferred payments when paired with an eligible first mortgage. A free homebuyer education course is required.
Arizona
The Arizona IDA HOME+Plus program provides a 30-year fixed mortgage with up to 4% DPA (amount varies by loan type). Separately, the state’s Arizona Is Home program launched in 2024 has exhausted its available funds as of July 9, 2025; check the program page for updates. Education and income limits apply.
Colorado
The Colorado Housing and Finance Authority (CHFA) offers first mortgages with either a DPA Grant up to 3% of the first mortgage (no repayment) or a DPA Second Mortgage Loan up to 4% (0%, deferred until payoff/sale/refi). Certain CHFA offerings cap assistance at the lesser of 3%–4% or $25,000; CHFA also lists targeted options for first-generation buyers and people with permanent disabilities. Education and income/price limits apply.
First-Time Homebuyer Programs in Alaska and Hawaii
Alaska
The Alaska Housing Finance Corporation (AHFC) provides First Home and First Home Limited low-rate loans and requires/encourages homebuyer education (e.g., HomeChoice, a six-hour course). In March 2025, AHFC introduced a 97% LTV (3% down) option on certain loans to reduce upfront cash needs. For down payment/closing cost assistance, AHFC coordinates with partners via AHELP and the Home Opportunity Program (HOP), which offer grants or zero-interest/forgivable assistance to income-eligible buyers (availability varies by partner and funding).
Hawaii
The Hawaii Housing Finance and Development Corporation (HHFDC) has historically offered MCCs; as of 2025 the state MCC program is not accepting new applications (reissuance for existing MCC holders only). Buyers should also look at county-level programs that may offer additional assistance.
How to Apply for a State Homebuyer Program
Start by visiting your state’s housing finance agency website. These sites provide official guidelines, eligibility checkers, and lists of approved lenders.
The process generally involves:
- Checking income and purchase price limits
- Completing a homebuyer education course (online or in person)
- Getting pre-approved by a program-approved lender
- Applying for a mortgage and DPA through that lender
- Submitting all required documents, such as tax returns, pay stubs, and credit reports
Mistakes to Avoid When Using State Assistance
Many buyers miss out on assistance because they don’t understand the rules or wait too long. Avoid these common mistakes:
- Assuming you don’t qualify because of your income
- Forgetting to take the required education course
- Choosing a lender that’s not approved by the program
- Not reviewing all program options available in your area
Tips for Choosing the Right Program in Your State
Every state offers multiple options. Here’s how to narrow them down:
- Compare interest rates and repayment terms
- Check if the DPA is a grant, forgivable loan, or repayable loan
- Look for extra support if you’re a veteran, teacher, or public worker
- Confirm whether the program allows you to combine benefits with FHA or VA loans
- Speak to a housing counselor or approved lender to help find the best option for your situation.
Conclusion
State programs exist to help make homeownership possible, especially for first-time buyers. With the right support, many families can overcome the financial challenges of buying a home. By understanding what’s available in your state, meeting the requirements, and working with approved professionals, you can move forward with confidence.
For the most accurate and updated information, always check your state’s official housing agency website or speak to a certified housing counselor.