First-Time Home Buyer Grants 2024

First-time home buyer grants are a type of financial assistance provided to individuals or families trying to purchase their first home. To qualify for these grants, you need to meet the minimum income requirement for the area and any other condition specified by the grant.

If you're a first-time home buyer, you may be eligible for a grant to help you purchase your first home. While the specifics of these grants can change yearly, the one constant is that these grants keep popping up every year.

In this guide, we'll discuss some of the first-time home buyer grants that can help ease the process of buying your first home. We'll also show you how to qualify and apply for one of these grants and provide information to help you find other available home buyer grants in your area.

What Is a First-Time Home Buyer Grant?

A first-time home buyer grant is a type of financial assistance given to an individual or family to help them purchase their first home. These grants are often provided by state and local governments, often in partnership with non-profit organizations, banks, and other entities.

How Do First-Time Home Buyer Grants Work?

First-time home buyer grants usually have less strict qualifications than other types of mortgage assistance programs, such as those offered through the Federal Housing Administration (FHA) or Veterans Affairs (VA). This means that even if you have a lower income or less-than-perfect credit, you may still qualify for a first-time home buyer grant.

The grant funds may sometimes be applied towards a down payment or closing costs. In other cases, the grant may provide direct financial assistance to help with monthly mortgage payments. Regardless, the one thing to keep in mind is that most first-time home buyer grants do not need to be repaid except stated otherwise.

6 First-Time Home Buyer Grants

Here is a list of some of the first-time home buyer grants that are available in 2022.

1. National HomeBuyers Fund
2. State and Local Government Grants
3. HUD's Good Neighbor Next Door Program
4. The Neighborhood Lift Grant Program
5. Bank of America Grant Programs
6. HomePath Ready Buyer Program

1. National Home Buyers Fund

The National HomeBuyers Fund is a nonprofit corporation that offers up to 5% of a home's purchase price in down payment assistance for home buyers. This grant is available to first-time and returning home buyers across the nation.

The grant can be combined with other mortgage assistance programs like FHA, USDA, VA, and conventional loan financing. To be eligible, you must meet income limits and start your application through any of their participating lenders. 

Check with your lender to see if they are part of the NHF lenders, or call the NHF at 866-643-4968 to find a lender near you.

2. State and Local Government Grants

Many states and local governments offer first-time home buyer grants or assistance programs to help residents with the down payment or closing costs. Programs vary by state, but most require that you meet certain income limits and take a homeownership education class.

Some examples of these programs include:

• California's GSFA Platinum program (at least a portion, if not all, of this grant has to be repaid)
• Texas's My First Texas Home program (Available to only Veterans and first-time home buyers)
• Florida's down payment assistance programs (Available only for loans with Florida's housing first mortgage loan.

To find out about grants and assistance programs in your area, check with your state housing finance agency or local government housing authority.

3. HUD Good Neighbor Next Door Program

The Good Neighbor Next Door program is a grant offered by the Department of Housing and Urban Development (HUD) for eligible law enforcement officers, teachers, firefighters, and emergency medical technicians.

This program offers 50% off the list price of a HUD-owned home located in revitalization areas. Recipients must commit to living on the property for at least three years or be required to pay back the loan. You can apply for the Good Neighbor Next door Program through any HUD-preapproved lender.

4. The NeighborhoodLIFT Grant Program

The NeighborhoodLIFT program is a grant collaboration between Wells Fargo and NeighborWorks America. The program offers down payment assistance grants to first-time and repeat home buyers in select cities and counties to revitalize neighborhoods. 

Eligibility requirements vary by city but typically include

• Minimum income limits for the area
• Completing a mandatory homeowner education 
• Purchasing a home within the selected city using any Neighborhood lift approved lender.

Since 2012, the LIFT program has been launched in 81 cities and counties across the nation. The grant amount provided also varies by city, starting from $7,500 in Birmingham to $25,000 in the Greater San Francisco Bay Area. 

5. Bank of America Grant Programs

Bank of America offers two grant programs to help first-time home buyers purchase their homes in select cities. The first program is a home grant program that provides a lender's credit up to $7,500 to help with the closing costs associated with the home.

The second program is a down payment assistance program that provides grants for about 3% f the home purchase price up to a maximum amount of $10,000. Their website also has a portal to help you find other downpayment assistance programs available in your state.

Eligibility requirements vary by program but include the following:

• Purchasing a primary residence within select geographical areas
• Being a first-time homeowner
• Minimum income requirements.

Note that the Bank of America loan grant is a deferred lenders credit that may be due when any of the following conditions are met:

• Sale
• Refinancing
• Transfer
• Repayment of the loan
• If the senior mortgage is assumed during the term of the loan.

6. HomePath Ready Buyer Program

The HomePath Ready Buyer program is a grant offered by Fannie Mae for first-time home buyers. Recipients can receive up to 3% of the home purchase price in grant funds to be used towards closing costs. 

Eligibility requirements include:

• Completing an online homeownership education course and receiving a certificate
• Meeting income limits and credit score minimums

This program is only available for purchases of HomePath properties, a foreclosed property owned by Fannie Mae.

Other Assistance Programs for Home Buyers

Habitat for Humanity

Habitat for Humanity is a nonprofit organization that helps low-income individuals and families become homeowners through no-interest loans and sweat equity. 

Eligibility requirements vary by location but typically include the following:

• Minimum income limits of not more than 60% of the median income of the area
• Ability to make monthly payments
• Willingness to contribute sweat equity towards building or improving your home. 

Each Habitat for Humanity application is managed at the local level through hundreds of local habitat for humanity locations across the nation.

Government-Backed Loans

The Federal Housing Administration (FHA), USDA, and the Department of Veterans Affairs (VA) offer government-backed loans with lower down payment requirements and more lenient credit qualifications.

These loans are only available through participating lenders, and eligibility requirements vary with the loan type but typically require applicants to be first-time home buyers (or home buyers that haven’t owned a home in the past three years) that meet minimum income limits.

Moreover, because the government backs these loans, lenders can offer borrowers lower interest rates to reduce the burden of mortgage payments.

NACA

The Neighborhood Assistance Corporation of America (NACA) offers a grant program for first-time home buyers with low to moderate incomes and credit challenges. The program includes financial education, one-on-one counseling, and access to fixed interest rate mortgages with no down payment required. 

Eligibility requirements include:

• Meeting income limits
• Ability to afford monthly mortgage payments
• Attendance at all required counseling sessions. 

NACA also offers its Home Save program to help individuals who are about to lose their homes.

How to Qualify for a First-Time Home Buyer Grant

Qualifications for first-time home buyer grants vary by program and location, but general eligibility requirements often include the following:

• Home price limits: Some programs limit the maximum purchase price of a property in order to target assistance toward lower-priced homes.
• Income limits: Programs often have maximum income limits in order to target assistance toward lower-income individuals and families. The exact definition of low income will vary according to your state. But in general, this income classification covers individuals and households earning 80% or less of the median income in the area.
• First-time home buyer status: Many programs restrict grants to individuals and families who have not owned a home in the past three years or longer.
• Your residence status: First-time home buyer grants are applicable for purchasing homes that are primary residences rather than those you intend to rent out for profit.
• Your contribution to the purchase: Most home buyer grants require you to contribute towards the purchase of the house. This can either be 1% of the house purchase price or $1,000. The exact amount will depend on the specific requirements of the grant.
• Additional education: Some programs may also require the completion of a homeownership education course before approving the grant. Of course, this is not a requirement for all grants. However, statistics have shown that borrowers who received homeowner education are 30% less likely to have mortgage problems.

How to Find Local or State First-Time Home Buyer Grants

In addition to national programs, many states and cities offer their own first-time home buyer grants. These can have different eligibility requirements and may focus on specific demographics, like veterans or teachers.

Start your search by contacting your state's housing finance agency, which will provide information about any state-specific programs you may be eligible for. In addition, your city or county government may also offer first-time home buyer assistance programs.

You can also search for grant opportunities through national databases like Grants.gov and The HUD’s list of state housing finance agencies. And don't forget about grants offered by employers or local organizations, like community development corporations or credit unions.

Lastly, check in with real estate agents in your area, as they may have knowledge of local grant opportunities that can benefit you.

Remember to thoroughly research any program before applying and always confirm the legitimacy of the organization offering the grant. Scams targeting first-time home buyers exist, so be cautious and only work with reputable organizations. Keep in mind that grants are not guaranteed – even if you meet all eligibility requirements.

How to Apply for a First-Time Home Buyer Grant

The process for applying for a first-time home buyer grant can vary depending on the specific program and where you live. For example, some programs may have an online application process. In contrast, others may require you to submit a paper application or attend a grant program orientation.

It's important to do your research and find out the specific requirements for grant programs in your area. Then, once you've found the requirements, check to make sure you're eligible and meet all the requirements of the grants. This can also include getting your credit score report, bank statement, and other documents proving your eligibility. And don't be shy to apply for multiple grants in order to improve your chances of getting the financial assistance you need.

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