Property

First-Time Buyer Programs by State

By Becca Bennett

Data & Guides Property First-Time Buyer Programs by State

Buying a home for the first-time comes with upfront costs beyond the purchase price, including down payments, closing costs, and mortgage insurance. In 2025, there were an estimated 852,600 first-time home buyers in the U.S. Every state offers assistance programs designed to reduce these upfront costs for first-time buyers, ranging from down payment grants to below-market interest rate loans.

This article outlines the first-time buyer programs available in each state, along with the federal programs you can pair with them, so you can identify the options you may qualify for.

Types of state programs for first-time buyers

First-time buyer programs address different cost barriers in the homebuying process, primarily the upfront cash needed for a down payment and closing costs, and the ongoing cost of mortgage interest. Programs generally fall into a few categories.

• Down Payment Assistance (DPA) - Typically distributed as a second mortgage with deferred or no-interest repayment, or as a lump-sum grant, and generally used alongside a loan program like FHA, VA, USDA, Fannie Mae, or Freddie Mac.
• Mortgage Credit Certificates (MCCs) - A tax credit on mortgage interest issued by state and local housing finance agencies, typically 20% to 40% of interest, capped at $2,000 per year by the IRS.
• Below-market interest rate mortgages - State housing finance agency loan programs that offer rates below standard market rates, often paired with down payment assistance.
• Federal loan programs - FHA, USDA, and VA loans that lower minimum down payment and credit score requirements compared to conventional loans.

[1] Zillow, “First-Time Home Buyer Loan Programs” https://www.zillow.com/learn/first-time-buyer-loan-programs/

State-by-state first-time buyer programs

The table below summarizes the different types of first-time buyer assistance programs offered by each state. While the categories of assistance are consistent nationwide, the specifics of each program can vary by state.

Factors like eligibility requirements, assistance amounts and purchase price limits can all differ depending on where you’re buying, so make sure you understand the benefits and limitations in your state.

Data note: The data in this table provides an overview of first-time buyer programs available in each state. This data may change or vary depending on your situation, so be sure to contact your state’s local housing department for information specific to you.

First-time buyer application checklist

Before you start looking to buy your first home, here are some things to consider getting in order to help the process run smoothly.

• Make sure you're ready for homeownership - Make sure your income is stable, you plan to stay in the area for several years, and you understand the added responsibilities that come with owning a home.
• Work out what you can afford - Pull your credit report from Equifax, Experian, and TransUnion and correct any inaccuracies, decide how much you can put toward a down payment, and set aside savings to cover unplanned repairs or maintenance.
• Collect your paperwork - Put together proof of income such as recent pay stubs and tax returns, several months of bank and investment statements, and a record of your past addresses and landlord contacts.
• Shop around and research mortgages - Compare offers from more than one lender, seek pre-qualification, and secure a pre-approval letter, which involves a credit and background check and can strengthen your position with sellers.
• Build your support team - Choose a real estate agent you're comfortable working with, and bring in a trusted friend or family member for additional input as you move through the process.
• Define what you're looking for - Decide which features matter most to you, such as location, size, or outdoor space, and browse different neighborhoods and listings to refine your preferences.

[2] Zillow, “Handout: First-Time Home Buyer Checklist” https://www.zillow.com/pro/first-time-home-buyer-checklist/

First-time buyer FAQs

What defines a "first-time" homebuyer?

Federal housing regulations define a first-time homebuyer more broadly than someone purchasing a home for the very first time. The term applies to an individual and spouse who haven't owned a home during the three-year period before purchasing with assistance under the American Dream Downpayment Initiative, and the definition also extends to displaced homemakers and single parents. This is the definition most state and federal programs reference, so someone who owned a home more than three years ago may still qualify. [3] U.S. Legal, “First Time Home Buyer (HUD)” https://definitions.uslegal.com/f/first-time-homebuyer-hud/

Can I combine down payment assistance with an FHA loan?

Yes. Home loans from the Federal Housing Administration (FHA) make it easier for borrowers with lower credit scores or a lower down payment to buy a house. FHA regulations do not prohibit down payment assistance from being used together with an FHA loan. Specific combinations may still depend on which state or local program you're using and whether your lender participates in it, so be sure to check the guidelines in your state. [4] Experian, “FHA Loan Down Payment Requirements” https://www.experian.com/blogs/ask-experian/fha-loan-down-payment-requirements/

Do I have to complete a homebuyer education course to get assistance?

You are required to complete a homebuyer education course to qualify for many first-time buyer assistance programs. Whether you will need to complete one of these courses will depend on the exact assistance program you want to use, and the rules in your state.

Homebuyer education courses cover things like assessing your readiness to buy, managing money and credit, understanding mortgages, shopping for homes, and maintaining a home and mortgage. If this is required in your situation, your lender cannot complete the loan without the certificate, so it’s important to check if you need it, and to complete the course if you do. [5] Fellowship Home Loans, “Do You Actually Have to Take a Home Buyer Education Course?” https://fellowshiphomeloans.com/do-you-actually-have-to-take-a-homebuyer-education-course/

How do I claim a Mortgage Credit Certificate (MCC)?

If you're issued a qualified Mortgage Credit Certificate (MCC) by a state or local housing finance agency, you use IRS Form 8396 to calculate your mortgage interest credit for the current year and any credit carryforward for the following year. This can directly reduce your federal tax liability rather than lowering your upfront closing costs. [6] IRS, “About Form 8396” https://www.irs.gov/forms-pubs/about-form-8396

Sources

• ^[1] Zillow, “First-Time Home Buyer Loan Programs” https://www.zillow.com/learn/first-time-buyer-loan-programs/
• ^[2] Zillow, “Handout: First-Time Home Buyer Checklist” https://www.zillow.com/pro/first-time-home-buyer-checklist/
• ^[3] U.S. Legal, “First Time Home Buyer (HUD)” https://definitions.uslegal.com/f/first-time-homebuyer-hud/
• ^[4] Experian, “FHA Loan Down Payment Requirements” https://www.experian.com/blogs/ask-experian/fha-loan-down-payment-requirements/
• ^[5] Fellowship Home Loans, “Do You Actually Have to Take a Home Buyer Education Course?” https://fellowshiphomeloans.com/do-you-actually-have-to-take-a-homebuyer-education-course/
• ^[6] IRS, “About Form 8396” https://www.irs.gov/forms-pubs/about-form-8396