First-Time Home Buyer Programs in 2026: State-by-State

First-Time Home Buyer Programs in 2026: State-by-State Guide

Every year, over $2 billion in first-time home buyer assistance goes unclaimed. Not because people don't qualify. Because they don't know it exists.

Every state in the U.S. has programs designed to help first-time buyers with down payments, closing costs, and below-market interest rates. Most are funded through state housing finance agencies (HFAs) and are available right now. Here's what you need to know.

What Counts as a "First-Time Home Buyer"?

The definition is more generous than you'd think. For most programs, a first-time buyer is someone who has not owned a home in the past three years. That means:

• You've never owned a home (obviously qualifies)
• You owned a home but sold it more than three years ago
• You went through a divorce and your ex kept the house
• You owned a mobile home that wasn't on a permanent foundation

Some programs also waive the first-time buyer requirement for veterans, buyers in targeted areas, or buyers purchasing in certain census tracts.

Types of Programs Available

Down Payment Assistance Grants

Free money that doesn't need to be repaid. Typical amounts range from $2,000 to $25,000 depending on the state and program. These are usually tied to income limits and sometimes require homebuyer education courses.

Forgivable Second Mortgages

You receive a loan for your down payment or closing costs. If you stay in the home for a set period (usually 5 to 10 years), the loan is completely forgiven. Leave early, and you repay a prorated amount.

Deferred-Payment Loans

A second mortgage with no monthly payments. The balance is due when you sell, refinance, or pay off your primary mortgage. Some are zero-interest, making them essentially free money while you live in the home.

Below-Market Interest Rates

Many state HFAs offer first mortgage loans at rates 0.25% to 1% below market. On a $250,000 loan, a 0.5% rate reduction saves about $75 per month, or over $27,000 over the life of the loan.

Mortgage Credit Certificates (MCCs)

An MCC gives you a federal tax credit equal to a percentage (typically 20% to 50%) of your mortgage interest each year. On a $200,000 loan at 6.5%, a 25% MCC could reduce your federal tax bill by $3,250 per year. This benefit continues as long as you live in the home and pay mortgage interest.

Notable Programs by Region

Northeast

• New York: SONYMA offers down payment assistance up to $15,000 plus below-market rates. Achieving the Dream program requires as little as 3% down with no PMI requirement
• Massachusetts: MassHousing offers up to $50,000 in down payment assistance in certain communities. ONE Mortgage program provides fixed-rate loans with no PMI
• Pennsylvania: PHFA offers Keystone Advantage Assistance with up to $6,000 in forgivable assistance

Southeast

• Florida: Florida Housing offers multiple down payment programs ranging from $7,500 to $10,000 in forgivable second mortgages
• Georgia: Georgia Dream program provides $10,000 in down payment assistance ($12,500 for certain professions like teachers and healthcare workers)
• North Carolina: NC Home Advantage offers up to 3% of the loan amount in down payment help as a forgivable loan

Midwest

• Ohio: OHFA offers grants and reduced-rate loans. Your Choice Down Payment Assistance provides 2.5% or 5% of the purchase price
• Illinois: IHDA offers up to $10,000 in forgivable down payment assistance through the Opening Doors program
• Michigan: MSHDA offers up to $10,000 in down payment assistance statewide, $15,000 in targeted areas

Southwest

• Texas: TDHCA offers up to 5% of the loan amount in down payment and closing cost assistance. My First Texas Home program includes below-market rates
• Arizona: Arizona IDA offers up to 5% of the loan amount in down payment assistance as a 3-year forgivable loan

West

• California: CalHFA offers multiple programs including forgivable equity builders and dream-for-all shared appreciation loans up to 20% of the purchase price
• Colorado: CHFA offers a grant up to 3% of the first mortgage for down payment and closing costs
• Washington: WSHFC offers up to $10,000 in down payment assistance as a second mortgage with 0% interest

How to Find Programs in Your State

Start with these resources:

• Your state housing finance agency: Search "[your state] housing finance agency" and look for their first-time buyer page
• DownPaymentResource.com: Enter your location to see available programs
• HUD.gov: Lists local housing counseling agencies who can walk you through options for free
• Your city or county housing department: Many local governments have their own programs on top of state ones

Stacking Programs: How to Maximize Your Benefits

Many programs can be combined. A common stack looks like this:

• State HFA first mortgage at a below-market rate
• State down payment assistance grant ($5,000 to $10,000)
• City or county closing cost assistance ($2,000 to $5,000)
• Mortgage Credit Certificate for ongoing tax savings

Combined, these programs can reduce your out-of-pocket costs by $15,000 to $25,000 and lower your monthly payment by $100 or more compared to going without them.

Eligibility Requirements (Common Across Most Programs)

• Income limits: Usually 80% to 115% of area median income. In most metro areas, individuals earning $50,000 to $80,000 qualify
• Credit score: Typically 620 to 660 minimum, though some programs go lower
• Homebuyer education: Most programs require completing a HUD-approved course (available online, usually 4 to 8 hours)
• Purchase price limits: Programs cap the home price, usually near or slightly above the area median
• Occupancy: Must be your primary residence

The Application Process

Applying for assistance programs is not a separate process from getting a mortgage. Here's how it works:

• Find a lender approved to originate loans through your state HFA
• Apply for your mortgage and the assistance program at the same time
• Complete any required homebuyer education
• The assistance is applied at closing, reducing your cash needed

Start early. Some programs have limited funding and operate on a first-come, first-served basis. Others have application windows. Your lender or housing counselor can tell you what's currently available.

The Bottom Line

Billions of dollars in first-time buyer assistance are available right now. The programs exist. The money is there. Most people just don't know to ask. Do your research, find an approved lender, and take advantage of everything you qualify for.

Not sure which programs you qualify for? SOMA matches you with available assistance programs based on your income, location, and buyer profile. Stop leaving free money on the table.