Almost every guide to first-time homebuyer programs opens with a national list of loan types. That is the wrong starting point. Washington sets who counts as a first-time buyer and insures some loans, but the cash comes from a state agency with its own caps and payback rules.
So the question is not “what programs exist.” It is “what does my state hand me, and what do I owe back.” DollarVisor takes no payment for placement, and no lender can buy into the tables below.
1. Do You Even Count as a First-Time Buyer?
Quick Answer: You count if you have not owned your main home in the previous three years. That is the federal test, and most state programs copy it. Owning a home in 2019 and renting since does not disqualify you, which surprises a large share of applicants who never apply.
HUD writes the rule the states borrow. Under 24 CFR 93.2, a first-time homebuyer has not owned a principal residence in the three years before the assisted purchase, and HUD applies the same window across its programs. It is a re-entry rule, not a never-owned rule.
Three groups get in even if the three-year test fails:
- Displaced homemakers. Federal law says one may not be denied first-time buyer eligibility because a spouse owned the home.
- Single parents whose only ownership was with a former spouse, under the same definition.
- Buyers in targeted census tracts, and veterans in several states. Texas and North Carolina both waive the first-time test for them.
Assistance sits on top of an ordinary loan, so start with how mortgages work from first loan to final payment.
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2. What First-Time Homebuyer Programs Actually Give You
Quick Answer: Four things, and they stack. Down payment and closing cost money, a below-market first mortgage rate, a tax credit on the interest you pay, and required education that unlocks the rest. Most first-time homebuyer programs bundle the first two and treat the money as a second mortgage, not a gift.
The word “grant” does damage here. Very little of this money is one. It is usually a second lien recorded against your house the same day as the first mortgage, on terms that decide whether you ever repay it.
- Down payment and closing cost help. A fixed sum or a percentage of the price, delivered as a deferred, forgivable, or repayable second mortgage.
- A first mortgage at the agency’s rate. Agencies fund through bonds and often price below the retail market, though not always: compare.
- A mortgage credit certificate. A federal tax credit on a slice of your annual mortgage interest, claimed every year you keep the loan.
- Homebuyer education. A required course, usually six to eight hours, that most agencies insist on before closing.
All of it runs through a state agency, as our loans hub sets out, and none of it changes your underwriting. You still qualify for the house on your own income.
3. What Ten States Offer First-Time Buyers in 2026
Quick Answer: Maximum assistance ranges from $6,000 in Illinois to 5% of the purchase price with no dollar cap in Pennsylvania. Six of the ten largest housing states cap the help in flat dollars; four tie it to a percentage of the price, which matters more as prices rise. Every one of these awards records a second lien.
| State | Program | Maximum help | How you repay |
|---|---|---|---|
| California | CalHFA MyHome | 3.5% (FHA) or 3% (conventional) | Deferred until sale or refinance |
| Texas | My First Texas Home | Up to 5% of the loan | Deferred 30 years, or forgiven in 3 |
| Florida | Hometown Heroes | Fully committed for 2025–26 | Watch for the next allocation |
| New York | SONYMA DPAL | $15,000 ($30,000 on DPAL Plus) | Forgiven after 10 years |
| Pennsylvania | PHFA K-FIT | 5%, no dollar cap | Forgiven 10% a year for 10 years |
| Illinois | IHDA Access | $6,000 to $10,000 by option | Forgivable, deferred, or repaid |
| Ohio | OHFA Your Choice! | 2.5% or 5% of the price | Forgiven on a set schedule |
| Georgia | Georgia Dream | $10,000, or $12,500 for PEN roles | 0% second lien, due on sale or refinance |
| North Carolina | NC 1st Home Advantage | $15,000 | Forgiven 20% a year in years 11 to 15 |
| Michigan | MSHDA MI 10K DPA | $10,000 | 0%, due on sale or transfer |
Source: DollarVisor compilation of published terms from ten state housing finance agencies, August 2026.
Two patterns jump out. Percentage states index their help to prices; flat-dollar states lose ground every year prices rise. And the repayment column is where two identical $15,000 awards stop being equal. Terms are published by CalHFA, the Texas Homebuyer Program, New York HCR, PHFA, IHDA, OHFA, Georgia DCA, NCHFA, MSHDA, and Florida Housing.
4. How Far That Money Goes on a Median-Priced Home
Quick Answer: A 3.5% down payment on the $410,700 median US home is $14,375. Percentage-based first-time homebuyer programs in Pennsylvania, Texas, and Ohio cover roughly 143% of that at the median price. Flat $10,000 awards cover about 70%. The gap widens every quarter prices climb.
| State | Coverage of the $14,375 down payment | Dollars | Share |
|---|---|---|---|
| Pennsylvania (5%) | $20,535 | 143% | |
| Texas (5%) | $20,535 | 143% | |
| Ohio (5%) | $20,535 | 143% | |
| New York ($15,000) | $15,000 | 104% | |
| North Carolina ($15,000) | $15,000 | 104% | |
| California (3.5% FHA) | $14,375 | 100% | |
| Georgia ($10,000) | $10,000 | 70% | |
| Michigan ($10,000) | $10,000 | 70% | |
| Illinois ($10,000) | $10,000 | 70% |
Modeled by DollarVisor from published agency maximums and the Q2 2026 median sales price of $410,700.
Read this as a ceiling, not a promise. State price caps usually sit below the national median, so a Pennsylvania or Ohio buyer applies the percentage to a cheaper house. The pattern holds anyway: a percentage keeps pace with the market, a fixed $10,000 cap does not.
5. When the Help Stops Being Free
Quick Answer: Four repayment shapes exist across state programs, and they diverge sharply between year three and year twelve. On a $15,000 award, a Pennsylvania-style loan has already forgiven $7,500 by year five, while a deferred California or Michigan loan still owes the full $15,000 in year fifteen.
| Structure | Year 1 | Year 3 | Year 5 | Year 10 | Year 12 | Year 15 |
|---|---|---|---|---|---|---|
| Forgiven 10% a year (PA) | $13,500 | $10,500 | $7,500 | $0 | $0 | $0 |
| Forgiven all at year 10 (NY) | $15,000 | $15,000 | $15,000 | $0 | $0 | $0 |
| Forgiven 20% a year, years 11–15 (NC) | $15,000 | $15,000 | $15,000 | $15,000 | $9,000 | $0 |
| Deferred until sale (CA, GA, MI) | $15,000 | $15,000 | $15,000 | $15,000 | $15,000 | $15,000 |
| Repaid at 0% over 10 years (IL) | $13,500 | $10,500 | $7,500 | $0 | $0 | $0 |
Modeled by DollarVisor from published 2026 agency forgiveness schedules. Illustrative; your note governs.
The last two rows look alike and feel nothing alike. Illinois reaches zero because you sent the agency about $125 a month for ten years. California, Georgia, and Michigan still owe the full amount at year fifteen, but you never wrote a check: it comes out of the sale.
Selling in year seven turns a $15,000 New York award back into a $15,000 bill, while the same move in Pennsylvania costs $4,500.
Refinancing triggers most of these clauses too. Our guide on when to refinance your mortgage covers the break-even math that repayment can quietly break.
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6. The Four Gates Every Program Puts in Front of You
Quick Answer: Income cap, purchase price cap, credit score floor, and a homebuyer education course. Miss any one and the file stops. Credit floors sit at 640 in North Carolina and 660 for Pennsylvania’s K-FIT, and two states also cap how much cash you may keep after closing.
These gates are where most applications actually fail, and all four are knowable before you apply.
- Income limits. Usually 80% to 140% of area median income. Georgia Dream caps at $137,555 for one- and two-person households and $158,188 for three or more as of July 2026.
- Purchase price limits. Set county by county, and often well under the national median.
- Credit score. 640 is the common floor; PHFA asks 660 on K-FIT. Below either, fixing the file first is cheaper than any award.
- Liquid asset caps. Michigan allows $20,000 in cash after closing, Pennsylvania $50,000. Agencies will not fund buyers who could self-fund.
Credit is the gate you can clear in months rather than years. Start with what actually moves the number in how credit scores work.
7. How Many Months Assistance Takes Off Your Savings Plan
Quick Answer: Saving $500 a month, a 3.5% down payment on the median home takes 29 months. A $10,000 award cuts that to nine. That 20-month jump, not the dollar figure, is what first-time homebuyer programs are really selling: you buy at today’s price instead of the price two years from now.
| Down payment target | Amount | $300/mo | $500/mo | $800/mo | $1,200/mo |
|---|---|---|---|---|---|
| 3% (conventional floor) | $12,321 | 42 | 25 | 16 | 11 |
| 3.5% (FHA floor) | $14,375 | 48 | 29 | 18 | 12 |
| 5% | $20,535 | 69 | 42 | 26 | 18 |
| 10% | $41,070 | 137 | 83 | 52 | 35 |
| 20% | $82,140 | 274 | 165 | 103 | 69 |
Modeled by DollarVisor on the Q2 2026 median price of $410,700. Cash saving only, no investment return, closing costs excluded.
Read the 20% row, then stop worrying about it. At $500 a month it is a 13-year project on the median home, which is why 3% and 3.5% products exist, and why assistance is aimed at them.
8. How to Apply Without Losing the Money
Quick Answer: Go to the state agency first, then to one of its approved lenders. Applying directly to a bank that is not on the list is the single most common way buyers lose access to state assistance, because the money can only be attached at origination.
- Read your state agency’s county caps. Income and price limits set your search range before anything else.
- Book the education course early. Certificates take days, and many agencies will not fund without one on file.
- Pick a lender from the approved list. Only those lenders can originate the first mortgage with the second lien attached.
- Get pre-approved with the award written in. Ask for a loan estimate showing both liens so the cash to close is real.
- Confirm funding before you write an offer. Allocations run out mid-year, as Florida’s Hometown Heroes did in 2026.
Most awards sit behind an FHA first mortgage, so those rules apply in parallel. Check them in our guide to FHA loan requirements for 2026 before you pick a lender.
9. When a First-Time Program Is the Wrong Move
Quick Answer: Skip the program if the agency’s first mortgage rate is materially above what you can get elsewhere, if you expect to move within three years, or if the award pushes you into a house whose running costs you cannot carry. Assistance is cheap money, not free money.
Three situations where buyers regret it:
- A rate premium that outlasts the award. Half a point extra can cost more than a $10,000 award before year ten. Price a conventional 3% loan beside it.
- A short stay. Selling in year two under a ten-year schedule returns most of the money, and you paid closing costs twice.
- Ignoring carrying costs. Taxes, insurance, and maintenance do not care that the down payment was subsidized: budget them with our guide to the types of insurance you need.
None of this argues against state assistance. It argues for pricing the whole package: rate, award, forgiveness clock, and holding period, rather than the headline figure alone.
10. The Bottom Line
Quick Answer: Check the three-year rule, open your state agency’s page, compare the award against a plain conventional loan, and read the forgiveness schedule before the dollar amount. Done in that order, first-time homebuyer programs pull the purchase forward by two to four years for most households.
The money is real and large next to the down payment most buyers actually need. What varies is who pays it back and when. A Pennsylvania buyer who stays ten years keeps every dollar; a Michigan buyer settles from the sale. Both are fine deals, and neither is a grant.
Start with your state agency, not a lender advertisement, and hold every offer against two numbers: cash to close, and total cost over the years you expect to stay.
Want your assistance offer checked before you sign?
Send us the state, the program name, the award amount, and the quoted first-mortgage rate. We will return the forgiveness timeline and the cash-to-close comparison against a plain conventional loan: no lender referrals, no sponsored placements.
11. Frequently Asked Questions
What are first-time homebuyer programs?
They are state-run packages combining down payment and closing cost money with a fixed-rate first mortgage, and sometimes a mortgage tax credit. The help is normally a second lien rather than a gift. Ten large states offer between $6,000 and 5% of the price.
Who qualifies as a first-time homebuyer?
Anyone who has not owned a principal residence in the previous three years, under the HUD definition most agencies follow. Displaced homemakers and single parents whose only ownership was with a former spouse also qualify. Several states waive the test for veterans and targeted census tracts.
How much down payment assistance can I get?
It depends on the state. Illinois runs $6,000 to $10,000 by option. Georgia and Michigan cap at $10,000, New York and North Carolina at $15,000. Pennsylvania, Texas, and Ohio pay a percentage of the price instead.
Do I have to pay down payment assistance back?
Usually yes, in one of three ways. Forgivable awards write off over five to fifteen years if you stay. Deferred awards wait until you sell or refinance, then come out of proceeds. Repayable awards are monthly, typically 0% over ten years.
Can I use a first-time buyer program with an FHA loan?
Yes, and that is the most common pairing. State help attaches as a second lien behind an FHA, VA, USDA, or conventional first mortgage, provided an approved lender originates the first mortgage.
What credit score do I need?
640 is the usual floor across state programs, though Pennsylvania’s K-FIT asks for 660. Some agencies also cap the liquid assets you may keep after closing: $20,000 in Michigan and $50,000 in Pennsylvania.
This page is for general information and is not financial advice. Program terms, income limits, price caps, and funding availability change without notice and vary by county; confirm current details with your state housing finance agency and an approved lender before making a decision. See our full disclaimer.