First Time Homebuyer Grants

Buying your first home is one of the biggest financial steps most people take, and the down payment alone keeps many would-be buyers renting longer than they want to. The good news: there are real federal and state programs designed to help first-time homebuyers. The bad news: most online "first-time homebuyer grant" pitches promising $5,000–$5,000,000 in free money are scams. Here's what actually exists.

What counts as a "first-time homebuyer"

Most programs define a first-time homebuyer as someone who has not owned a home in the past three years. This means many people who have owned before can still qualify, including those who have been renting after divorce or a previous sale.

Federal loan programs (not grants, but the foundation of most help)

Most federal "help" for first-time buyers comes through low-down-payment loan programs:

• FHA loans — 3.5% down with credit scores as low as 580; backed by the Federal Housing Administration
• VA loans — 0% down for eligible veterans, active-duty servicemembers, and qualifying spouses
• USDA Rural Development loans — 0% down for moderate-income buyers in eligible rural and many suburban areas
• HomeReady (Fannie Mae) and Home Possible (Freddie Mac) — 3% down conventional loans for buyers with good credit

Where the actual grant money lives: state housing finance agencies

This is the most overlooked piece. Every state has a housing finance agency (CalHFA in California, Virginia Housing in Virginia, NYHCR in New York, TDHCA in Texas, and so on) that runs first-time homebuyer programs. These often combine a low-rate mortgage with down payment and closing cost assistance — sometimes as forgivable second loans, sometimes as outright grants of $5,000 to $20,000 or more.

Eligibility usually requires:

• First-time homebuyer status (or buying in a designated area)
• Income below a state-set limit (often tied to area median income)
• Completing a HUD-approved homebuyer education course
• Using the program's approved lender

To find yours: search "[your state] housing finance agency" or use HUD's state-by-state homeownership directory.

Free help from HUD-approved housing counselors

Before you commit to a lender or program, talk to a HUD-approved housing counselor — the service is free or low-cost and they can walk you through your options, check your loan estimates, and help you avoid predatory lending. Call (800) 569-4287 or visit hud.gov/findacounselor.

What to watch out for

If a website promises "up to $5,000,000 in government grants" for first-time homebuyers, asks you to "register and claim your portion," or charges a fee to access grant programs — it's a scam. The federal government does not run a general first-time homebuyer cash grant program. Real assistance comes through the specific channels above, is always free to apply for, and is paid through your mortgage closing, not as a check.

FTC scam guidance: consumer.ftc.gov/articles/government-grant-scams.