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Vault’s Viewpoint

• First-home homebuyer grants are discounts in the form of closing cost or down payment assistance.
• Many first-time homebuyer grants are available, especially at the local and state level.
• To apply for a first-time homebuyer grant, you typically need to live in a specific area and meet certain income limits.

What Is a First-Time Homebuyer Grant?

First-time home buyer grant programs are a form of financial assistance that reduces the cost of buying a home. Typically, they come as closing cost or down payment assistance. For example, you might get a $5,000 credit for closing costs or 5% of the home’s cost to use as part of your down payment.

Lenders and federal, state, and nonprofit programs can all offer these grants. Typically, you’ll need to meet specific standards to qualify, like having an income below a certain level or moving to a specific area.

Benefits of First-Time Homebuyer Grants

• Can lower your down payment. First-time buyer assistance for down payments can cover part of your down payment, helping to reduce your out-of-pocket expenses.
• Can reduce your closing costs. Closing costs are expensive for buyers—somewhere between 3% to 6%. On a $300,000 home, that could be as much as $18,000. Many first-home homebuyer grants can reduce these fees.
• No need for repayment. First-time homebuyer grants aren’t a loan, and you don’t need to pay anything back later.

The Top First-Time Homebuyer Grants to Consider

The first-time homebuyer grants below can help lower your down payment or closing costs. While we’ve tried to gather all requirements, always check directly with the organization to see if you might qualify for a specific program.

1. HomeReady First Mortgage Grant

• Grant amount: $5,000 in down payment or closing cost assistance
• Qualifications: Must be a first-time homebuyer and live in an eligible area

The HomeReady First $5,000 grant from FannieMae is a rare grant that doesn’t hinge on where you buy your home. However, where you currently live is important—you need to live within one of 21 census tracts in eligible metropolitan statistical areas. In addition to the $5,000 credit, you can also get a $500 appraisal reimbursem*nt, a one-year home warranty and up to $1,000 in title insurance credit.

2. HomeReady Mortgage Grant

• Grant amount: $2,500 in down payment or closing cost assistance
• Qualifications: Must have low income and limited cash for down payment

If you don’t meet the location requirements of the HomeReady First program, you might have more luck with the HomeReady Mortgage grant instead. It doesn’t have restrictions on where you currently live or are planning on buying. As a bonus, you might qualify for as low as a 3% down payment.

3. National Homebuyers Fund

• Grant amount: Up to 5% of the mortgage loan amount (to be used for down payment or closing costs)
• Qualifications: Must have an eligible FICO Score, an allowable debt-to-income ratio and not exceed the income limit

The National Homebuyers Fund is a non-profit public benefit corporation that offers down payment or closing cost assistance in most states. You don’t have to be a first-time homebuyer, and you can take advantage of the grant whether you have an FHA, VA, USDA or conventional mortgage. You can even use the grant to refinance your primary residence.

4. Good Neighbor Next Door

• Grant amount: 50% of the list price of the home
• Qualifications: Must be a law enforcement officer, teacher (pre-Kindergarten through 12th grade) firefighter or emergency medical technician; must buy a home in a specific revitalization area and live there for three years

The Good Neighbor Next Door program is offered by the U.S. Department of Housing and Urban Development (HUD) to give back to people who serve the communities they live in. To take advantage of this 50% discount, you need to specifically buy a home listed with HUD and sign a second mortgage and note. This second mortgage is released after you meet the three-year residency requirement.

5. Bank of America Grant Programs

• Grant amount: $7,500 closing cost credit or $10,000 in down payment help
• Qualifications: Must live in an eligible state, occupy the home they buy and have a minimum loan-to-value ratio of 80%

If you take out a loan through Bank of America, you might qualify for several first-time homebuyer grant programs. While Bank of America specifically offers $7,500 in closing cost credits and $10,000 in down payment help, it also has lending specialists that can connect you with more programs in your state.

6. Chase Grant Programs

• Grant amount: Up to $7,500 for points, closing costs or down payment
• Qualifications: Must live in an eligible area and take out a DreaMaker, Standard Agency, Federal Housing Administration (FHA) or Veterans Affairs (VA) mortgage product from Chase

The Chase Homebuyer Grant is a good option if you live in an eligible area, as you can use it to lower your interest rate and reduce Chase fees. If there’s anything left, you can apply it toward your down payment. Chase also has a Homebuyer Assistance Finder that searches for down payment programs for specific addresses.

7. Wells Fargo Grant Programs

• Grant amount: $10,000 for down payment assistance or up to $5,000 for closing costs
• Qualifications: Must live in an eligible location and earn up to 80% to 120% of the area’s median income

The Wells Fargo $10,000 Homebuyer Access grant is only available in select areas, but you can combine it with other assistance programs for maximum benefits. The same is true of the Dream. Plan. Home $5,000 grant. This program also has the benefit of as low as a 3% down payment, which can greatly reduce your upfront costs.

8. Citi Grant Programs

• Grant amount: Up to $7,500 for closing costs
• Qualifications: Live in an eligible area, use the home as your primary residence, earn less than 120% of the median family income for the area and complete a qualified home-buying class from a Citi-approved housing agency

Citi lets you apply your closing costs credit to any type of mortgage loan, whether it’s an FHA, conventional or USDA loan. The list of eligible areas is limited to Citibank Assessment Areas and also specific census tracts in Atlanta, Austin, Cambridge, Dallas, Denver, Houston and Philadelphia metropolitan statistical areas. You also can’t use any other Citi promotion with this offer.

9. State-Managed First-Time Homebuyer Grants

• Grant amount: Varies
• Qualifications: Varies

Individual states are a huge resource for first-time homebuyers looking for grants. Each state has different offerings, so your best bet is to consult with local resources. You’ll likely be able to find programs to help with closing costs, down payments and more.

How Do I Get a First-Time Homebuyer Grant?

First-time home buyer grant qualifications vary depending on the program. Typically, you need to live in a specific metropolitan statistical area—the grant guidelines will specify exactly where those locations are. Also, you might need to earn less than 80% to 120% of an area’s median family income to qualify for a grant.

Another common requirement is that the home be your primary residence—you can’t buy it to use as a rental property or investment. Finally, some programs require you to take a homeownership class to ensure that you understand the responsibilities of buying a home.

How to Apply for a First-Time Homebuyer Grant Program

If you’re ready to apply for a first-time homebuyer grant, here’s what the process might look like.

• Find a program you’re eligible for. The programs we’ve listed here are a good start, but you should also consider state and local resources.
• Gather personal information. Every application is different, but you’ll likely need to provide proof of income, your credit report, your Social Security number and proof that you’re a first-time homebuyer.
• Take any required homebuyer education courses. These may vary by program, but they all typically cover the home-buying process.
• Get mortgage preapproval. You will need this to qualify for the grant, as you can’t get a grant without a mortgage. See our list of the best mortgages for first-time homebuyers if you’re unsure where to start.
• Submit the grant application. After submission, you may need to wait a few weeks or even months for approval. If you’re accepted, the funds are usually dispersed directly to your lender.