Assistance

First-time buyer programs: what's out there

Educational guide · Updated 2026

"First-time buyer" programs are widely underused, partly because many buyers assume they won't qualify. In reality, "first-time" is often defined as not having owned a home in the past three years — not literally never — and income limits are frequently higher than people expect.

What the numbers can look like

A first-time buyer in New Jersey earning $65,000/year on a $320,000 home might qualify for an NJHMFA down payment assistance loan of up to $15,000 at 0% interest. Combined with a 3% conventional loan, their out-of-pocket down payment could drop from $9,600 to near zero — with closing costs still to cover separately.

Down payment assistance

State housing finance agencies and many local governments offer down payment and closing cost assistance, often as grants or low-interest second loans. Some are forgivable if you stay in the home for a set number of years. These vary enormously by location, so your state's housing finance agency website is the place to start.

Loan programs with low down payments

Beyond assistance money, several loan types are friendly to first-time buyers: FHA loans (3.5% down, flexible credit), conventional programs like HomeReady and Home Possible (as low as 3% down with income limits), and for eligible buyers, VA loans (0% down for veterans) and USDA loans (0% down in eligible rural areas).

Homebuyer education

Many assistance programs require a homebuyer education course. The good news: free, HUD-approved options exist, including Fannie Mae's HomeView and Freddie Mac's CreditSmart. Confirm which course your specific program accepts before starting one.

How to find what you qualify for

Start with your state housing finance agency, check your city or county housing department, and ask a local agent or lender which programs recent buyers in your area have actually used. Programs change often, so always confirm current details directly with the administering agency.

Frequently asked questions

Do I have to repay down payment assistance?

It depends on the program. Some are grants (never repaid). Others are silent second mortgages that are forgiven after a set period. Some are loans at low or 0% interest. Read the program terms carefully.

What counts as 'first-time buyer' for these programs?

Most programs define first-time buyer as someone who hasn't owned a home in the past 3 years — not necessarily someone who has never owned.

Where do I find programs in my state?

The HUD website lists approved housing counseling agencies who can identify programs in your area. Your state's housing finance agency website is also a good starting point.

This article is educational and general in nature. Specifics vary by lender, loan program, and location. Confirm details with a licensed professional.