The Federal Government Does Not Give You Money to Buy a House
This is the most important sentence in this guide. The federal government does not offer direct grants to individuals for home purchases. If someone contacts you claiming you have been selected for a government housing grant, that is a scam. What the federal government does offer are loan programs with favorable terms that reduce the amount you need upfront: **FHA Loans** are mortgages insured by the Federal Housing Administration. You can put as little as 3.5% down with a credit score of 580 or higher (10% down with scores 500-579). This is a loan, not a grant. You pay it back with interest plus mandatory mortgage insurance. **VA Loans** are genuinely zero dollars down for eligible veterans, active-duty service members, and surviving spouses. No private mortgage insurance required. This is the single best home financing option available to anyone in the United States. It is still a loan, but the terms are exceptional. See our veteran funding guide for details. **USDA Rural Development Loans** offer zero down payment for properties in eligible rural and suburban areas. Household income must be at or below $119,850 for 1-4 person households (varies by county). Credit score minimum is typically 640. **HUD Good Neighbor Next Door** is the closest thing to a federal housing grant. HUD sells foreclosed properties at a genuine 50% discount to law enforcement officers, K-12 teachers, firefighters, and EMTs. You must live in the home for at least 36 months. Availability is limited to specific HUD-owned properties in designated revitalization areas. The actual down payment assistance money comes from state housing finance agencies, local governments, and private programs, not from the federal government.
Three Types of Assistance (Only One Is Free)
Down payment assistance programs fall into three categories. The differences matter enormously. **True grants** do not need to be repaid, ever, under any circumstances. These are genuinely free money. They are also the rarest form of assistance. Examples: Bank of America's Down Payment Grant (up to $10,000 in select markets), some TSAHC programs in Texas. **Forgivable loans** are structured as second mortgages that are forgiven after a set period, typically 3 to 15 years, as long as you continue living in the home. If you sell, refinance, or move out before the forgiveness period ends, you repay some or all of the assistance. Examples: NYC HomeFirst (forgiven after 10-15 years), SONYMA DPAL (forgiven after 10 years), Chenoa Fund (forgiven after 36-120 on-time payments). **Deferred loans and shared appreciation loans** are the most common and the most misunderstood. A deferred loan has no monthly payments but must be repaid when you sell, refinance, or move. A shared appreciation loan requires you to repay the down payment plus a proportionate share of your home's appreciation. If your home doubles in value, your repayment doubles too. Example: California's Dream For All program. When evaluating any assistance program, the first question is: which type is this? If the program documentation does not clearly state whether the assistance is a grant, forgivable loan, or deferred loan, that is a red flag.
🔍 Search related opportunities now
Major State Programs: The Details That Matter
Most down payment assistance flows through state Housing Finance Agencies. Here are the largest programs with specific terms. **California: Dream For All** Assistance: Up to 20% of the purchase price. Type: shared appreciation loan. When you sell, you repay the down payment plus a proportionate share of the home's appreciation. The 2025-26 state budget allocated $300 million. Application window: February 24 to March 16, 2026, with selection by lottery (not first-come-first-served, after the 2023 launch ran out in 11 days). Eligibility: first-generation homebuyers (parents did not own a home during your lifetime, or you were in foster care). Be clear-eyed about the cost: if your home appreciates 40%, you owe back 40% more than you borrowed. **New York: HomeFirst (NYC only)** Assistance: Up to $100,000 toward down payment or closing costs. Type: forgivable loan. Forgiven after 10 years (if $40,000 or less) or 15 years (if more than $40,000). You must contribute at least 3% from your own funds. Properties in the five boroughs only. Administered by NYC HPD. The $100,000 maximum is unusually high for a forgivable DPA program. **New York (statewide): SONYMA DPAL** Assistance: Up to 3% of purchase price (max $15,000) through standard DPAL, or up to $30,000 through DPAL Plus (for incomes below 80% AMI). Type: forgivable loan at 0% interest, forgiven after 10 years. Must pair with a SONYMA first mortgage. **Texas: TSAHC** Assistance: Up to 5% of the loan amount. Type: available as either a true grant (no repayment ever) or a forgivable second lien (forgiven after 3 years if you do not sell or refinance). Credit score minimum 620. Programs include Home Sweet Texas and Homes for Texas Heroes (teachers, police, firefighters, EMS, corrections, veterans). **Florida: Hometown Heroes** Assistance: 5% of the total loan amount, minimum $10,000, capped at $35,000. Type: 30-year deferred second mortgage at 0% interest with no monthly payments. Repaid only if you sell, refinance, or move out before 30 years. Income limit: household income below 150% of AMI (caps range from $142,950 to $195,450 by county). Credit score minimum 640. Must be employed full-time. Warning: funding is limited by the state legislature and can be suspended mid-year when funds run out.
National Programs Available in Multiple States
Several programs operate across state lines and are accessible through participating lenders. **Bank of America Down Payment Grant:** Up to $10,000 (3% of purchase price). True grant, never repaid. Select markets only. Also offers America's Home Grant of up to $7,500 for closing costs. Both are genuinely free money but limited to areas where Bank of America offers the program. Can be combined with low-down-payment mortgages. **Chenoa Fund:** 3.5% to 5% of the purchase price. The 3.5% option is forgivable after 36 consecutive on-time payments. The 5% option is forgivable after 120 on-time payments (10 years). Also available as a repayable 10-year second mortgage at 1% above your first mortgage rate. Credit score minimum 600. No income limits. No first-time buyer requirement. Available in all states except New York. Pairs with FHA loans. **National Homebuyers Fund (NHF):** Up to 5% of the loan amount (for example, $17,500 on a $350,000 mortgage). Available as either a true grant or a 0% interest forgivable second mortgage forgiven after 3 years. Credit score minimum 640. No first-time buyer requirement. Works with conventional, FHA, VA, and USDA loans. Must use a participating lender. The following two programs are not down payment assistance, but they come up often in DPA searches because they reduce or eliminate the need for a down payment. **NACA (Neighborhood Assistance Corporation of America):** Not a grant or DPA. This is a unique mortgage program with no down payment, no closing costs, no PMI, no fees, and below-market rates (6.125% for 30-year as of early 2026; rates change periodically). No credit score requirement. The trade-off is significant: mandatory workshops and counseling, 3-6 months of payment-shock savings demonstration, 5 community activism activities per year, primary residence only for the life of the mortgage. Legitimately good terms for those willing to invest the time. **Habitat for Humanity:** Also not DPA or a grant. Habitat provides an affordable mortgage with payments capped at 30% of household income. Income must be below 60% of AMI. Requires sweat equity (labor hours building your home or other Habitat homes) and financial education classes. Each local affiliate runs its own program.
Eligibility: The Numbers You Need
Down payment assistance programs share common eligibility patterns, though specifics vary. **Income limits** typically range from 80% to 150% of Area Median Income. This means different dollar amounts in different locations: 80% AMI in San Francisco exceeds $100,000, while 80% AMI in a rural county might be $40,000. Some programs like Chenoa Fund and NHF have no income limits. **Credit scores** by program: | Program | Minimum Score | |---|---| | NACA | None | | Chenoa Fund | 600 | | TSAHC (Texas) | 620 | | NHF | 640 | | Florida Hometown Heroes | 640 | | USDA loans | 640 | | FHA loans | 580 (3.5% down) or 500 (10% down) | | VA loans | No official minimum (lenders want 620+) | **First-time buyer requirement:** Most programs require it, but the federal definition is broader than people think. You qualify as a first-time homebuyer if you have not owned a home in the past 3 years. If you sold a home 4 years ago, you qualify again. Several major programs (Chenoa Fund, NHF, some TSAHC options) have no first-time buyer requirement at all. **Homebuyer education:** Almost all DPA programs require completing a HUD-approved homebuyer education course (4-8 hours, available online or in person) before receiving assistance. The Down Payment Resource database tracks over 2,600 DPA programs nationwide. Of those, 63% (1,639) are open to first-time buyers, and 53% (1,035) offer partial or full forgiveness. The average benefit is approximately $17,000-$18,000.
Scams, Misleading Programs, and Bills That Have Not Passed
The intersection of housing and government money attracts fraud. Here is what to watch for. **Government grant scams:** The FTC and Grants.gov both warn about these. Red flags include unsolicited contact saying you were selected for a housing grant (the government does not do this), requests for upfront fees to receive a grant (legitimate programs never charge fees), payment via wire transfer or gift cards, urgency tactics, and communication from non-.gov email addresses. In 2026, scammers are using AI-generated voices and fake government branding to appear more legitimate. **The Downpayment Toward Equity Act:** This bill has been reintroduced in every session of Congress since it was first proposed. Most recently reintroduced in March 2025 as S.967 and H.R.4069. It would provide up to $20,000 for first-generation homebuyers ($25,000 for socially disadvantaged buyers) for down payments and closing costs. **It has not passed. It is not law. You cannot apply for it.** Anyone claiming you can access Downpayment Toward Equity Act funds is either misinformed or scamming you. **Shared appreciation loans marketed as free money:** Programs like California's Dream For All are genuinely helpful, but calling them "free" is misleading. If your home appreciates 50% and you received 20% of the purchase price in assistance, you repay the 20% plus 50% of that amount. On a $500,000 home, that turns $100,000 in assistance into $150,000 owed. **Programs that require specific high-rate lenders:** Some assistance programs steer you to lenders who charge above-market interest rates on the primary mortgage. The DPA saves you money upfront but costs more over the life of the loan. Always compare the total cost of the mortgage-plus-DPA package against a conventional mortgage with a larger down payment. **Fee-based assistance services:** Legitimate DPA programs do not charge application fees. If someone charges you to help access down payment assistance, be skeptical. HUD-approved housing counseling is available free of charge through the HUD Counseling Agency directory.
How to Find Programs You Qualify For
There are more than 2,600 DPA programs in the US as of late 2025, a 6% increase from the prior year. Finding the right one requires knowing where to look. **Step 1: Check your state Housing Finance Agency.** Every state has one. They administer the largest programs and can tell you which local programs exist. Search for "[your state] housing finance agency down payment assistance." **Step 2: Ask your lender.** Participating lenders are the access point for national programs like Chenoa Fund and NHF. Not all lenders participate in all programs. Ask specifically: "What DPA programs do you offer?" If they say none, try a different lender. **Step 3: Check your city and county.** Many cities and counties run their own DPA programs separate from state programs. These are often the least well-known and therefore least competitive. **Step 4: Check Down Payment Resource (downpaymentresource.com).** This is the most comprehensive database of DPA programs in the US. Enter your location and it shows which programs are available in your area. **Step 5: Verify everything independently.** Confirm program details directly with the administering agency. Terms change, funding runs out, and eligibility requirements shift. Do not rely on third-party summaries (including this one) as your final source. Nearly half of prospective homebuyers struggling with down payments have not explored available DPA programs. The programs exist. The challenge is finding them and understanding the terms. If you are also looking for help with home repairs or energy efficiency upgrades on a home you already own, see our home repair and weatherization guide.