Government Assistance Programs for First-time Home Buyers

Man researching mortgage assistance on home laptop

Available through state, county, and city governments, down payment assistance programs are a valuable resource for first-time home buyers seeking financial help. Many of these programs offer a home buyer grant to alleviate the burden of added debt. And, depending on the program, they may not even require repayment.

Down payment assistance programs open up opportunities for those who either haven’t had the ability or haven’t thought about saving up thousands of dollars for down payment. At American Financing, we see many people successfully utilize these programs—around 50 per month, on average. These programs truly support what American Financing is all about: helping people afford their dream home.

Who are government assistance programs for?

Anyone who has already been pre-approved for a mortgage can qualify for aid. While there is a maximum income restriction, the cap is often quite lenient, with requirements varying from state to state.

Where do I begin?

The Federal Housing Administration (FHA) and National Homebuyers Fund offer their own programs for home buyers. Yet, there are many other government assistance programs available locally in the county, city, and even zip code level. As such, it’s always worth checking to see the specific offerings available in your desired area. Local government officials often look to build up certain areas. So, extra incentives may exist based on neighborhood—with funds just waiting to be tapped by new buyers.

Making this process even easier, the U.S. Department of Housing and Urban Development (HUD) provides a list of local home buying programs available in each state. While some government assistance programs only apply to first-time home buyers—defined as someone who has not owned a home within the last three years—others are not limited to this demographic. And best of all, you can combine these programs. As an example, a county-based program might cover closing costs on top of the state’s down payment grant, providing an added source of financial aid.

Is there a catch?

It takes an effort to obtain government assistance. For instance, many states require qualifying candidates take an online home buyer’s education course. This may include a small, out-of-pocket fee of around $99.

Where can I find more information? Our first recommendation for those interested in finding specific sources of government help would be to use the Internet. It's rich with information and readily accessible at your fingertips! A quick web search makes it easy and painless to gain knowledge on the vast options available, like home buyer incentives and tax credits.

Take it a step further by contacting your state or county housing authority. Reach out to your local government office or city hall to track down the specific housing assistance department nearby. Engaging in face-to-face interaction will allow you to ask more detailed questions, receive more in-depth answers, overall equipping you with more comprehensive information.

Pre-qualify in 10 minutes

By submitting this form, I am providing express consent for American Financing to contact me, including through the use of an automated dialer, voice or text, at the number above, even if my telephone number is listed on any Do-Not-Call list. I understand that I do not have to consent to receive such calls or text messages in order to purchase goods or services from American Financing.

Key takeaway: avoid these common pitfalls

  • One of the biggest misconceptions that can hurt new home buyers is the belief they don’t need to bring money to closing. There are times when people think they’ll simply apply for a loan and be handed the keys without any other steps involved. Unfortunately, this is not the case. More often than not, you'll have to meet a requirement. So it is highly recommended that home buyers bring at least $1,000 to closing—and if possible, a bit extra to be safe. Access to saved money is essential when coming to the table. If the buyer is not aware of this fact, whoever assisted them failed to do their job.

  • It's important to remember that expenses continue even after you receive the keys. Buyers may get themselves into trouble when they neglect to consider the additional expenses that home ownership entails. This may include landscaping, window coverings, and necessary repairs they didn’t previously notice.

  • There is nothing more embarrassing than putting in an offer, then arriving at the mortgage company and finding out you don’t qualify after all. As a result, mortgage pre-approval is crucial. Don’t forget to stay within your price range and consider added expenses.

Above all, do your research. If the money is out there, the government wants you to find it. Taking the initiative to seek out the many opportunities available to you can make the difference between imagining your new residence and actually owning it. Saving for down payment can be a challenge, but you are most certainly not alone. Help is all around. If you take advantage of these resources, you’ll be calling the house of your dreams “home” in no time.