Best Grants for First-Time Home Buyers (2025)

Best Grants for First-Time Home Buyers

Buying your first home is an exciting milestone, but it can also be financially challenging. Thankfully, there are grants and programs designed specifically for first-time home buyers to help make the process more affordable. These grants can cover down payments, closing costs, or even reduce your overall loan amount, making homeownership more accessible.

What Are Home Buyer Grants?

Home buyer grants are funds provided by government agencies, nonprofit organizations, or financial institutions to assist first-time home buyers. Unlike loans, these grants typically do not need to be repaid, making them an excellent resource for those looking to ease the financial burden of buying a home.

Top Grants and Programs for First-Time Home Buyers

1. Federal Housing Administration (FHA) Down Payment Assistance Programs

What It Offers: The FHA provides assistance through partnerships with local and state programs that offer grants or second mortgages to cover down payments and closing costs.
Why It’s Great: FHA loans already have low down payment requirements, and combining them with grants can significantly reduce upfront costs.
Best For: Buyers with low-to-moderate incomes who need help with initial costs.

2. Good Neighbor Next Door Program

What It Offers: Sponsored by the U.S. Department of Housing and Urban Development (HUD), this program offers a 50% discount on home prices for law enforcement officers, teachers, firefighters, and emergency medical technicians purchasing homes in revitalization areas.
Why It’s Great: It combines affordability with an incentive to live in areas needing revitalization.
Best For: Public servants looking for affordable housing options.

3. State and Local Home Buyer Assistance Programs

What It Offers: Many states and municipalities offer grants or forgivable loans for first-time buyers. Programs vary by location and often target specific demographics or income levels.
Why It’s Great: These programs are tailored to local housing markets and often include education or counseling resources.
Best For: Buyers willing to explore regional opportunities to maximize savings.

4. National Homebuyers Fund (NHF)

What It Offers: Provides down payment assistance of up to 5% of the loan amount, available to first-time and repeat buyers.
Why It’s Great: No repayment is required if you stay in the home for a set number of years.
Best For: Buyers with limited savings for a down payment.

5. Chenoa Fund

What It Offers: A nationwide program offering down payment assistance as a second mortgage, which may be forgivable depending on the borrower’s circumstances.
Why It’s Great: Works with FHA loans and offers flexibility in repayment terms.
Best For: Buyers who need a boost to meet FHA down payment requirements.

6. Bank of America Community Homeownership Commitment®

What It Offers: Up to $10,000 in down payment grants and up to $7,500 in closing cost assistance for eligible buyers.
Why It’s Great: No repayment required, and it can be combined with other assistance programs.
Best For: Buyers in Bank of America’s service areas looking for substantial financial support.

7. Native American Direct Loan (NADL) Program

What It Offers: Provides direct loans for Native American veterans to buy, build, or improve homes on federal trust land.
Why It’s Great: No down payment, no private mortgage insurance (PMI), and lower closing costs.
Best For: Native American veterans eligible for VA home loans.

8. Fannie Mae HomePath Ready Buyer Program

What It Offers: Offers up to 3% of the home purchase price in closing cost assistance for buyers of foreclosed properties.
Why It’s Great: Combines affordability with homeownership education for first-time buyers.
Best For: Buyers willing to purchase and renovate foreclosed properties.

Tips for Accessing First-Time Home Buyer Grants

Research Local Programs: Check with your state housing authority or local government for grants tailored to your area.
Meet Eligibility Requirements: Most grants have specific income, credit score, or location criteria, so ensure you qualify before applying.
Take a Homeownership Class: Many programs require first-time buyers to complete an educational course to qualify for assistance.
Work with a Lender Familiar with Grants: Choose a lender experienced in working with home buyer assistance programs to maximize your benefits.
Combine Grants: Many grants can be layered to cover more of your home-buying expenses.

Benefits of Using Grants for First-Time Buyers

Reduced Upfront Costs: Grants can help cover down payments and closing costs, making homeownership more accessible.
Lower Loan Amounts: By reducing initial costs, grants decrease the total amount you need to borrow.
Increased Affordability: Grants can make it easier to afford homes in competitive markets.
Improved Financial Security: Saving money upfront allows you to maintain a financial cushion for unexpected expenses after moving in.

Conclusion

For first-time home buyers, grants can make the dream of homeownership a reality by reducing upfront costs and making homes more affordable. From federal programs like FHA assistance to local initiatives and bank-sponsored grants, there are numerous options to explore. By researching available opportunities and meeting eligibility requirements, you can take advantage of these programs to secure your first home with greater financial confidence.