First-Time Homebuyer Grants: No Federal Grant Exists. Here Is What Does.

Last verified: 2026-09-23

Type this phrase into a search engine and the first page will tell you about a $15,000 federal tax credit and a $25,000 federal grant. Both are bills that were introduced in 2025 and have not been passed. What does exist is a set of federal loan programs that cut the down payment to 3.5% or zero, one HUD program that halves the price of a house, and state programs that put real money toward a down payment. This page is those, with the 2026 numbers from the agencies that set them.

The federal grant that does not exist

Two bills carry the promises. H.R. 4717, the First-Time Homebuyer Tax Credit Act of 2025, introduced July 23, 2025, would create a refundable credit of 10% of the purchase price up to $15,000. S. 967, the Downpayment Toward Equity Act of 2025, introduced March 11, 2025, would fund down payment grants for first-generation buyers. On the government's own bill archive each exists only in its introduced version; neither has passed the House or the Senate. The tax law signed July 4, 2025 contains no homebuyer credit, and the IRS list of that law's provisions does not mention housing. The federal credit that people remember from 2008 to 2010 ended then. Until a bill becomes law, the federal contribution to a first home is a cheaper loan, not a check.

The federal loans that lower the down payment

Loan	Down payment	Key 2026 numbers	Who
FHA	3.5% (score 580+), 10% (500 to 579)	Limits $541,287 to $1,249,125 for one unit; upfront insurance 1.75%, annual 0.50% to 0.55% on most 30-year loans	Anyone who qualifies; not limited to first-time buyers
VA	0%	No loan limit with full entitlement; funding fee 2.15% first use, 3.3% after, waived for veterans receiving disability compensation	Eligible veterans, servicemembers, surviving spouses
USDA Section 502 Direct	Usually none	5.250% rate from September 1, 2026, reducible to as low as 1% with payment assistance; 33-year term, 38 for very low income	Low-income buyers in eligible rural areas, through the local Rural Development office
USDA Section 502 Guaranteed	None	Upfront fee 1%, annual fee 0.35%; income up to 115% of area median	Moderate-income buyers in eligible rural areas, through a lender
HUD Section 184	2.25% (1.25% under $50,000)	1% upfront guarantee fee; no annual fee since July 1, 2023; manual underwriting, not credit-score priced	American Indian and Alaska Native buyers, on or off tribal land
VA Native American Direct Loan	None in most cases	2.5% fixed rate as posted; no mortgage insurance	Native American veterans buying on federal trust land, with a tribal MOU

Two corrections to what most pages say. FHA's annual insurance rates were last changed in March 2023 and no 2025 or 2026 mortgagee letter has changed them since; the tiers are 0.50% to 0.55% for base loans up to $726,200 on a 30-year term. And Section 184's fees are 1% upfront with no annual fee, not the 1.5% and 0.25% still quoted in older guides; HUD dropped the annual fee for loans closed on or after July 1, 2023.

Good Neighbor Next Door: half price, $100 down

HUD's Good Neighbor Next Door program sells HUD-owned homes in designated revitalization areas at a 50% discount from list price to law enforcement officers, teachers from pre-kindergarten through grade 12, firefighters and emergency medical technicians. You commit to living in the house for 36 months; the discount is secured by a silent second mortgage with no interest or payments, which is released when the term ends. With FHA financing the down payment is $100 and closing costs can be financed. When more than one eligible buyer bids, HUD holds a lottery. The older, general "$100 down" program for any HUD-owned home ran under a 2011 mortgagee letter that HUD superseded in 2015; we found no current HUD page describing it, so the $100 figure is confirmed only inside Good Neighbor Next Door.

Where the real down payment money is: the states

Down payment assistance is a state and local product. It is almost never cash. The typical structure, as the Consumer Financial Protection Bureau describes it, is a second mortgage from a state housing finance agency or nonprofit that is deferred (no payments until you sell or refinance), forgivable (written off after a set number of years), or a combination, paired with a first mortgage from the same agency. Some programs are true grants. Five current examples, each from the agency's own page:

Program	Amount	Structure
Florida Hometown Heroes	Up to 5% of the first mortgage, $10,000 minimum to $35,000 maximum	0% deferred second mortgage, repaid on sale, refinance or move-out; for full-time employees of Florida employers, servicemembers and veterans
Texas TSAHC	Up to 5% of the loan amount	A grant, a second lien forgiven after three years, or a repayable second lien, depending on the option
Georgia Dream (from July 8, 2026)	5% of price up to $10,000; 6% up to $12,500 for the PEN and Choice tiers	Second mortgage; first-time buyers or three years without owning
New York SONYMA DPAL	3% of price up to $15,000, or $3,000, whichever is greater	0% interest, forgiven after ten years; first mortgage rate 0.40% higher
California CalHFA MyHome	Up to 3.5% of price (FHA) or 3% (conventional)	Deferred-payment junior loan; first-time buyers

Two more sources most buyers never hear of. The Federal Home Loan Banks run homebuyer set-aside programs through member lenders: FHLB Dallas's HELP pays $25,000 per household in Texas and New Mexico and $20,000 in Arkansas, Louisiana and Mississippi to first-time buyers at or below 80% of area median income, with $17 million allocated for 2026; FHLBank Atlanta's products pay up to $17,500 for first-time buyers and $20,000 for police, teachers, health workers, firefighters and veterans. And a Mortgage Credit Certificate from a state or local agency turns part of your mortgage interest into a federal tax credit, claimed on IRS Form 8396, capped at $2,000 a year when the certificate rate is above 20%. HUD's state pages, at hud.gov/states, are the directory for all of this.

Two things that are not grants but change the math

Housing Choice Voucher holders may be able to use the voucher toward a mortgage instead of rent, through the HCV Homeownership option, which pays part of the monthly housing cost. It is limited to first-time owners who complete counseling, and each public housing agency decides whether to offer it at all. And every state program above assumes you have already been through a HUD-approved housing counseling agency. Foreclosure, eviction and homelessness counseling is always free by HUD rule; pre-purchase counseling may carry a small fee that the agency must waive if you cannot pay. The locator is at HUD's site or 800-569-4287, and most assistance programs want the certificate before they will look at an application.

The scam filter for homebuyers

The FTC's rule for grants applies unchanged: the government does not contact you first, never charges you to receive a grant, and never asks for gift cards, wire transfers or crypto. HUD adds the housing-specific tells: being asked to pay a fee to apply, to sign over a title, to redirect mortgage payments, or to stop paying your loan. A down payment program that wants money before you have a written offer from a real agency is the scam, not the program. Report to HUD's inspector general at 800-347-3735 or ReportFraud.ftc.gov. Repairs to a home you already own are a different program and a different page: home repair grants.

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Sources

Common questions

Is there a federal first-time homebuyer grant in 2026?

No. The First-Time Homebuyer Tax Credit Act of 2025 (a $15,000 credit, H.R. 4717) and the Downpayment Toward Equity Act (S. 967) were both introduced in 2025 and had not passed either chamber at our last check. The July 2025 tax law contains no homebuyer credit; the IRS's own list of its provisions does not mention one. The 2008-2010 credit is long gone. Anyone advertising a federal homebuyer grant is describing a bill or a scam.

What is the lowest down payment I can actually make?

Zero, with a VA loan (eligible veterans and servicemembers) or a USDA Section 502 loan (eligible rural areas, income limits). FHA requires 3.5% with a credit score of 580 or higher and 10% at 500 to 579. HUD's Good Neighbor Next Door sells listed homes to teachers, police, firefighters and EMTs at 50% off with a $100 down payment on FHA financing.

Where does real down payment assistance come from?

State housing finance agencies and some cities and nonprofits, almost always as a second mortgage that is deferred, forgivable or both, rather than as cash. Examples with current figures: Florida Hometown Heroes up to $35,000, FHLB Dallas HELP $25,000 in Texas and New Mexico, Georgia Dream up to $12,500, New York SONYMA DPAL up to $15,000 forgiven after ten years, CalHFA MyHome 3.5% of the price. HUD's state pages list them.

What are the 2026 FHA loan limits?

For case numbers assigned on or after January 1, 2026, the one-unit floor is $541,287 and the ceiling in high-cost areas is $1,249,125; Alaska, Hawaii, Guam and the Virgin Islands go to $1,873,625. The 2026 conforming limit for conventional loans is $832,750. VA loans have no limit for borrowers with full entitlement.

Do I have to pay for homebuyer counseling?

Foreclosure, eviction and homelessness counseling from HUD-approved agencies is always free. Pre-purchase counseling and workshops may carry a nominal fee, and HUD requires the agency to waive it if you cannot afford it. Find an agency at HUD's locator or 800-569-4287. Many state assistance programs require a counseling certificate, so this is usually step one.

Gov-Grants.org is an independent guide, not a carrier and not a government agency. We never charge fees, and every fact above links to its source with the date we checked it. Program details change; confirm on the official site before applying.