First-time home buyer programs by state: how HFA loans, assistance and tax credits work in all 50 states

Updated September 28, 20264 min readBy Clément Lacaille, Tech-BharatHow we research

Two-story blue house with a for-sale sign in the front yard — Photo: Infrogmation of New Orleans, CC BY-SA 4.0 (credit)

There is no federal first-time buyer program. There are fifty state ones — plus hundreds of city and county funds — and they share a structure. Learn the structure and the state pages below become easy to read.

Who runs them

Each state has a housing finance agency (HFA) — the Texas Department of Housing and Community Affairs, CalHFA, Florida Housing, the New York State Homes and Community Renewal agency and so on — funded by tax-exempt bonds and federal programs. The HFA does not usually lend directly: it approves participating lenders who originate the loans under the HFA’s rules, then buys or insures them. You apply through a participating lender, not at the agency.

The three building blocks

The first mortgage: an FHA, VA, USDA or conventional (HomeReady/Home Possible/HFA Preferred) loan, sometimes at a rate below the market because bond funds subsidize it, often at a market rate in exchange for the assistance that comes with it.
Down payment and closing cost assistance, typically 3% to 5% of the loan, in one of four forms: a grant (never repaid), a forgivable second loan (forgiven after a set number of years of occupancy), a deferred second loan (0% interest, repaid when you sell or refinance), or an amortizing second loan (small monthly payment).
Mortgage credit certificate (MCC): a federal income tax credit of 10% to 50% of the interest you pay each year (capped at $2,000 a year when the rate exceeds 20%), for as long as you keep the loan and live in the home; lenders can count it as income to qualify. Not every state issues MCCs every year.

The common conditions

First-time buyer means no ownership interest in a principal residence in the last three years (with exceptions for targeted areas, veterans and displaced homemakers) — see am I still a first-time buyer?. Many states also run repeat-buyer versions.
Income limits and purchase price limits set by county and household size, higher in federally designated targeted areas.
Homebuyer education, usually an approved online or in-person course before closing.
Minimum credit score set by the program, commonly 620 to 660.
Owner occupancy, with recapture or repayment if you sell early under some assistance types.

How to use the state pages

Each page below names the state agency and its current programs, describes the assistance type and amount, says whether the state issues MCCs, gives the income and price limit framework, and works a purchase on the state’s median price: down payment, transfer taxes, closing costs and monthly payment. Programs change with funding; treat every figure as “verify with the agency” and check the agency site or a participating lender for today’s terms.

Beyond the state

Cities and counties layer their own assistance — often larger, often restricted to specific neighborhoods, incomes or occupations — on top of the state first mortgage. Employers, credit unions and some large banks offer grants of their own. Ask any participating lender which programs stack; most HFAs publish the combinations they allow.

Frequently asked questions

Do first-time buyer programs give you money?

Some do — grants and forgivable seconds are money you keep if you stay long enough. Deferred seconds are interest-free loans repaid at sale. The first mortgage itself is a normal loan with normal payments.

Can I combine a state program with an FHA loan?

Usually that is the design: the HFA’s first mortgage is often an FHA loan, with the state assistance covering the 3.5% down payment and part of the closing costs.

What is the income limit for first-time buyer programs?

It varies by state, county and household size, commonly between 80% and 140% of the area median income, with higher limits in targeted areas. Some states set a single statewide figure; most publish county tables.

Do I have to pay the assistance back?

Depends on the type. Grants: no. Forgivable seconds: no, if you stay the required years. Deferred seconds: yes, at sale or refinance, usually without interest. Amortizing seconds: yes, monthly.

How do I apply for a state program?

Through a lender on the agency’s participating-lender list. The lender submits your file to the HFA for reservation of funds and assistance; the agency does not take applications from the public.

Do income limits count my spouse if they are not on the loan?

Often yes. Underwriting looks only at borrowers, but many state agency and bond programs measure the income of all adults who will occupy the home, married or not. Leaving a spouse off the loan lowers the qualifying income without necessarily lowering the compliance income — ask before you structure the application that way.

Is the limit based on gross pay or take-home pay?

Gross, before taxes and deductions. Agencies typically add overtime, bonus, commission and self-employment profit, and some count documented recurring income such as child support or benefits.

First-time home buyer programs in each state

Agency, programs, assistance type, MCC availability and limits, in the first-time buyer section of each state’s mortgage-law page.

Sources

More first-time buyer guides

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