First-time home buyer grants: what is real and what is a scam

First time home buyer grants are usually down payment help from a state housing agency, a city or a nonprofit: money toward the part of the price you pay yourself. It is paid at closing, the day you sign the final papers and the home becomes yours. Some are true grants you never repay. Many are loans, forgiven if you stay in the home long enough or repaid when you sell.

A free government grant offer that reaches you out of the blue is a scam. So for any real offer, ask one question first: will I ever have to pay this back?

Is there free federal grant money for first-time buyers?

No federal program gives grants straight to home buyers. The Federal Trade Commission (FTC) says the government won't contact you out of the blue about grants. Real government grants require an application and are always for a specific purpose. The government's free, official list of federal grants is its grants search site.

The real help comes from closer to home. The Consumer Financial Protection Bureau, a federal agency, says many states and local organizations help first-time buyers with a down payment or closing costs. The U.S. Department of Housing and Urban Development (HUD), the federal housing department, points buyers to programs in their state and to approved housing counselors.

What does "grant" usually mean?

"Grant" can mean five different kinds of help, so ask which one you are offered. Forgiven means you no longer owe the money. To refinance means to replace your mortgage with a new one.

Some states offer more than one kind. Texas's state housing agency is the Texas Department of Housing and Community Affairs (TDHCA). It offers a second loan of up to 5% of the mortgage at no interest, in two versions: one repaid when you sell and one forgiven after three years. North Carolina's down payment loan is forgiven a little each year from year 11 to year 15.

A worked example. You buy a $200,000 home in Ohio with a conventional loan, so Ohio's 3% help is $6,000. If you sell in year four, you repay the full $6,000. If you stay past seven years, you owe nothing.

Our state guides give each program's rules: Colorado, Michigan, North Carolina, Ohio, Texas and Washington.

Who gives down payment help?

Down payment help comes from three kinds of groups:

• State housing finance agencies. Every state has one, such as the Colorado Housing and Finance Authority or the Ohio Housing Finance Agency. You apply through a lender on the agency's list.
• Cities and counties. Detroit's down payment grant is in the table above. Philadelphia's Philly First Home grant pays up to $10,000 or 6% of the price, whichever is lower. To get it, you finish one-on-one counseling at a city-funded agency before you sign the contract to buy.
• Nonprofits and land trusts. Some nonprofits sell homes below market price instead of giving cash. A community land trust owns the land under the home, which keeps the price lower for you and for the next buyer.

How do you find real programs?

1. Start with your state housing agency. Our state guides name it, and HUD's state pages list approved counselors near you.
2. Talk to a HUD-approved housing counselor, for free or a small fee. Find one with the Consumer Financial Protection Bureau's counselor search or HUD's counselor finder. You can also call the HOPE Hotline, a free housing counseling phone line, at (888) 995-4673, any time of day or night.
3. Ask your city or county housing department about local programs.
4. Look at lower-priced homes near you. Our guide to affordable homes for sale explains land trust and below-market homes. See homes for sale and open housing lotteries, and use the qualify check to see which fit your income.

How do you spot a fake grant offer?

• It finds you. The FTC says the government won't call, text, email or message you about a grant.
• It asks for a fee. Never pay a fee up front or pay for a list of grants. No government agency asks for payment by gift card, cash reload card, wire transfer or cryptocurrency.
• The agency doesn't exist. The FTC gives "Federal Grants Administration" as an example of a made-up name.
• It wants your Social Security or bank account number before you have spoken with a lender or counselor you found yourself.
• It asks for your phone number before it names any program. Leave the page, and look up your state housing agency yourself instead.

If you paid a scammer, call the company you used to pay, such as your bank or a gift card company, right away and ask it to reverse the payment. Then report the scam at the FTC's fraud reporting site. Our guide to fees and scams lists more warning signs.

What should you get ready?

• Your income. Most programs have an income limit, the most your household can earn and still qualify, often set by county. For example, Texas's TDHCA limits that took effect July 13, 2026 start at $101,500 for one or two people in most of the state.
• Your credit. State programs set a minimum credit score: for example, 620 for Colorado's and Texas's state agencies, and 640 for North Carolina's.
• Your papers. Ohio's agency, for example, asks for a Social Security number and three years of tax returns and W-2 forms, the yearly wage forms from your employer. It also asks for 30 days of pay stubs and 30 days of bank statements.
• A homebuyer class. Michigan's, Ohio's and Texas's state programs, for example, require one before you buy. Our guide to the homebuyer education class explains how to find one that counts.
• A mortgage. Our guide to FHA loan requirements covers loans insured by the Federal Housing Administration (FHA). Our guide to USDA home loan requirements covers rural loans backed by the U.S. Department of Agriculture (USDA).