Buying
What First-Time Home Buyer Programs Are Available?
By David Golovin · September 16, 2026 · 3 min read
Several federal, state, and local programs reduce the upfront cost of buying a home. Most first-time buyers do not know all the options available to them.
| Program | Min. downpayment | Who it serves |
|---|---|---|
| FHA loan | 3.5% | Credit 580+, any location |
| VA loan | 0% | Veterans, active duty, surviving spouses |
| USDA loan | 0% | Rural and suburban areas |
| Downpayment assistance | Varies | State/local income-qualifying programs |
What counts as a first-time buyer
Most federal programs define first-time as not having owned a primary home in the past 3 years. Former homeowners who rented for a few years often still qualify.
Source: U.S. Department of Housing and Urban Development (HUD)
How to find state and local programs
Each state has its own housing finance agency with downpayment assistance, closing cost grants, and below-market rate programs. HUD maintains a directory of approved counselors who can match you to programs for your location and income.
Source: HUD-approved housing counselors
The assumable option
Some buyers skip the new-loan route entirely and assume a seller's existing mortgage. The downpayment on an assumption is the gap between the sale price and the remaining loan balance, but the rate comes with the loan: an estimated 2-4% VA or FHA rate instead of 7% can mean hundreds less per month. Roots shows assumable listings free, with estimated rate and downpayment for each.
FAQ
What counts as a first-time home buyer?
Most federal programs define a first-time buyer as someone who has not owned a primary residence in the past 3 years. That means previous homeowners can still qualify after a gap.
Do first-time buyer programs cover closing costs?
Some do. Many state DPA programs offer grants or forgivable second loans that cover both downpayment and closing costs. HUD-approved housing counselors can help identify what is available in your area.
Can I use downpayment assistance on a home with an assumable mortgage?
Generally no. When you assume a mortgage, the downpayment is the difference between the sale price and the remaining loan balance, and assistance programs are built for new loans, not existing ones. Buyers typically cover that gap with cash or separate financing.