Best Grants for First-Time Homebuyers

National Homebuyers Fund has flexible requirements with generous awards

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Buying a home can be an exciting experience, but it’s also one that carries with it significant costs. Upfront expenses like closing costs, appraisals, home inspections, and origination fees can quickly add up, making it hard to bid on the home of your dreams. Grants for first-time homebuyers can help alleviate some of these costs.

Several organizations provide financial assistance to homebuyers, and finding the best grants for first-time homebuyers often means evaluating local, state, and federal programs. The best grant for you will depend on several factors, including your location, income, desired property, and profession.

Best Grants for First-Time Homebuyers of 2021

Best Overall : National Homebuyers Fund, Inc.

National Homebuyers Fund, Inc

National Homebuyers Fund, Inc

  • Grant Amount: Up to 5% of total mortgage 
  • No. of Qualifications: 3
  • Availability: Nationwide
Why We Chose It

The National Homebuyers Fund (NHF) gifts qualifying homebuyers with funds to assist with down payments, closing costs, and the total mortgage. We chose NHF as our best overall grant because of its flexible eligibility requirements and generous award funds, making it a great option for homebuyers of various backgrounds and financial means.

  • Funds available for up to 5% of mortgage total

  • Flexible FICO and debt-to-income ratio requirements

  • Available nationwide

  • Application and eligibility varies by state

  • A wider pool of eligible candidates

  • No online application portal


The National Homebuyers Fund, Inc., is a nonprofit organization established in 2002 to help increase and improve homeownership opportunities in communities across the nation. They offer resources and programs for homebuyers and homeowners, including down payment and/or closing cost assistance (DPA) earning our vote for best overall grant provider. 

Through the NHF DPA program, eligible homebuyers can qualify for assistance with closing costs and down payment as well as up to 5% of the total mortgage amount. These funds are available as a traditional grant or as a zero-interest-rate second mortgage that is forgiven after 36 months.

To be eligible for this grant, you must meet annual income limits as indicated by your lender. Though income and credit requirements are flexible, approved borrowers typically have a FICO score of 640 or higher with a debt-to-income (DTI) ratio of 45% or less. The award can be used in conjunction with various lending programs, including conventional, VA, FHA, and USDA mortgages. 

NHF resources vary from state to state. If you’re interested in applying for the NHF DPA grant, contact a participating mortgage lender or your real estate agent for additional details.

Best for Active Duty Military & Veterans : PenFed Dream Makers Grant

PenFed Foundation

PenFed Foundation

  • Grant Amount: Up to $5,000
  • No. of Qualifications: 6
  • Availability: Nationwide
Why We Chose It 

The PenFed Dream Makers Grant is the best homebuyers grant for veterans because it provides up to $5,000 in funds to be used by active military members and veterans to offset the down payment requirements for a single-family home, condo, or townhome.

  • Funds can be used for a down payment

  • Lender matches borrower contribution up to $5,000

  • Don’t need to be a PenFed Credit Union member

  • Must be able to put at least 3% down

  • Takes at least three weeks to process

  • Home must not exceed $575,000


The Pentagon Federal (PenFed) Credit Union was established in 1935 to meet the financial needs of the military community, and their PenFed Dream Makers Grant is an example of how they continue to do just that. This grant provides eligible applicants with up to $5,000 in funds that can be used toward closing costs. Active duty military members and veterans can qualify even if they aren’t members of PenFed, making it our best grant for the military community. 

Dream Makers Grant recipients can receive a two-to-one funding grant for up to $5,000 as long as they contribute a minimum of $500 toward their down payment. For instance, if an award winner contributes $2,500, PenFed will contribute an additional $5,000. 

Funds can be used on any first-time home purchase as long as the buyer has not owned a home in the last three years or lost a home due to a divorce or disaster. To qualify for this grant, you must be a member of the military or a veteran and have an income that does not exceed 80% of the median income in your area. 

The grant can be used to purchase a single-family home, condo, or townhouse that will be purchased through a 30-year, fixed-rate mortgage; conventional, FHA, VA, and USDA loans do qualify for this grant. In addition, you must be able to put 3% down, and the home price cannot exceed $575,000. 

You can apply for this loan at any PenFed credit union location or you can begin the process online, though you must register as a user on the PenFed website to start the process online. Approvals can take up to three weeks and are dependent on funding availability at the time of application submission. Applications are valid for up to 90 days after submission. If you do not purchase a home within 90 days, you can reapply.

Best for First Responders : Good Neighbor Next Door Program



  • Grant Amount: Up to 50% of home value 
  • No. of Qualifications: Varies based on lender
  • Availability: Nationwide
Why We Chose It

The Good Neighbor Next Door (GNND) program offers significant assistance to qualified first responders. Through this program, first-time homebuyers can purchase a property for 50% less than the market cost, making it one of the best programs for eligible buyers.

  • Up to 50% off home price

  • Eligibility extends to first responders

  • Nationwide availability

  • Must remain in the home for 36 months

  • Limited properties available


The Good Neighbor Next Door program can make homeownership substantially more affordable for qualifying first responders who want to purchase a home in designated revitalization areas. As such, this program is one of the best available for those who meet first responder qualifications. This mortgage program is made available through the U.S. Department of Housing and Urban Development and is designed to assist in the revitalization of urban areas across the U.S. 

The GNND program allows eligible buyers to purchase a home in an HUD-designated revitalization area for 50% less than the market cost. Upon approval, buyers must sign two mortgages. The first is the “traditional” mortgage for which they’ll be required to make regular payments in accordance with the loan agreement. The second mortgage, often referred to as a “silent” mortgage, is for the discounted amount. Borrowers will not be responsible for payments or interest on the second loan as long as they maintain the property as their primary residence for a minimum of 36 months. 

To be approved for the GNND program, you must purchase a qualifying home and maintain employment as a first responder, e.g., firefighters, police, and emergency medical technicians. You must also meet any lender-specific qualifications, which may include credit and income requirements. 

Though this program is managed by HUD, borrowers must apply for the GNND program with a participating lender, not directly through the HUD website. If you'd like to be considered for this grant, speak to your preferred lender about GNND eligibility and their specific application process.

Best for Underrepresented People : Chase Enhanced Homebuyer Grant

Chase Bank

Chase Bank

  • Grant Amount: Up to $5,000
  • No. of Qualifications: 4
  • Availability: Nationwide
Why We Chose It

The Chase Homebuyer Grant was designed to help underrepresented people access affordable housing in over 6,700 communities, making it one of the best grants available to qualifying buyers.

  • Up to $5,000 for closing costs and down payments

  • Additional $500 for borrowed who complete Chase’s homebuyers education program

  • Available in 6,700 underrepresented communities across the nation

  • Not available in all locations

  • Typically requires a 720 FICO score

  • Only available through Chase


Chase has long been known as a leader in personal finance, and its services include banking, credit cards, loans, and mortgages. They also offer several resources to make it easier for customers to purchase a home. One such program, the Chase Enhanced Grant Program, helps members of underrepresented communities, specifically Black and Latino homebuyers, with financial assistance to be used toward down payments and closing costs. As such, we think this is one of the best grants available to homebuyers who fit the demographic requirements.  

Though the Enhanced Homebuyer Grant has been around for several years, Chase expanded the program in 2021, and it now offers eligible award winners $2,500 to $5,000 in grant funds for home purchases in over 6,700 eligible neighborhoods across the nation. 

The Enhanced Homebuyer Grant program is available to buyers who have been approved for a Standard Agency, FHA, or VA mortgage or for Chase’s signature DreaMaker loan. The initial grant award can typically be used toward a down payment or closing costs, and an additional $500 is available to borrowers who complete Chase’s homebuyer education program. 

To qualify for this grant program you must be a first-time homebuyer and approved to purchase a home in one of the eligible communities. In addition, you must be approved for a 30-year, fix-rate mortgage through Chase and meet any specific requirements for the loan program. If you are approved for an FHA or VA loan, you cannot use the funds as a down payment, though they can be used at closing, first toward points and then toward any fees (e.g., legal, title, origination, etc.).

Best for Low Income : American Dream Downpayment Initiative



  • Grant Amount: 6% of mortgage value up to $10,000 
  • No. of Qualifications: 3
  • Availability: Nationwide
Why We Chose It

The American Dream Downpayment Initiative (ADDI) was created to eliminate the costly barriers that are often associated with homeownership. This grant can help homebuyers who meet the income limits by providing funds to cover down payments, legal fees, and other costs, making it the best option for low-income homebuyers.

  • Up to $10,000

  • Available nationwide

  • May be used for down payments, closing costs, or rehabilitation

  • Income limits

  • No online application

  • Must work with HUD-approved lenders


Established in 2003, the American Dream Downpayment Initiative is a federal grant administered by the HUD Office of Community Planning and Development as part of the HOME Investment Partnership program. It is exclusively extended to low-income and underrepresented homebuyers to help them cover down payments and other costs associated with purchasing a home. Thus, this grant is a solid option for anyone with an income level that meets the low-income eligibility requirements of their particular city or county.

Grants are available for 6% of the purchase price up to $10,000, with the average award hovering around $7,500. Award totals vary based on the homebuyer's income needs and program fund availability. 

Funds can be used to pay for down payments, origination fees, credit reports, title fees, legal fees, private appraisal fees, and other related expenses. Some recipients may also be able to use their award funds to build or rehabilitate an existing property. 

To qualify for this grant, you must be a first-time homebuyer with an income below 80% of the median income in your area. If you feel you are eligible for this program, you can work with a qualifying lender in an HUD-approved Participating Jurisdiction to apply for the grant. A list of Participating Jurisdictions can be found on the HUD website. Funds are available on a first come, first served basis.

Best for Foreclosures : Fannie Mae HFA Preferred Incentive Program

Fannie Mae

Fannie Mae

  • Grant Amount: Up to 3% of closing costs
  • No. of Qualifications: 1
  • Availability: Nationwide
Why We Chose It

There are several grants for first-time homebuyers, but few accommodate foreclosures. The Fannie Mae HFA Preferred Incentive Program, however, is designed to help borrowers fund the purchase of foreclosed properties and is an ideal option for first-time homebuyers who want to purchase that type of property.

  • Assists with closing costs

  • Available to moderate- to low-income homebuyers

  • One of few grants available specifically for foreclosures

  • Must go through a real estate agent

  • Only available for Fannie Mae HomePath properties


Fannie Mae, formally known as the Federal National Mortgage Association (FNMA), provides  financial assistance and other resources designed to help moderate- to low-income homebuyers. One of those programs, the Fannie Mae HFA Preferred Incentive Program on HomePath Properties, extends those resources to homebuyers who want to purchase a foreclosed home. Grants or assistance for foreclosures is rare, making this program ideal for anyone considering a foreclosure property. 

By participating in this program, homebuyers can secure closing costs for up to 3% of the total home price. To be eligible for the Fannie Mae HFA Preferred Incentive Program, you must purchase a HomePath Property as your primary residence. HomePath Properties refer to foreclosures owned and for sale by Fannie Mae; other foreclosures are not eligible for the program. 

There’s no online application for this program. Instead, you must work with a real estate professional to request the HFA HomePath Incentive program. At that time, you’ll also need to name the type of financing you’ll be using (e.g., conventional loans, VA, etc.) and documentation regarding the funding source (e.g., a letter naming funding source). Once all documentation is made available, the real estate professional can submit the application along with the initial offer directly through Fannie Mae’s HomePath Offering System.

Final Verdict

There are several grants for first-time homebuyers, and applying for them can help make your home purchase more affordable. Some grants, like those offered through the American Dream Downpayment Initiative or the Chase Enhanced Homebuyer program, are designed to help moderate- to low-income buyers achieve their homebuyer dreams despite financial obstacles. Other grants, like PenFed’s Dream Makers Grant or the Good Neighbor Next Door program, were created to meet the needs of specific borrowers, like first responders, active military members, or veterans. 

If you don’t match the demographic or professional requirements of the grants above, there are still options. The Fannie Mae HFA Preferred Incentive Program is a great choice if you’re considering a foreclosure property. Still, the National Homebuyers Fund, which has a wider pool of eligible candidates is our number-one choice.

Compare the Best Grants for First-Time Homebuyers

Company and Category Grant Amount  Qualifications  Availability  First Come, First Served Basis (Y/N) 
National Homebuyers Fund, Inc.  Best Overall Up to 5% of mortgage amount Income limits as outlined by lender, FICO 640+, DTI 45% or lower Nationwide Yes
PenFed Dream Makers Grant Best for Active Duty Military & Veterans  Up to $5,000  Must be active military or veteran; first-time home owner; 30-year, fixed-rate mortgage; down payment of $500 or more; property price cannot exceed $575,000  Nationwide  Yes 
Good Neighbor Next Door Program Best for First Responders  Up to 50% discount on eligible home prices Must be a first responder, teacher, or other qualifying professional, property must be in a HUD-determined “revitalization” area, must agree to use property as primary residence for 36 months  Yes Yes 
Chase Enhanced Homebuyer Grant Best for Underrepresented People  Up to $5,000  Must be approved for a Chase mortgage product, FICO 720+  Yes  Yes 
American Dream Downpayment Initiative Best for Low Income  Up to $10,000  Income must be below 80% of median income in area, must work with a  lender in a HUD-approved Participating Jurisdiction  Yes  Yes 
Fannie Mae HFA Preferred Incentive Program Best for Foreclosures  Up to 3% of home price  Home must be a HomePath property  Yes  Yes 

How to Choose the Best Grants for First-Time Homebuyers

Finding and applying for grants may seem like a lot of work, but it can pay off in the end by making it easier to cover closing costs, down payment requirements, and other fees and costs associated with buying a home. Here are a few things to keep in mind as you look for grants.

  • Check local, state, and federal opportunities: All of the grants listed above are available to individuals across the nation, but there are many grants that are specific to the homebuyer’s location. As such, always look for grants that are specific to your city, county, and state in addition to any available nationwide. 
  • Look for eligibility requirements: Most grants have at least a few qualification requirements, which may be based on your income, location, profession, or other factors. Identifying these early on can help you save time and avoid applying for grants for which you’re not eligible. 
  • Take note of application deadlines: Many grants operate on a first come, first served basis, but others may be tied to a specific filing date. As you pursue grants, it’s helpful to determine if a specific grant has a deadline, and, if it does, that the deadline can accommodate your anticipated purchase date. 
  • Keep track of important documentation: Though every grant will have a different application process, many will require you to submit documentation regarding your income, your employment history, and property information. Having these documents ready to go at a moment’s notice will make it easier to apply. 

Grants for First-Time Homebuyers vs. Loans for First-Time Homebuyers

There are many specific programs available to first-time homebuyers, including special grants and loans. While both can help you purchase your home, there are a few key differences between the two. One is your repayment obligations after you receive the funds. You will not need to repay grant funds, but you will be required to make regular payments on your mortgage. 

Other differences between the two funding sources are eligibility requirements and qualifications.  First-time homebuyer loans often specify the type of property. For instance, in order to qualify for an FHA loan, the property you wish to purchase must meet minimum property standards. Grants, however, may not be tied to those same qualifications, and funds may be available regardless of whether or not you have an FHA or a conventional loan. 

Because first-time homebuyer loans and grants can vary based on the provider, it’s important to thoroughly review all qualifications, requirements, and contracts prior to accepting funds or closing on a property. 

Frequently Asked Questions

How Do Grants for First-Time Homebuyers Work?

Grants for first-time homebuyers provide eligible borrowers with a specific amount of money, either a flat reward or a percentage of the down payment, closing costs, or property price. In many cases, “first-time homebuyers” will refer to any individual who has not purchased a home in the past or has not been married to a property owner. In other words, if your spouse purchased a home and you lived there, you likely won’t be considered a first-time buyer, even if the home is not in your name. 

It’s important to note that not all grants are the same, and each provider has its own list of requirements, a specific application process, and a funding time frame. For more information about a specific first-time homebuyer grant, always contact the provider or check with a lender or real estate professional who can provide details about the grant. 

Can Grants for First-Time Homebuyers Help Pay Off My Mortgage?

First-time homebuyer grants can be used to help make purchasing a home more affordable, but grant funds typically don’t go toward paying off the mortgage in its entirety. Instead, grant funds can be used to either reduce your total mortgage or to offset other costs associated with purchasing a home, including closing costs, legal fees, inspections, and down payments. 

If you bought a property and are struggling with your mortgage, there are other options to help you manage your monthly payment. Refinancing your mortgage, for example, can help you lower your payments by securing a lower interest rate or longer repayment period. For more information on how you can manage your mortgage, check out these seven solutions for homeowners who are struggling with their mortgage.  

Do Credit Scores Impact Who Receive Grants for First-Time Homebuyers?

Grants requirements vary based on the grant administrator. Some grants, like those offered by National Homebuyers Fund or private banks like Chase, come with specific credit score requirements. Other grants are based on different factors, like income, employment history, profession, etc. As such, credit scores can impact who receives certain grants, but that’s not the case for all grants. 


When analyzing first-time homebuyer grants, we first looked for grants that were available to homebuyers across the nation. Then we reviewed those grants to identify the ones that provided assistance for expenses like down payments and closing costs. We also took into consideration the organization or entity that administered the grant, the qualifications to receive the grant, and any additional benefits and resources associated with the grant. Finally, we identified grants that would offer assistance to specific demographics or homebuying situations to help further narrow down the pool of potential grants.