What HomeFirst covers and who runs it

HomeFirst is a down payment assistance program run by individual states and sometimes by local housing authorities or nonprofits operating under state contracts. It is not a single national program with one application process — the rules, the amount you can receive, and how you apply depend on which state you live in and which organization administers the program there.

The program typically covers a portion of your down payment and sometimes closing costs when you buy a home. The money comes as a grant (you do not repay it) or a forgivable loan (you repay it only if you sell the home within a set number of years). The exact structure varies by state.

HomeFirst is designed for first-time homebuyers or people who have not owned a home in the past three years. Income limits apply — most states cap assistance at households earning 80 to 120 percent of the area median income, though this varies. You will need a mortgage pre-approval and a signed purchase agreement before you can move forward.

Key Takeaways

  • HomeFirst is administered by your state, not a federal office, so you must contact your state housing finance agency or local housing authority to learn the specific rules where you live.
  • The program covers down payment and sometimes closing costs as a grant or forgivable loan, but the amount and terms depend on your state and which lender you use.
  • You must be a first-time homebuyer (or have not owned in three years), meet income limits, and have a mortgage pre-approval and signed purchase agreement before you can receive funds.
  • Some states pair HomeFirst with specific mortgage products or lenders, so your mortgage lender may need to be enrolled in the program for you to use it.
  • Processing typically takes two to four weeks after you submit all required documents, so plan ahead if you are under a closing deadline.

How to find the HomeFirst program in your state

Start by contacting your state housing finance agency. This is the state office that runs most down payment assistance programs. You can find it by searching "[your state] housing finance agency" or by visiting the National Council of State Housing Agencies website, which lists every state agency with a direct link.

If your state does not run HomeFirst under that name, ask the housing finance agency what down payment assistance programs they offer for first-time homebuyers. Some states use different names for the same type of program. The agency can tell you the income limits, the maximum assistance amount, which lenders participate, and whether the program is currently open to new applicants.

You can also contact your local housing authority or a nonprofit housing counselor in your area. Many of these organizations administer HomeFirst funds on behalf of the state and can walk you through the local process. A HUD-approved housing counselor can review your situation for free and point you to programs you may not have found on your own.

Income limits and first-time homebuyer rules

Most HomeFirst programs limit assistance to households earning between 80 and 120 percent of the area median income for your county. This means the income cap is different depending on where you want to buy. A household that qualifies in one county may not may have access to in a neighboring county with a higher median income.

You must be a first-time homebuyer or have not owned a home in at least three years. "First-time" does not mean you have never looked at a house — it means you have not held title to a residential property. If you are married or in a domestic partnership, usually both spouses or partners must meet the first-time homebuyer requirement, though some programs allow one partner to have prior ownership if the other does not.

Some states also require that you live in the home you are buying — you cannot use HomeFirst to purchase an investment property or a second home. A few programs have additional requirements, such as completing a homebuyer education course or working with a HUD-approved counselor before you close.

Down payment and closing cost coverage

The amount HomeFirst covers varies by state and by the specific program within that state. Some programs cover up to 5 percent of the purchase price, others up to 10 percent, and a few cover more. A few programs also cover a portion of closing costs, which typically run 2 to 5 percent of the loan amount.

The assistance usually comes as a grant, meaning you do not repay it. Some states offer it as a forgivable loan instead — you receive the money at closing, but if you sell the home or refinance within a set period (often 5 to 10 years), you must repay a portion or all of it. A few programs use a hybrid: the assistance is a grant if you stay in the home, but becomes a loan if you sell early.

The money is typically paid directly to the title company or closing agent at closing, not to you. This means you do not have to manage the funds yourself — the closing agent applies it to your down payment and closing costs as part of the closing process.

Lender requirements and program enrollment

Not every mortgage lender participates in HomeFirst. Some states require that your lender be enrolled in the program, while others allow any lender to work with HomeFirst assistance. Before you commit to a lender, ask whether they are enrolled and whether they have experience processing HomeFirst funds.

Some states pair HomeFirst with specific mortgage products — for example, a state-backed loan program or a conventional loan with particular terms. Your lender can tell you which products may have access to for HomeFirst assistance in your state. If your lender is not enrolled or does not offer a may have access to product, you may need to switch lenders to use the program.

A few programs require that you use a specific mortgage amount or loan type. For example, some HomeFirst programs work only with conventional loans, while others work with FHA or VA loans. Ask your lender and the program administrator to confirm that your planned mortgage will work with the assistance you are seeking.

Documents you will need and the timeline

Before you apply, gather a mortgage pre-approval letter from your lender, a signed purchase agreement for the home you are buying, proof of income (recent pay stubs and tax returns), and identification. You will also need your lender's information and the title company or closing agent's contact details.

The program administrator will ask you to complete an application form and may request additional documents such as bank statements, employment verification, or a credit report authorization. Processing typically takes two to four weeks from the time you submit a complete application, though this varies by state and by how busy the program is.

Because processing takes time, submit your application as soon as you have a signed purchase agreement and a pre-approval. If you are under a tight closing deadline, tell the program administrator upfront — some can expedite if the closing date is within a few weeks. Do not wait until a week before closing to apply.

What happens if the program is closed or you do not may have access to

Some HomeFirst programs run out of funding and close to new applicants until the next budget year. If your state's program is closed, ask when it typically reopens and whether you can be placed on a waiting list. Some states reopen in the fall, others in January, and the timing varies year to year.

If you do not meet the income limit or the first-time homebuyer requirement, you may still have other options. Ask the housing finance agency or a housing counselor what other down payment assistance programs exist in your state — many states run multiple programs with different rules. Some programs are income-based, others are targeted to specific groups (teachers, veterans, rural buyers), and a few have no income limit at all.

If HomeFirst is not available to you, you can also explore down payment assistance from your employer, a nonprofit in your area, or a lender-based program. Some mortgage lenders offer their own down payment assistance or have partnerships with nonprofits that do. A housing counselor can help you sort through what is available where you live.

Frequently Asked Questions

Can I use HomeFirst if I am buying with a co-borrower who has owned a home before?

This depends on your state's rules. Some programs require that all borrowers on the loan meet the first-time homebuyer requirement. Others allow one borrower to have prior ownership as long as the other does not. Contact your state housing finance agency or the program administrator to confirm the rule in your state before you apply.

What if my purchase falls through after I have been approved for HomeFirst?

If your purchase does not close, the assistance is typically cancelled and the funds are returned to the program. You may be able to reapply if you find another home within the same program year, but you will need a new purchase agreement and may need to resubmit some documents. Ask the program administrator about their policy on cancelled purchases.

Do I have to repay HomeFirst assistance if I sell my home?

This depends on whether your state offers it as a grant or a forgivable loan. If it is a grant, you keep the money and do not repay it. If it is a forgivable loan, you may owe repayment if you sell within a certain number of years — typically 5 to 10. Check your program documents or ask the administrator before closing to know your repayment obligation.

Can I use HomeFirst with an FHA loan or a VA loan?

Some states allow HomeFirst with FHA and VA loans, while others limit it to conventional loans. Ask your lender whether your planned loan type qualifies for HomeFirst assistance in your state. Your lender and the program administrator should confirm this before you apply.

How much down payment do I need if I use HomeFirst?

This varies by state and by your mortgage lender. HomeFirst covers a portion of your down payment, but you typically still need to contribute some of your own money. Some programs work with loans that require as little as 3 percent down from you; others require 5 or 10 percent. Ask your lender what the minimum down payment is for the loan product you are using, then ask how much HomeFirst will cover.