First-Time Homebuyer Down Payment Assistance 101: Grants & Programs

Buying your first home is a big step, one that can be both exciting and a little scary. The process of qualifying for a mortgage is something you haven’t done before and it’s natural to want to learn as much as possible before you start.

At Addition Financial, we love working with first-time homebuyers. We understand the questions you have about the process and we’re here to help. One question we get a lot is this: “Is there help available if I don’t have the money for a down payment?”

Assistance for down payments come in two basic forms. The first form is a loan program. Down payment assistance in a loan is often deferred so you won’t have to pay it back until you sell your home. The interest rate is usually 0%, which means there’s little risk involved in taking out a loan.

The second form is a grant program. Grants are not loans. They don’t have to be paid back. These programs are intended to help people who might not otherwise be able to buy a home to become homeowners. Here are some first-time homebuyer programs and grants to consider as you shop for your first house.

FHLBank First-Time Homebuyer Grant

FHLBank Atlanta's First-time Homebuyer Product (FHP) provides up to $5,000 in matching funds for the down payment and closing costs of first-time homebuyers. Since its inception in 1997, the FHP has helped more than 21,000 families and individuals purchase homes.

Addition Financial partners with FHLBank to provide this program to its members interested in purchasing their first home. Our First-Time Homebuyer mortgage allows members to only need 3% of the purchase price down on the loan, which can be covered through the FHLBank grant.

For every $1 you contribute to the down payment and closing costs, you can receive up to $4 in matching funds, up to a maximum of $5,000.

Here are some of the other qualifications you must meet to participate:

  • Contribute at least $1,000 toward the purchase of the home
  • Occupy the home as a primary residence for at least five years
  • Complete a homebuyer education and financial literacy course

If you’d like to learn more about Addition Financial’s First-Time Homebuyer mortgage and down payment assistance program, please click here.

Receive up to $5,000 in down payment assistance through Addition Financial

National Homebuyers Fund

The National Homebuyers Fund (NHF) is a non-profit organization that provides down payment assistance to first-time homebuyers through its NHF grant program.

Here’s what you need to know about NHF grants:

  • They never have to be repaid
  • You can get up to 5% of your loan amount as a grant
  • FHA, VA, USDA and conventional mortgage loan options

NHF grants may also be used to pay for your closing costs. Because you won’t have to pay back the money, an NHF grant can help you gain immediate equity in your home.

Florida Housing Finance Corporation

The Florida Housing Finance Corporation (FHFC) offers two programs that provide down payment assistance to first-time homebuyers.

The first is the Florida Assist Second Mortgage Program (FL Assist), that can provide up to $7,500 in down payment assistance to first-time homebuyers. This isn’t a grant, so you’ll have to pay it back. However, there’s little risk involved because it’s a 0% deferred second mortgage that comes due only when you vacate your home. In other words, if you sell, you’ll have to repay it.

The second option is the 3% Housing Finance Agency (HFA) preferred grant, which – if you qualify – can get you enough money to cover a 3% down payment on your first home. Because it is a grant, you will not need to repay it.

You can apply for both options by visiting the FHFC website.

Seminole County First-Time Buyer Program

If you’re planning to buy a home in Seminole County, FL, you may want to consider a loan from the Seminole County First-Time Buyer Program.

These loans are structured exactly like the FL Assist we mentioned above. If you qualify, you may receive up to $7,500 in down payment assistance to use to buy your first home.

This is a loan, not a grant. Just like the FL Assist, it’s considered a deferred 0% interest second mortgage. You will not have to pay it back until you sell or vacate your home.

Many other counties in Florida offer similar programs. You can find links to other counties by visiting the My First Florida Home website, here.

Down Payment Assistance in Florida

Down Payment Assistance in Florida is a site that offers a variety of resources for first-time homeowners. In addition to the programs and grants we’ve already mentioned, they have:

  • Community partner matching grants for educators, police officers, firefighters, healthcare workers, active and retired military members and their spouses and all other first responders up to a maximum of $7,500.
  • Matching grants for first-time home buyers up to a maximum of $5,000.

Since both options are grants, you won’t have to pay them back. However, there are some requirements you should know about it. For example, matching grants in some cases require homebuyers to attend homeowner education classes. There are also some credit score requirements that may apply depending on your situation.

Finally, it’s important to note that for these grants, new homeownership is identified as not having owned a home in the past three years. That means if you previously owned a home, you may still be able to qualify for down payment assistance if you need it.

Buying your first home is momentous, but at Addition Financial, we believe it shouldn’t be so momentous that you need to worry about how you’ll come up with your down payment. One of our mortgage options, combined with down payment assistance from one of the programs listed here, can put the dream of homeownership within your reach.

To learn about our affordable mortgage options, please click here.

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