Who qualifies for a $5,000 first-time home buyer grant, and how to you get one?
Note: There isn’t a single nationwide program that automatically gives everyone a $5,000 first-time home buyer grant, but many local, state, nonprofit, and lender programs exist that offer $5,000 (or more) in grant or down payment assistance to help eligible, low to moderate income first-time buyers afford a home.
For eligibility purposes, most programs define a first-time buyer as someone who hasn’t owned a home in the last 3 years, and low-income limits are usually set as a percentage of the area media income (AMI).
Where To Find $5,000 First-Time Home Buyer Grants
- State and county grant programs
- Lender assistance
- Non Profit programs
State And County Grants
Many counties and local housing authorities fund assistance programs offering $5,000 or more for down payments or closing costs for first-time buyers. For example:
- In Cumberland County, Pennsylvania, up to $5,000 in assistance can be used toward down payment and closing costs. Funding is issued as a forgivable loan, which means buyers don’t have to repay the loan if conditions are met.
To qualify, homebuyers must have lived in the county for at least 6 months, have qualifying income based on their household size and county median income, and purchase a single family home.
More details on Cumberland County $5,000 first-time homebuyer grant: https://cchra.com/program/down-payment-closing-costs-assistance-program/
- In Orange County, Florida, a silent second mortgage to help cover down payment and closing costs up to $80,000 is available to homebuyers purchasing their first home. Payments on the principal and interest are deferred for the term of the loan (30 years). Income limits based on household size apply.
More details on Orange County Mortgage Assistance Program: https://www.ochcd.org/housing-development/homeowner-programs
- In Albany County, New York, the First-Time Home Buyer Grant Program offers eligible buyers a grant to help with down payment and closing costs. The grant is in the form of a forgivable second mortgage which depreciates over 10 – 15 years and is fully forgiven after that time if all conditions are met. Grant amounts are variable and are based on income and property purchase price.
More details on Albany County First-Time Homebuyer Grant: https://acrha.org/services/home-down-payment-assistance/
To find down payment assistance programs in your county, check your local government or housing finance authority website, or ask your lender or real estate agent.
Bank And Lender Sponsored Down Payment Programs
Some banks and lenders run assistance programs that help with down payments and closing costs. Here are just a few examples:
- Citibank offers homebuyers up to $7,500 towards closing costs. This lender credit can be applied to any type of home loan. To qualify, income must be under 120% of the area median income. The home to be purchased must also be in an area with a Citibank branch or in a specific area in one of fourteen major cities.
Citibank Closing Costs Assistance: https://www.citi.com/mortgage/lender-paid-assistance
- Wells Fargo makes home buying more affordable with its $10,000 Homebuyer Access Grant. A separate program also offers $5,000 towards closing costs. Eligibility is based on income and location. Grants issued through these programs do not have to be repaid.
Wells Fargo Homebuyer Grants: https://www.wellsfargo.com/mortgage/buying-a-house/affordable-options/
- Bank of America offers closing cost and down payment assistance. Eligible homebuyers receive up to $7,500 through Our America’s Home Grant® program, which can be used to cover closing costs or buy down the mortgage interest rate. The separate, Our Down Payment Grant covers 3% of the purchase price up to $10,000. These grants do not have to be repaid and can be combined.
Bank of America Homebuyer Grants: https://www.bankofamerica.com/mortgage/affordable-housing-programs/
National Homebuyers Fund Grants
The National Homebuyers Fund provides down payment and closing cost assistance usually worth up to 3.5% or 5% of the mortgage loan amount.
On a $250,000 loan, for example, 3.5% down payment assistance is worth $8,750 and 5% is worth $12,500.
Assistance may be given as a grant with no repayment requirement, or a 3-year loan with deferred payments, forgivable after 3 years.
Income limits and credit score requirements are flexible and programs are available through approved lenders nationwide. The exact percentage and terms depend on the specific program, lender, and your eligibility (credit, income, loan type, etc.)
The property doesn’t have to be your first home purchase, but it must be used as your primary residence.
More details: https://nhfloan.org/programs.html
The Chenoa Fund
This grant program offers down payment assistance worth up to 5% of the home’s purchase price.
Grants are made as silent second loans, meaning there are no repayments to make. The loan is forgiven after 36 consecutive, on-time payments on the first mortgage have been made.
Chenoa Fund Down Payment Grant: https://chenoafund.org/
The Good Neighbor Next Door Program
The Department of Housing and Urban Development (HUD) runs a valuable financial assistance program for teachers, law enforcement officers, firefighters, and EMT’s.
If you work in one of these professions you can get a 50% discount off the listed price of a home sold through the program, as long as the property is used as a primary residence for at least 3 years.
Homebuyers must sign a silent second mortgage for the discounted amount. This mortgage has no interest or repayments and is forgiven (eliminated) at the end of 3 years.
Learn more: https://www.hud.gov/helping-americans/good-neighbor
How to Qualify For A $5,000 First-Time Home Buyer Grant
Each grant or assistance program will have specific eligibility criteria, but generally you’ll need:
- No property ownership in the last three years
- A minimum credit score of around 620
- A debt-to-income ratio below 43% or 45%
- Documented steady employment or income history for at least 2 years
- Savings for the borrower contribution (for example, $1,000)
- Funds to cover at least part of your closing costs
- Household income within the program’s limits, often 80% – 120% of the AMI
- Property price within the program’s limit
- Completion of a homebuyer education course
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