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7 homebuyer programs (plus a state-by-state guide)

July 23, 2025 ·3 min read

Ready to take your first steps toward a new home? You might not realize how many resources exist to help you qualify for a mortgage and move into the home you want.

Read more: How to use Ally Bank buckets and boosters to save for your dream home

What are homebuyer programs?

These programs are designed to support and encourage homeownership, especially for people who may not be able to afford a home without additional financial assistance.

Who is eligible for homebuyer assistance programs?

First-time homebuyers or those who meet specific income limits and first-time homebuyers are typically eligible for homebuyer assistance. Other common requirements include a minimum credit score of 620 and a debt-to-income (DTI) ratio of 43%.

Types of homebuyer assistance programs

While the programs and support available to you depend on what state and/or city you live in, federal and national programs dedicated to providing homebuyer assistance also exist. Other factors that can impact whether you qualify include the lender you work with and the program's specific requirements.

1. Fannie Mae

The Federal National Mortgage Association (commonly known as Fannie Mae) offers a HomeReady® mortgage program that works with local lenders to offer loans to borrowers with lower incomes. Requirements include:

• Minimum credit score of 620

• No more than 50% DTI ratio

• Income must be no more than 80% of your area’s median income

2. Freddie Mac

The Federal Home Loan Mortgage Corporation (usually referred to as Freddie Mac) offers a HomeOne® mortgage that is similar to Fannie Mae’s HomeReady program in terms of criteria, but without income or geographic limits. Other requirements include:

• 3% down payment

• At least one borrower must be a first-time homebuyer

• At least one borrower must have a usable credit score

3. Federal Housing Administration (FHA)

An FHA loan is a mortgage insured by the FHA with low down payment requirements. These loans require a minimum down payment of 3.5% for borrowers with a credit score of 580 or more, and 10% for borrowers with a credit score of 500 to 579.

4. VA loan

Backed by the U.S. Department of Veteran Affairs, VA loans often require no down payment, mortgage insurance or minimum credit score, making it an appealing choice for those in the military community.

5. U.S. Department of Agriculture (USDA) Rural Development

The USDA offers loans to help people buy or build a single-family home with no money down.

6. Down payment assistance

Alternative sources include:

• Grants: Provides support as a gift that you won’t have to pay back.

• Forgivable loans: Second mortgages that you won’t have to pay back as long as you stay in the home for a certain number of months or years.

• Deferred-payment loans: Second mortgages that only have to be repaid when you move, sell or refinance your first mortgage.

• Matched savings programs: You deposit money into an account and the bank, agency or organization matches the amount deposited.

Keep in mind, qualification for down payment assistance and how much you’re offered is often determined by your household income and credit history. Eligibility can also vary state by state.

7. Renovation loans

A 203(k) loan helps homebuyers finance both the purchase of a home and the cost of necessary repairs and renovations. Eligibility may depend on:

• Your income level

• Your age

• The type of property you own and want to repair

• Where your property is located

Another option for qualified homebuyers is the Fannie Mae Homestyle loan, which covers upfront repair costs to prevent post-purchase financial strain.

What first-time homebuyer programs are available in your state?

In addition to federal and national programs, each state has its own programs for homebuyers.

The right homebuyer program can open the door to homeownership

The journey to homeownership is a personal one that can play a significant role in you and your family’s lives for years to come. Homebuyer programs can make it possible by helping you find a home you love while maintaining your financial health.