Best First Time Homebuyer Programs for Down Payment Help

There's help out there for first-time buyers: Grants, down payment assistance, "free money," zero-down loans. You might have heard someone mention it when you discussed how hard it is to save up for a down payment with home prices where they are today.

What you probably can't tell is which programs apply to you, and how much of the discussion around down payment assistance involves someone trying to sell you something.

While that confusion is understandable, it’s also important to recognize that there is more help available right now than at any point on record. Down Payment Resource, which tracks these programs nationwide, counted 2,746 homeownership programs in its Q2 2026 index, a new survey high, up from 2,679 the quarter before.[1] At the same time, first-time buyers have never been rarer. They made up just 21% of all buyers in the latest National Association of Realtors® data, the lowest share since NAR started tracking it in 1981, down from 24% a year earlier.[2] The median first-time buyer is now 40 years old.[3]

Of those 2,746 programs, only 2,114 are active and funded, about 77%.[1] That means roughly one in four programs is paused or out of money at any given moment. So the help is real and there's a lot of it, but "it exists" and "you can use it today" are two different variables, and you have to check both.

We’ll walk through what exists (loans, grants, and down payment assistance), how to figure out what you'd qualify for using your own numbers, what you'd owe back, and what to do first. Every rate and limit below is current as of publication; because programs and figures change, verify anything you plan to lean on before you count on it.

FHA loan vs. "first-time buyer program" vs. down payment assistance

Most people arrive thinking these are three competing options and they have to pick one. They aren't, and you don't. They're three different layers, and they usually stack.

A loan is how you finance the purchase. "First-time buyer" is an eligibility status. Down payment assistance is money that helps with the cash you bring to the table. You can use all three at once: an FHA loan (the financing), qualifying as a first-time buyer (the status that unlocks certain programs), and a down payment assistance grant (the money).

Troy Arnold, Mortgage Market Manager at Westerra Credit Union, explains the distinction: "FHA is a type of mortgage. 'First-time homebuyer' is an eligibility category. Down payment assistance is a separate source of money that may be paired with a mortgage. An FHA loan is made by a lender and insured by the Federal Housing Administration… it is not limited to first-time buyers. Many programs define [first-time buyer] as someone who has not owned a primary residence during the previous three years."

"First-time buyer" rarely means you've never owned a home. Most programs define it as not having owned a primary residence in the past three years, so if you owned a place years ago and have been renting since, you can often requalify as a first-time buyer.[4]

Once the three layers click, a lot of the noise clears. You're not choosing between an FHA loan and a first-time program and a grant. You're choosing a loan, checking whether your status opens any doors, and then looking for money to help with the down payment and closing costs. Arnold points to where mixing them up gets expensive: "The confusion costs buyers the most when they assume they must use FHA to receive assistance — or assume every assistance program is free money. A buyer might qualify for conventional financing with better mortgage-insurance terms, or discover that the 'grant' they expected is actually a second mortgage that must be repaid."

A quick note before you go further: the loan and the programs are only part of the picture. A knowledgeable local agent can help you find homes that qualify for the programs you're targeting (some assistance is tied to specific areas or property types) and keep the timeline on track. If you want help finding one, Clever matches you with vetted local agents at no cost to you.

The five things that decide what you qualify for

The program list gets a lot shorter once you filter it through your own situation. Five levers do most of the sorting. Two are hard gates that either apply to you or don't. Three are more like a sliding scale, and where you land on them opens or closes specific programs.

Credit score (sliding)

This sets your minimum down payment on FHA loans and your access to the conventional 3%-down options. A score of 500 to 579 opens FHA at 10% down, which is $40,000 on a $400,000 home. At 580 or higher, FHA drops to 3.5% down, or $14,000 on that same home.[5] At 620 or higher, the conventional 3%-down programs come into range, which is $12,000.[4] If your score needs work, our guide to buying a home with bad credit covers the moves that help most.

Cash on hand (sliding)

How much you can put down determines which loans are realistic and how much assistance you'll need to close the gap. This is the lever most first-time buyers struggle with the most, and it's where down payment assistance does its work.

Income vs. your area median income, or AMI (sliding)

This is the one that trips people up. Loans like FHA have no income limit at all. But most down payment assistance and the conventional low-income programs cap your income at a percentage of your area's median. Earn under the cap and doors open; earn over it and some close. There's a whole section below on finding your own AMI, because "80% of AMI" means nothing until you know what your area's median is.

Occupation (hard gate)

A few programs are tied to your job. VA loans are for eligible service members, veterans, and certain surviving spouses. Good Neighbor Next Door is for full-time teachers, law enforcement officers, firefighters, and EMTs. You either qualify or you don't; there's no partial credit.

Location (hard gate)

USDA loans require the property to sit in an eligible rural area. Many state and local programs only work in certain counties, cities, or even specific census tracts. Location can rule a program out, and in some cases it can also override an income cap, which comes up again in the higher-earner section.

Run yourself through those five and you'll have a short list instead of an overwhelming one. A good general guideline: start with the hard gates (occupation and location), since they instantly include or exclude whole categories, then work the three sliding levers to see what's in reach.

Federal loan programs, side by side

These are the loans most first-time buyers use. Most are open to repeat buyers, too, but they tend to be especially useful for a first purchase because you don't have equity from a prior sale to lean on.

The table below anchors every down payment to a $400,000 home so you can compare real dollars, and it adds the question that drives half the confusion: does the program cap your income?

Sources for the figures in this table are cited in each program's section below.

FHA loans

FHA loans are popular with first-time buyers for a straightforward reason: they let you in with a lower credit score and a smaller down payment than most conventional loans. You can qualify at 580 with 3.5% down ($14,000 on a $400,000 home), or between 500 and 579 with 10% down ($40,000).[5]

The trade-off is mortgage insurance, and it's the part people underestimate. FHA charges an upfront mortgage insurance premium (MIP) of 1.75%. On a $386,000 base loan (that's $400,000 minus a 3.5% down payment), that's $6,755, usually rolled into the loan. Then there's an annual MIP that runs from 0.15% to 0.75% depending on your loan terms; most buyers putting 3.5% down pay 0.55%, which works out to about $2,123 a year, or roughly $177 a month.[6] Unlike conventional mortgage insurance, FHA's annual premium often sticks around for the life of the loan.

One myth worth addressing directly: FHA has loan limits, not income limits. There's a cap on how much you can borrow, but no cap on how much you can earn. In 2026 the FHA loan limit for a one-unit home runs from a floor of $541,287 in most areas to a ceiling of $1,249,125 in the highest-cost counties, effective for case numbers assigned on or after January 1, 2026.[7] You can look up your own county's limit with HUD's tool at entp.hud.gov/idapp/html/hicostlook.cfm (select CY26).

Aaron Bae, a licensed mortgage broker at LA Mortgage & Real Estate, says the income-limit myth is the one he corrects most: "On the myths, the income limit one is the one I correct most often, and it's just flat wrong. FHA loans have no income limit at all. You could be making seven figures and technically still qualify, as long as your debt-to-income (DTI) and credit check out.

“People usually mix this up with down payment assistance programs, which do often have income caps, typically somewhere in the range of 80 to 120 percent of the area median income depending on the program."

FHA isn't only for people with credit problems. It does allow lower scores than most conventional loans, sometimes into the high 500s depending on the lender, but plenty of buyers with strong credit choose FHA on purpose for the low down payment.

USDA loans

USDA loans are built around location, not first-time status. The property has to sit in an eligible rural area, and your household income can't exceed 115% of your area's median.[8] The payoff is a big one: no down payment. On a $400,000 purchase, that's $0 out of pocket toward the down payment.

There are fees in place of a down payment. USDA charges an upfront guarantee fee of 1.00% ($4,000 on $400,000, usually financed) and an annual fee of 0.35% (about $1,400 a year, or roughly $117 a month, dropping as your balance falls).[9] USDA sets these fees per federal fiscal year (October through September), and it's the date USDA issues your Conditional Commitment, not your closing date, that determines which year's fees apply. Check whether your target home qualifies at eligibility.sc.egov.usda.gov/eligibility.

VA loans

VA loans are for eligible active-duty service members, veterans, and certain surviving spouses (not spouses in general, a distinction worth getting right).[10] The core benefits are hard to beat: 0% down, no monthly mortgage insurance, and no income limit. You'll need a Certificate of Eligibility (COE) to confirm you qualify.

The main cost is the VA funding fee, and it's tiered by down payment and whether it's your first VA loan, not by first-time buyer status. On a $400,000 purchase, first use runs 2.15% at 0% down ($8,600), 1.50% at 5% to 9.99% down ($5,700), and 1.25% at 10% or more down ($4,500). A subsequent-use loan at 0% down runs 3.30% ($13,200).[11] Veterans receiving service-connected disability compensation, eligible Purple Heart recipients on active duty, and certain surviving spouses are exempt from the fee entirely, which brings it to $0.

HomeReady

HomeReady is Fannie Mae's low-down-payment conventional loan for low-to-moderate-income buyers. You can put down as little as 3% ($12,000 on $400,000), your income has to stay at or under 80% of your area's median, and the mortgage insurance is cancellable once you build enough equity.[12]

There's a $2,500 credit toward your down payment or closing costs, but it comes with two conditions that are easy to miss. It's only for very low-income buyers (at or under 50% of AMI), and as of January 28, 2026, at least one borrower on the loan has to be a first-time buyer. The credit runs through February 28, 2027 for whole loans purchased.[13]

Home Possible

Home Possible is Freddie Mac's version, and it mirrors HomeReady closely: 3% down ($12,000 on $400,000), an income cap at 80% of AMI, cancellable mortgage insurance, and gift or grant funds allowed for the down payment.[14]

The credit score question is where most write-ups get sloppy, so here's the straight version: it depends on the underwriting path. Loans run through Freddie Mac's automated system (Loan Product Advisor) have credit acceptability set by the system, generally a 620 minimum for one-to-four-unit properties. The 660 figure you'll see quoted applies to manually underwritten one-unit fixed-rate purchases. Manually underwritten one-unit ARMs and no-cash-out refinances need 680, and two-to-four-unit properties need 700.[14] Ask your lender which path applies to you rather than assuming a single number. Freddie Mac also offers a parallel $2,500 credit on Home Possible for very low-income buyers, with the same first-time-buyer requirement.[14]

Fannie Mae Standard 97

The Standard 97 is a conventional loan aimed at first-time buyers who want the lowest down payment on a conventional mortgage. You can qualify with 3% down ($12,000 on $400,000) and a minimum 620 credit score, "first-time" here meaning no ownership in the past three years, and the mortgage insurance cancels once you reach 20% equity.[4]

The differentiator to keep in mind: no income cap. That makes Standard 97 the conventional 3%-down option for buyers who earn too much for HomeReady or Home Possible, and it's the program the higher-earner section below points back to.

Down payment assistance and grants, and what you owe back

Whether you owe any money back depends on how the program is structured. Some assistance is yours to keep. Some assistance is a loan wearing the word "grant." Before you accept a dollar of it, you need to know which is which.

Kristina Morales, a loan officer at Loanfully, describes the common repayment triggers plainly: some programs "charge a slightly higher note interest rate or require you to pay back the full grant if you sell or refinance within 3 to 5 years." Those timeframes describe typical program design, not a fixed rule, so terms vary from program to program. As for how much assistance covers, Pavel Khaykin of Pavel Buys Houses puts a range on it: down payment assistance is "typically 5K–25K but come[s] with income limits, property restrictions … a silent second mortgage that must be paid off when you sell or refinance." 

A silent second mortgage is a second loan with no monthly payment and often no interest that sits quietly behind your main mortgage until you sell, refinance, or pay off the home; then it comes due.

Put that range against your purchase price and it gets concrete fast. On a $400,000 home, $5,000 of assistance covers 1.25% of the price, $10,000 covers 2.50%, and $25,000 covers 6.25%. It’s helpful, but it rarely covers the whole down payment plus closing costs.

Here are the main structures you'll run into, and what each one means for repayment:

Say a program hands you assistance in exchange for a note rate one point higher than you'd otherwise get. On a $388,000 loan (a 3%-down conventional loan on a $400,000 home), the difference between 6.50% and 7.50% is about $261 a month. That's $3,126 a year, or $15,632 over five years.[15]

Those rates are illustrative, and current rates shift weekly, so run your own numbers. But the point holds: a $10,000 grant paired with a one-point rate bump can cost you more than it gives back if you stay in the home a while.

One more thing to check before you sign: the strings. Many assistance programs restrict renting out rooms, cash-out refinances, and home equity lines of credit for as long as the assistance is outstanding. Those rules rarely show up in the marketing. Ask for them in writing.

How to find your own AMI and run the numbers

You might have seen that a program caps income at "80% of AMI" or "115% of AMI," which is useless if you don't know your area's median income. Finding it is a five-minute task, and doing it turns an abstraction into a yes-or-no answer.

Start with the two worked examples that make the math obvious. If your area's median income is $75,000, USDA's 115% cap lets you earn up to $86,250 and still qualify. If your area's median is $80,000, HomeReady's 80% cap tops out at $64,000. The very low-income threshold that unlocks the $2,500 credits (50% of AMI) would be $40,000 at that same $80,000 median. And because most down payment assistance caps income somewhere between 80% and 120% of AMI, the DPA band at an $80,000 median runs roughly $64,000 to $96,000.

To find your own numbers:

1. Look up your county's area median income using the Fannie Mae AMI Lookup Tool, the Freddie Mac Home Possible eligibility map, or HUD's income limits.
2. Find the percentage the program uses (80%, 115%, and so on).
3. Multiply your AMI by that percentage to get the income cap.
4. Compare your household income to the cap.

One critical caveat: these limits reset every year. Fannie Mae loaded its 2026 area median incomes into its systems and lookup tool on June 13, 2026.[12] A limit you checked last year is not the limit today, and that cuts both ways. If you were just over the cap a year ago, you might slip under this year's, so it's worth re-checking before you rule anything out.

State and local programs (where most of the money is)

If you only look at federal loans, you're almost certainly looking in the wrong place for the best assistance. The biggest source of help isn't federal or even state. It's local. Of the 2,746 programs Down Payment Resource tracks, municipalities run the largest share at 39% (1,068 programs), followed by nonprofits at 22% (601) and state housing finance agencies at 18% (485).[1] That's backwards from where most buyers look first, which is federal.

The dollar figures range widely. Named state and local programs run from a few thousand dollars into the tens of thousands, and in high-cost states some reach six figures. Ryan Winslow, a loan officer with Novus Home Mortgage and broker at Winslow Homes, gives an example of a clean stack with real numbers: "Cleanest stack is USDA zero-down + Florida Hometown Heroes (up to $35K for closing) + lender credit." State program caps and funding levels change often, so confirm current terms with the state agency before you build a plan around a specific figure.

Which brings up a warning: funds run out. Local programs get fully allocated, often with no waiting list, and once the money's gone, you're out of luck until the next funding cycle. That's part of why roughly one in four of the programs tracked nationally is paused or unfunded at any given moment. Don't assume a program you read about last month is still taking applications this month.

Common requirements in state programs

The exact rules vary by state and program, but most share a similar checklist. You'll usually need to be a first-time buyer (again, often defined as no ownership in the past three years), use the home as your primary residence, complete a homebuyer education course, meet an income limit tied to your area's median, and clear a minimum credit score (commonly somewhere between 620 and 680).

Where to look by state

Your state housing finance agency is the best starting point. You can find yours through the NCSHA state HFA directory. For a state-by-state breakdown of the buying process and local programs, see our first-time buyer guides organized by region:

First-generation programs

A small but growing category helps first-generation buyers, meaning people whose parents didn't own a home, on the logic that they don't have family wealth to draw on. These are rare: just 35 nationwide, about 1.3% of all programs.[1] Because they're scarce and often time-limited, they're easy to miss, which is exactly why it's worth checking your state HFA to see whether one exists where you're buying.

Can you stack programs?

Yes, often. But stacking works through a mechanism most buyers never hear about until it bites them: lien order, meaning who gets repaid first if the home sells.

Your primary mortgage takes first position; it gets paid before anyone else. Down payment assistance typically takes second position. If you try to add a third program, it would land in third position, and here's where stacks fall apart: many programs refuse to sit in third position, because the further back you are in line, the less likely you are to be repaid if the home sells for less than expected. So two programs often stack fine and a third gets rejected, not because you don't qualify but because of the order.

It also helps to reset expectations about what stacking gets you. Ashley Harris, Director of Homebuyer Education at Neighbors Bank, frames it well: you absolutely can stack, "but it's not extreme couponing. So there's no way to completely reduce or remove all of the costs … zero down doesn't mean nothing out of pocket." Harris also flags two practical wrinkles that rarely make it onto program pages. First, an assistance provider usually runs its own approval on top of your lender's, which can add two to four weeks to your closing timeline. Second, on FHA loans, assistance can collide with the closing-cost cap.

That closing-cost-cap conflict is worth the math because it's a common way a stack goes sideways. FHA limits how much interested parties (like the seller) can contribute toward your costs to 6% of the purchase price. On a $400,000 home, that's $24,000 of total room. If you negotiate $12,000 in seller concessions, you've used half of it, leaving $12,000. Now try to apply a $15,000 down payment assistance grant toward closing costs and you've blown past the cap — if that assistance counts as an interested-party contribution. This is where the source of the money matters: FHA's 6% cap applies to interested parties, which means the seller, builder, developer, or agent. Assistance from a state housing finance agency or other governmental entity generally sits outside the cap, while seller-affiliated and some lender-funded programs sit inside it. Ask your lender which side of that line your specific program falls on, because it changes the math entirely. Winslow describes the same trap from the field: pairing FHA with a grant when the buyer also wants seller concessions, where "the 6% FHA cap eats the DPA and the buyer brings cash to close." The lesson isn't "don't stack." It's "ask about lien position and the closing-cost cap before you assume two programs will play together."

Programs tied to your job or your family's history

Some of the most generous help is reserved for specific occupations or situations. Two are worth knowing by name.

Good Neighbor Next Door

This one gets miscategorized constantly, so let's be precise: Good Neighbor Next Door is not a loan. It's a 50% discount off the list price of HUD-owned homes in designated revitalization areas.[16] You still finance the purchase with a regular mortgage; the discount is secured by a second mortgage and note for the discount amount, with no interest and no payments, that's forgiven after you live in the home for 36 months.

The dollars are dramatic. On a $400,000 HUD-owned home, a 50% discount is $200,000 off. You finance $200,000, and the $200,000 silent second is forgiven once you hit the 36-month owner-occupancy mark. There's an extra detail almost nobody surfaces: if you use an FHA-insured mortgage with Good Neighbor Next Door, you may qualify for a minimum down payment of just $100, versus the $7,000 you'd owe at the standard 3.5% on that $200,000 loan.[17]

Eligibility is limited to full-time law enforcement officers, pre-K through 12 teachers, firefighters, and EMTs. Two practical constraints: eligible homes are listed for only seven days, and if more than one qualified buyer bids, the winner is chosen by random lottery. You can search listings at hudhomestore.gov.

First-generation buyer programs

If your parents never owned a home, a handful of programs are built specifically for you, usually covering down payment or closing costs. As noted above, they're scarce (35 nationwide) and often open only for limited windows. Rather than repeat the details here, check your state housing finance agency through the NCSHA directory to see whether one is available where you're buying, and act quickly if it is.

The $25,000 grant and the tax credit: proposed vs. available now

You've probably seen headlines about a $15,000, $25,000, or $30,000 grant for first-time buyers. As of publication, all of these are proposed bills, not programs you can apply for.

Four are live in Congress and unpassed:

• Downpayment Toward Equity Act (S.967), reintroduced this Congress by Sen. Raphael Warnock, would provide up to $25,000 for certain first-generation and first-time buyers.[18]
• First-Time Homebuyer Tax Credit Act of 2025 (H.R. 4717 / S.2402) would create a refundable tax credit for first-time buyers.[19]
• H.R. 3475, another first-time buyer measure, is also introduced and unpassed.[20]
• Make American Housing Affordable (MAHA) Act, introduced January 28, 2026 by Rep. Tom Kean Jr. and co-led by Rep. Ryan Mackenzie, would create a $5,000 credit for individual filers earning under $250,000 and up to $10,000 for joint filers under $500,000, phasing out at $300,000 and $600,000 and claimable once every five years.[21]

Put those figures in perspective on a $400,000 purchase: $5,000 is 1.25% of the price, $10,000 is 2.5%, and $25,000 is 6.25%. Those are meaningful contributions if any of them becomes law, but not the "solves everything" windfall the headlines imply, and again, not available today.

Before you count on any program you read about, run it through four questions:

1. Has it become law?
2. Has the responsible agency published final program rules?
3. Is funding currently available?
4. Are approved lenders or housing agencies accepting applications?

If the answer to all four isn't yes, it's a proposal, not a plan. Bae puts the same test in field terms: "As of today, none of it has passed… if you can't find it on your state housing finance agency's website or HUD's own site with actual steps to apply, it isn't available yet, it's just a headline… I've had people delay buying for months waiting on a grant that never showed up, and that's a rough position to watch someone put themselves in." (Accurate as of publication; re-check current bill status before relying on it.)

The federal government does not hand out grants or "free money" to people buying a home, and ads claiming otherwise are often scams.[22]

Making too much to qualify?

If you earn a solid income but haven't been able to save a down payment, you've probably run into the most frustrating trap in this whole system: you make too much for the assistance but not enough to have secured a decent nest egg. One buyer described it as a box you have to fit inside, needing enough income to qualify for the mortgage but not so much that you're disqualified from the help. Some people don't fit, and a few have reached the closing table only to be knocked out of a program for being a few hundred dollars over the limit.

First, clear out the misinformation, because a lot of it circulates. Being over an assistance program's income cap does not mean you "make too much to qualify for anything," even if someone in the industry told you that. There's no single household income limit that shuts you out of homeownership programs across the board. FHA, VA, and the conventional Standard 97 have no income caps at all. What has caps is a subset of assistance programs, not the loans themselves.

Here's what's open to you if your income is high:

• FHA (3.5% down, $14,000 on a $400,000 home): no income limit
• Fannie Mae Standard 97 and other conventional 3%-down options ($12,000): no income limit
• VA for eligible borrowers ($0 down): no income limit
• Lender portfolio products, which some banks and credit unions hold in-house, sometimes with their own flexible terms

A few more angles that get overlooked. Some employers offer homebuying assistance or forgivable loans as part of relocation or retention packages, and it costs nothing to ask HR whether yours does; Bae notes this is an underused option for higher earners. Assistance structured as a repayable second loan (rather than an outright grant) sometimes carries higher income caps or none at all, since the money is expected to come back. And location can override income: some programs waive income limits entirely in designated census tracts, so a home in the right area can put a capped program back on the table. In fact, 291 of the programs tracked nationally (about 11%) carry no income restrictions at all, a share that grew last quarter.[1]

One workaround comes up a lot: qualifying on one income when you're a dual-income household, to slip under a program's cap. It can work, but be clear-eyed about the trade-off. Dropping an income to meet the cap also lowers the loan amount you'll be approved for, so you may unlock the assistance and shrink your budget at the same time. Whether that math helps depends on the size of the assistance versus the size of the house you're giving up.

How to tell real help from a sales pitch

Search this topic for ten minutes and you'll wade through lender spam, "DM me for free money" posts, and slick sites that look official but often aren't. Sorting the real from the bait is a skill.

Bae's guidance is a good filter: "Legitimate programs come from a state housing finance agency, a city or county housing department, a HUD approved nonprofit, or sometimes an employer or specific lender. If it's not coming from one of those, be careful. If anyone asks you to pay an upfront fee just to find out if you qualify, that's a real red flag, since legitimate DPA programs don't charge for that."

He adds that your state HFA's own website is the best starting point, since it lists the programs it runs and partners on, and that a HUD-approved counselor will review anything you're unsure about for free.

Watch for these red flags:

• Anyone charging an upfront fee just to check whether you qualify
• Claims that everyone qualifies
• Pressure to sign before you've read the terms or run them past your lender
• Refusal to put repayment or forgiveness terms in writing
• A "grant" that won't name the agency funding it
• Rate or fee structures that don't get disclosed until late in the process

Use the verification tools that exist for exactly this. Check any lender or loan officer at NMLS Consumer Access. Find a legitimate, free advisor through the HUD-approved housing counselor search or the HOPE Hotline at 1-888-995-HOPE (4673). Two minutes of checking saves a lot of grief later.

What to do first, and who to talk to

"Talk to a lender" is where most advice stops, and it's too vague to act on. Here's the order experienced buyers recommend:

1. Take a free homebuyer education class: Most down payment assistance requires one anyway, so doing it first means you're not scrambling to satisfy a requirement at the last minute. Two solid free options: Fannie Mae HomeView and Freddie Mac CreditSmart Homebuyer U.
2. Get pre-approved before you shop, not after: It's usually a soft credit pull, and it tells you what's realistic before you fall for a house you can't finance.
3. Compare two to three lenders: Include local banks and credit unions, not just the national names. Terms and in-house programs vary more than you'd expect.
4. Ask about lien position before assuming any two programs will stack.
5. Verify current terms and funding on anything you're counting on, especially local programs that can run dry.

On the question of which kind of pro to call, each type offers something different. Brokers see the widest set of programs across many lenders. Credit unions sometimes have in-house products with flexible or no income caps. HUD-approved counselors are free and aren't trying to sell you a loan, which makes them a useful neutral second opinion. Many buyers use more than one.

"The single most valuable step is to complete a thorough mortgage preapproval and program review before touring homes seriously,” says Arnold. “The most common ordering mistake is finding a house first and trying to make the financing fit afterward… The goal is not simply to learn the largest loan amount someone can obtain. It is to determine a comfortable payment." For the questions to bring to those conversations, our list of questions to ask when buying a house is a good primer, and if you're weighing tapping retirement savings, read using a 401(k) for a down payment first.

Getting in the door isn't the same as staying

Assistance solves one problem: the cash it takes to get to closing. It doesn't solve the cost of owning the home after that. Property taxes tend to rise every year. Insurance is rising faster in a lot of markets. Maintenance and repairs don't wait for a good month, and HOA dues, if you have them, only go up.

The comfortable-payment point Arnold made applies here, too. A program that gets you into a house at the edge of your budget can leave you exposed the first time something big breaks. Before you accept assistance to stretch into a purchase, make sure the ongoing payment works on a normal month, not just the month you close. Our home affordability calculator can help you pressure-test the real monthly number, and if you're looking for ways to bring cash back to the table, home buyer rebates are worth a look.

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