First-time homebuyer programs are having a moment.
Nearly every state housing agency, dozens of cities, and a growing pile of private lenders are pushing grants, forgivable loans, and low-rate mortgages at people who have never owned a home.
The pitch sounds like free money in a market where the median existing-home price is still hovering near $400,000.
Here's the catch nobody puts in the headline: most of these programs come with strings, and the strings vary wildly depending on where you live and who is holding the note.
Take down payment assistance grants that are actually second mortgages.
You might get $25,000 toward your down payment, but it could sit as a silent lien on the house at 0% interest, forgiven only after you stay put for five, ten, or even fifteen years.
Sell or refinance early and you may owe a chunk of it back.
It's also not the freebie the ad implies.
Many programs cap eligibility at 80% to 120% of your area's median income.
In a high-cost metro, that ceiling can feel generous.
In a cheaper market, a household earning two solid salaries may blow past it without realizing.
Some programs also restrict the purchase price of the home, which rules out most new construction in hot neighborhoods.
But also the housing agencies that need to hit lending targets, the lenders who earn fees on the first mortgage, and the real estate agents who close a sale.
It just means you should read them like a contract, because they are one.
The practical move is to compare at least three sources before you commit: your state housing finance agency, your city or county program, and any lender-specific offer.
Does it count against my debt-to-income ratio?
One more thing to watch: some programs require you to complete a homebuyer education course, often eight hours, sometimes in person.
That's a minor hassle, but it can also save you from a bad loan.
A few lenders quietly steer buyers toward their own assistance product instead of a cheaper state program, so always cross-check the state agency's website yourself rather than trusting a single loan officer's summary.
Our take: these programs are one of the few genuine breaks available to buyers who don't have family money, and they're worth an afternoon of paperwork.
Final Thoughts
But treat every dollar as a conditional loan until you've read the recapture rules, because the real cost of "free" down payment help shows up the day you try to move.