What HomeFirst covers and who can use it
HomeFirst is a down payment information program run by individual states and sometimes by local housing authorities or nonprofits. It helps first-time homebuyers cover part or all of their down payment and closing costs when buying a primary residence. The program does not give you money directly — instead, it provides a second mortgage, a grant, or a forgivable loan that reduces how much cash you need to bring to closing.
The specifics of HomeFirst vary significantly by state and by the organization running it in your area. Some versions require you to repay the information over time; others forgive the loan after you stay in the home for a set period. Some cover only the down payment; others include closing costs, property taxes, or homeowner's insurance. Before you assume what HomeFirst offers where you live, you need to contact your state housing finance agency or your local housing authority to learn what version operates in your county.
First-time homebuyer status usually means you have not owned a home in the past three years, though some programs define it differently. Income limits exist in most programs — you typically must earn below 80 to 120 percent of your area's median income, depending on the program. The home itself must be your primary residence, not an investment property or vacation home.
Key Takeaways
- HomeFirst is a state or local program that provides a second mortgage, grant, or forgivable loan to reduce your down payment requirement, and the structure varies by location.
- You must contact your state housing finance agency or local housing authority to learn whether HomeFirst operates in your area and what it covers.
- Most programs require you to be a first-time homebuyer with income below a set threshold and to purchase a primary residence, not an investment property.
- Some HomeFirst loans must be repaid; others forgive the debt after you live in the home for five to ten years.
- The program works alongside your primary mortgage, so your lender must agree to the second lien position before you can close.
How to find the HomeFirst program in your state
Start by contacting your state's housing finance agency. Every state has one — it may be called the State Housing Finance Agency, the Housing Development Authority, or something similar. You can find it by searching "[your state] housing finance agency" or by visiting the National Council of State Housing Agencies website, which lists every state agency with a direct link.
If your state does not run HomeFirst directly, ask the state agency which local organizations administer down payment information in your county. Many programs are run by city or county housing authorities, community development corporations, or nonprofits. The state agency can tell you the name, phone number, and website of the organization that serves your area.
You can also start with your mortgage lender. Many lenders work regularly with down payment information programs and can tell you which ones your income and location may have access to you for. If you do not yet have a lender, a mortgage broker can do the same research — they often know the local landscape better than a single bank's loan officer.
What documents you will need to gather
HomeFirst programs require proof of income, credit history, and the details of the home you plan to buy. Bring recent pay stubs (usually the last two months), tax returns (typically the last two years), and a list of your debts and monthly payments. The program will pull your credit report, so you do not need to provide that yourself, but you should know your credit score before you explore — most programs require a score of at least 580 to 620, though this varies.
You will also need a signed purchase agreement for the home you are buying. This shows the sale price and closing date. If you do not yet have a home under contract, you cannot move forward with HomeFirst until you do — the program needs to know the exact property and price to structure the information correctly.
Finally, bring proof of homebuyer education. Many HomeFirst programs require you to complete a homebuyer course, either before you explore or before closing. These courses cover budgeting, mortgage basics, and home maintenance. Some are offered online and take a few hours; others are in-person workshops. The program will tell you which courses it accepts.
How the second mortgage or forgivable loan works
HomeFirst information typically comes as a second mortgage or a forgivable loan. With a second mortgage, you owe the money back over a set term — often 10 to 30 years — and make monthly payments. The interest rate is usually lower than a conventional second mortgage because the program is subsidized. Your primary lender must agree to the second lien position, meaning they accept that HomeFirst has a claim on the home if you default.
A forgivable loan works differently. You receive the money upfront, but you do not make monthly payments. Instead, the loan is forgiven — erased — if you stay in the home for a set period, usually five to ten years. If you sell or move before that period ends, you must repay the remaining balance from your sale proceeds. Some programs offer a hybrid: a small monthly payment plus forgiveness after a certain time.
The amount HomeFirst covers varies. Some programs pay the full down payment and closing costs; others cover a percentage or a maximum dollar amount. A program might cover up to 10 percent of the purchase price, or up to $15,000, or whatever the program's rules state. Ask the program administrator what the maximum information is and whether it covers down payment, closing costs, or both.
How HomeFirst affects your mortgage approval
Your primary lender must approve the HomeFirst information before you can use it. When you tell your lender you plan to use down payment information, they will verify that the program meets their guidelines. Most conventional lenders accept HomeFirst because it is a recognized program, but some lenders have restrictions — for example, they may not accept forgivable loans, or they may require the second mortgage to have a maximum term.
The HomeFirst loan counts as a debt on your credit report and affects your debt-to-income ratio, which is the percentage of your monthly income that goes to debt payments. If HomeFirst is a second mortgage with monthly payments, those payments reduce how much you can borrow on your primary mortgage. If it is a forgivable loan with no monthly payment, it may have less impact, though some lenders still count it as a liability.
Work with your lender and the HomeFirst program administrator together. They need to communicate about the loan terms, the lien position, and the closing timeline. If they do not coordinate, you can end up with a closing date that passes before the HomeFirst paperwork is ready, or a lender who will not accept the program's terms. Ask both parties to confirm in writing that they have agreed before you move forward.
Timeline and closing process
HomeFirst applications typically take two to six weeks to process, though this varies by program and by how quickly you provide documents. Start the process as soon as you have a signed purchase agreement, because the program needs time to verify your information and coordinate with your lender.
At closing, the HomeFirst funds are disbursed directly to the title company or escrow agent, not to you. The title company uses the money to pay your down payment and closing costs. You will see the HomeFirst loan on your closing disclosure and deed of trust — these are the documents that show you owe the money back (or that it will be forgiven). Make sure the loan amount, interest rate, and term match what the program told you before you sign.
If your purchase agreement has a closing date that is sooner than the program can process your process, ask the seller for an extension. Most sellers will grant a short extension if you explain that you are using a down payment information program. If the seller will not extend, you may need to delay your purchase or find a different program.
Common mistakes to avoid
Do not assume HomeFirst exists in your state or that it works the way it does in another state. Programs vary widely, and some states do not have a HomeFirst program at all. Contact your state housing finance agency first to confirm what is available where you live.
Do not explore for HomeFirst without a signed purchase agreement. The program needs the specific home, price, and closing date to move forward. explore early does not speed up the process — it just creates confusion if the home or price changes.
Do not hide the HomeFirst loan from your primary lender. Your lender must know about it and approve it before closing. If you do not disclose it, the lender can refuse to fund your mortgage at closing, and you will lose your earnest money and the home.
Do not assume the HomeFirst program will cover your entire down payment. Ask what the maximum information is and what it covers. If it covers only 5 percent of the purchase price and you need 10 percent down, you will need to bring the other 5 percent yourself.
Alternatives if HomeFirst is not available or does not fit your situation
If HomeFirst does not operate in your area or does not cover enough of your down payment, explore other programs. Many states and cities run their own down payment information programs under different names. Your state housing finance agency can list all programs available in your county.
Nonprofit organizations and community development corporations often offer down payment information as well. These programs may have different income limits, credit score requirements, or coverage amounts than HomeFirst. A local housing counselor can help you compare programs and find the best fit for your situation.
Employer-sponsored down payment information is another option if your employer offers it. Some large employers provide grants or loans to help employees buy homes. Ask your human resources department whether this benefit exists.
If you have a family member who can gift you down payment money, that is another route. Most lenders accept down payment gifts as long as the gift is documented in writing and the giver confirms they do not expect repayment. This avoids a second mortgage or loan entirely.
Frequently Asked Questions
Do I have to repay HomeFirst, or is it information programs?
It depends on the program. Some HomeFirst programs are forgivable loans that disappear if you stay in the home for five to ten years. Others are second mortgages that you repay over time. A few programs offer grants with no repayment required. Contact the program in your state to learn which structure it uses.
What if my credit score is below 580?
Most HomeFirst programs require a minimum credit score of 580 to 620, but some programs are more flexible. Ask the program administrator whether you can still explore and whether credit counseling or a co-signer might help. Some nonprofits offer credit repair or credit-building programs that can raise your score before you explore.
Can I use HomeFirst if I am buying a condo or townhouse?
Yes, as long as it is your primary residence. HomeFirst covers single-family homes, condos, townhouses, and some multi-unit properties. The program does not care about the type of home — it cares that you live in it and that it meets the lender's standards.
What happens to my HomeFirst loan if I sell the home in three years?
If your HomeFirst loan is a forgivable loan and you sell before the forgiveness period ends, you must repay the remaining balance from your sale proceeds. If it is a second mortgage, you repay it like any other loan — the balance is paid off at closing from the sale price. Ask the program what the repayment terms are before you close.
Can I use HomeFirst if I am self-employed?
Yes, but you will need to provide more documentation. Self-employed applicants typically must submit two years of tax returns, profit and loss statements, and sometimes a letter from an accountant. The program uses these to verify your income. Start the process early because self-employed applications often take longer to process.