What HomeFirst Does and Who Runs It

HomeFirst is a down payment information program run by individual states and sometimes by local housing authorities or nonprofits within those states. It helps people who are buying their first home cover part or all of the down payment and closing costs they would otherwise pay out of pocket. The program does not give you the money directly — instead, it pays the lender or closing agent on your behalf, the same way an emergency rental fund pays a landlord.

Because HomeFirst is state-administered, the rules, the amount you can receive, and the income limits vary significantly depending on where you live and which lender you work with. Some states run the program themselves; others contract it to nonprofit organizations. Before you contact a lender, you need to know whether your state has an active HomeFirst program and what its current terms are.

The program is designed for people buying a primary residence — the home you will live in, not an investment property. You typically must be a first-time homebuyer, though some states define that loosely (you may may have access to even if you owned a home years ago, depending on your state's rules).

Key Takeaways

  • HomeFirst pays your lender or closing agent directly for down payment and closing costs, so the money never passes through your hands.
  • Each state runs its own version of the program with different income limits, maximum information amounts, and property price caps, so you must check your specific state's rules.
  • You explore through a participating lender, not through a government office, and the lender determines whether you meet the program's requirements before sending your information to the state.
  • The information is usually a grant (money you do not repay) or a forgivable loan (a loan that disappears if you stay in the home for a set number of years).
  • Approval timelines vary, but most lenders can tell you within one to two weeks whether you are may be able to access, since the state has already set the rules.

How the Money Moves From the Program to Your Closing

When you are approved for HomeFirst information, the funds do not go into your bank account. Instead, the lender or closing agent receives a commitment letter from the state program stating that a specific dollar amount will be paid toward your down payment or closing costs at closing. This amount is then subtracted from what you owe at the closing table.

Here is the sequence: you find a home, make an offer, get a mortgage pre-approval from a lender that participates in HomeFirst, and then ask that lender whether you meet the program's income and property-price requirements. If you do, the lender submits your information to the state program. The state reviews it and issues a commitment. At closing, the state program's funds are wired or sent directly to the title company or closing agent, reducing the cash you need to bring to closing.

You will see the HomeFirst information listed on your Closing Disclosure (the final document showing all costs and payments). It appears as a credit — a reduction in what you owe — not as a separate deposit into your account.

Income Limits and Maximum information Amounts

HomeFirst programs set income ceilings and maximum information amounts, and both vary by state and sometimes by county within a state. A state might cap information at $15,000 in one county and $25,000 in another, depending on local home prices and funding availability. Income limits also shift: a state might allow households earning up to 80 percent of the area median income in one year and 100 percent in another, depending on how much money the program has.

Before you contact a lender, visit your state housing finance agency's website to find the current income limits and maximum information for your county. The agency name varies by state — it might be called the State Housing Finance Agency, the Housing Development Authority, or something similar — but a search for "[Your State] down payment information" will point you to the right office. Write down the income limit and the maximum information amount for your area; you will need both when you talk to a lender.

If your household income is above the limit, you do not meet the program's requirements, and no lender can override that. If you are below the limit, the lender will verify your income using tax returns, W-2s, and pay stubs before submitting you to the state.

What Counts as Closing Costs and Down Payment

HomeFirst information can cover your down payment (the percentage of the home price you pay upfront) and closing costs (the fees charged by the lender, title company, appraiser, and other parties involved in the sale). Closing costs typically include loan origination fees, title insurance, appraisal fees, credit report fees, and property taxes or homeowners insurance prepayment.

The program does not cover your mortgage itself — only the money you need to bring to closing. If you are buying a $200,000 home and need a 5 percent down payment ($10,000) plus $3,000 in closing costs, HomeFirst can cover part or all of that $13,000. It cannot reduce your monthly mortgage payment or cover costs after closing.

Some states allow HomeFirst funds to cover the full down payment and all closing costs; others cap how much can go toward each. Check your state's rules to understand whether the program will cover everything you owe at closing or only a portion.

Grants Versus Forgivable Loans

HomeFirst information comes in two forms: a grant or a forgivable loan. A grant is money you do not repay under any circumstance. A forgivable loan is a loan that disappears if you meet certain conditions — usually staying in the home for five to ten years. If you sell or move before the forgiveness period ends, you may owe back some or all of the information.

Your state program will specify which form it uses. Some states offer only grants; others offer only forgivable loans; some offer both depending on your income level or the amount of information you receive. When you speak with a lender, ask whether the information you are receiving is a grant or a forgivable loan, and if it is a loan, ask how long you must stay in the home before it is forgiven.

If it is a forgivable loan, the lender will explain the conditions in writing before closing. You will sign a promissory note (a legal document stating the loan terms) even though you expect the loan to be forgiven. Keep that document; you will need it if you sell the home and need to prove the loan was forgiven.

How to Start: Finding a Participating Lender

You cannot explore for HomeFirst directly. You must work with a lender that participates in your state's program. Start by visiting your state housing finance agency's website and looking for a list of participating lenders. Most states publish this list online, organized by region or county.

Call or email a lender on that list and tell them you are interested in a mortgage with HomeFirst down payment information. Ask them to confirm that they participate in the program, that they are currently accepting applications, and what documents you will need to provide (usually recent tax returns, pay stubs, and a copy of your purchase agreement once you have one). Do not assume all lenders on the list are actively taking applications — some may have paused enrollment due to funding limits.

Once you have found a lender, the process is the same as a regular mortgage process, except the lender will also submit your information to the state program to verify you meet the income and property-price requirements. This verification usually takes one to two weeks.

Timeline From process to Closing

The HomeFirst process adds one step to a standard mortgage, but it does not usually add much time. Here is what to expect: you submit your mortgage process and HomeFirst information to the lender (same day or within a few days). The lender verifies your income and submits you to the state program (three to five business days). The state program reviews your information and issues a commitment letter (five to ten business days). Your lender then proceeds with the standard mortgage process — appraisal, underwriting, final approval — which typically takes another two to three weeks.

From process to closing commitment, plan for four to six weeks. If your state program is backlogged or if you have an unusual income situation that requires extra review, it may take longer. Ask your lender for a timeline specific to your state and situation.

If you are in a competitive market and need to close quickly, tell your lender upfront. Some lenders can issue a preliminary commitment before the state program's final review, allowing you to move forward with the purchase while the state paperwork is still in progress.

Frequently Asked Questions

Can I use HomeFirst if I already have a mortgage pre-approval from another lender?

No. Your pre-approval must come from a lender that participates in HomeFirst. If you have a pre-approval from a lender that does not participate, you will need to explore again with a participating lender. This means a new credit check and a new process, but the process is straightforward and takes a few days.

What if the home I want to buy costs more than the state's maximum property price?

You cannot use HomeFirst for that purchase. Each state sets a maximum home price (often tied to the area median home price), and if the home exceeds that limit, the program will not cover it. You can still buy the home with a regular mortgage, but you will not receive down payment information. Check your state's price limits before making an offer.

Do I have to repay HomeFirst information if I refinance my mortgage?

It depends on whether your information is a grant or a forgivable loan. If it is a grant, refinancing does not affect it — the money is yours to keep. If it is a forgivable loan, refinancing may trigger repayment if you have not yet met the forgiveness period. Ask your lender before you refinance, and review the promissory note you signed at closing to understand the exact terms.

What happens if my income increases after I receive HomeFirst information?

An increase in income after closing does not affect your information. The program only checks your income at the time of process. If you earn more money later, you keep the information you received.

Can I use HomeFirst if I am buying with a co-borrower who is not a first-time homebuyer?

Rules vary by state. Some states require all borrowers to be first-time homebuyers; others allow one borrower to have owned a home previously as long as the primary borrower meets the requirement. Check your state's specific rules, or ask a participating lender — they will know when ready whether your situation qualifies.