Forgivable Grant Programs for Your Down Payment

A forgivable grant is almost always a loan in disguise. It is a second mortgage that is written off if you live in the home for a set number of years, and you repay part or all of it if you sell or move out sooner. Down Payment Resource's count of 2,746 programs as of July 1, 2026 found that only 9% are pure grants and 56% are second mortgages, so ask every program below how long you have to stay. The seven sources are ordered by how many programs each runs, largest first. Lender and corporate grants, which that count does not size, come last.

Municipalities run 39% of all programs (1,068), more than any other source. Their programs also tend to be the largest.

New York City's HomeFirst program lends up to $100,000 as a forgivable loan. The terms:

• Forgiveness: loans of $40,000 or less are forgiven after 10 years of owner-occupancy. Larger loans, and all city-funded loans of any size, need 15 years.
• Income limits: effective June 1, 2026, the limits reach 120% of area median income. That is $142,560 for one person and $203,520 for a household of four.
• Your own money: you still put in at least 3% from your own funds.
• Before you buy: you take an HPD-approved homebuyer course, work with an HPD-approved counseling agency, and the property must pass a Housing Quality Standards inspection.

Smaller cities now reach higher earners than they used to.

• Elk Grove, California approved a program on September 24, 2026. It lends up to $60,000 at 3% interest and forgives the loan after 10 years. It covers households at 81% to 120% of AMI, which is $73,600 to $104,150 for one person. Initial funding covers about six buyers, and the program is expected to launch at the end of 2026 (Abridged).
• Danville, Virginia launched up to $5,000 on September 1, 2026 for households at 81% to 95% of AMI.

If you expect to move within 10 years, these programs are the wrong fit.

Nonprofits run 22% of programs (601). This is the source most likely to help you if you earn too much for government programs, but read the loan terms closely, because many of these are not forgivable.

• One Roof Community Housing lends the lesser of 18% of the price or $40,000, at a minimum 5.5% interest rate. It has no income limit and no first-time buyer rule. That is a repayable loan, not a grant.
• Movin' Out in Wisconsin offers a 0% deferred second mortgage to households with a permanently disabled member, capped at 80% AMI. It is due when you sell or transfer the home.

HUD's state pages list nonprofit options, such as Habitat for Humanity affiliates and GROW SD, next to the state agency programs.

State agencies run 18% of programs (485). Their terms vary more than any other source, so compare the repayment trigger, not just the dollar figure. The figures below come from The Mortgage Reports' state guide and from IHDA's launch announcement.

California's 2026 lottery window ran from February 24 to March 16, so it has already closed. IHDAccess Home requires homeownership counseling and is offered through more than 160 participating lenders.

Down Payment Resource counts 209 programs aimed at specific groups. The largest groups are:

• educators: 75 programs
• veterans: 54
• law enforcement and first responders: 51
• firefighters: 46
• military borrowers: 40

The most useful version converts to a grant if you keep doing the job. Mississippi's Employer-Assisted Housing Teacher Program lends up to $6,000 toward closing costs, and the loan becomes a full grant after three years of teaching in an underserved area (NerdWallet). Washington, D.C.'s EAHP gives first responders and educators up to $10,000 as a recoverable grant, plus a $15,000 matching grant.

Not every hero program is forgivable. Florida's Hometown Heroes lends up to $35,000 as a 30-year no-interest loan, and you repay that loan.

Local housing finance agencies run 8% of programs (207), and HUD money funds many more county programs. HUD does not give grants directly to buyers. It funds states and localities through:

• HOME Investment Partnerships: down payment help has always been an eligible use of these funds.
• The Housing Trust Fund: a state can spend up to 10% of its allocation on first-time buyer assistance.

Two things follow for you:

• Since 2013, HOME-funded assistance has required pre-purchase counseling.
• HUD does not track each local program's income limits or forgiveness terms, so you have to ask the program directly.

To find these programs, start at HUD's directory, which points to state and county listings at hud.gov/states. HUD names a HUD-approved housing counseling agency as the best first stop.

Tribal organizations run 56 programs, and 58 programs target Native American buyers. The Native American Homeownership Initiative from the Federal Home Loan Bank of Des Moines is the largest named one in this research.

• Who qualifies: Native American, Alaska Native and Native Hawaiian buyers purchasing within the bank's district. Related research puts the income limit at generally 80% of AMI or below, so confirm it with the lender.
• How much: up to $25,000 per household.
• How to apply: you apply through a participating member lender, not the bank. The lender completes three steps on eAdvantage DP Online: Get Started, Reservation of Funds, and Disbursement/Reimbursement.
• The condition: a five-year deed restriction. If you sell before it ends, you repay a portion of the grant.

NAHI and the related HomeStart program have together awarded $172.7 million to more than 34,375 families.

These are true gifts, but they are small and tied to one lender or one application cycle.

• Flagstar's Gift Program gives a credit of up to $7,500 in most areas, and up to $15,000 in Arizona, California, New Jersey and New York. Because the credit only comes with Flagstar's loan, compare that loan against other lenders before you treat the $7,500 as savings.
• Progressive's UpPayment, run by the National Urban League, offered up to $13,500 to at least 200 buyers. Applications closed September 30, 2026, and the program page lists no reopening date.

Ask your HR department about employer-assisted housing benefits before you assume none exist.

Start with a HUD-approved housing counselor. HomeFirst, IHDAccess Home and every HOME-funded program require counseling anyway, so the session doubles as a search across the city, county and state sources at the top of this list. On average, assistance cuts your loan-to-value ratio by 8.8%.

Most of these programs reach you through a participating lender, so the step after counseling is knowing what you can borrow. Then you can match the first mortgage to the program that pairs with it.