What is the $25,000 First-Time Home Buyer Grant?

Is the government really going to help you buy your first home? Here’s everything you need to know about the $25,000 first-time home buyer grant application. How it works, who qualifies, and whether you can apply yet.

What is the $25,000 First-Time Home Buyer Grant?

The Downpayment Toward Equity Act of 2024 is a proposed federal program that would give qualifying buyers up to $25,000 in cash assistance toward the purchase of their first home. The goal of this bill is to make homeownership more accessible, especially for first-generation homebuyers who have historically faced barriers in building generational wealth through real estate.

The $25,000 grant would help cover down payments, closing costs, and other upfront expenses that often keep people from being able to buy. These costs are some of the biggest obstacles to homeownership, particularly for renters already managing student loans, childcare, and rising rent payments.

If passed, the program could open the door for thousands of families to make the jump from renting to owning. So, has the $25k first-time home buyer bill passed?

Has The $25,000 First-Time Home Buyer Grant Passed?

Not yet. The $25,000 first-time home buyer grant has not passed into law. Currently, there’s no official application process because the legislation is still pending.

The bill was introduced in March 2024 by Senator Raphael Warnock of Georgia and referred to the United States Senate Committee on Banking, Housing, and Urban Affairs for review. Since its introduction, the proposal hasn’t seen further committee action, voting, or passage into law.

Because the bill originated under the Biden administration, housing policy experts have said it’s unlikely to move forward during the current Trump administration, which has taken a different approach to housing affordability and federal assistance programs.

Many states and local agencies already offer grants, low-interest loans, and savings programs to help renters make the leap into owning a home.

Who Is Eligible For The Downpayment Toward Equity Act Grant?

If the Downpayment Toward Equity Act eventually becomes law, these are the expected eligibility requirements for the $25,000 grant. Keep in mind that all homebuyers listed on the mortgage would need to meet these criteria:

• You must be a first-generation homebuyer
• Your income must be below 120% of the Area Median Income (AMI) for your location
• In high-cost-of-living areas, the limit increases to 140% of the AMI
• The property you purchase must be used as your primary residence
• You must live in the home for at least 5 years
• You’ll be required to complete a housing counseling course approved by HUD or a similar agency
• You must use an eligible mortgage type (FHA, VA, USDA, or conventional loan)

These requirements are designed to ensure that the funds go to those who truly need them – not investors or repeat buyers.

Source: https://www.congress.gov/bill/118th-congress/senate-bill/3930/text

Who Qualifies As A First Generation Homebuyer?

You’ll qualify as a first generation homebuyer if:

• You haven’t owned a property within the last 3 years
• Your parents don’t own a property (or did not own property at the time of their death)
• Your spouse or partner hasn’t owned a property within the last 3 years

Inherited property doesn’t count against you. If you inherited a home but never purchased one yourself, you can still qualify.

How To Apply For The Downpayment Toward Equity Act?

Unfortunately, you can’t apply yet. The Downpayment Toward Equity Act is still pending in Congress, and until it passes both chambers and is signed into law, no official application or funding process exists.

If and when the program becomes active, applications would likely be handled through approved mortgage lenders or state housing agencies, similar to other down payment assistance programs.

Applicants would need to provide income documentation, complete housing counseling, and meet first-generation criteria before receiving the funds.

Financial Assistance Programs Available Now

While the $25,000 grant isn’t available yet, there are other programs you can apply for today that make buying your first home more affordable. These programs vary by state, so speaking with a local mortgage advisor or housing counselor is the best way to find options near you.

Down Payment Assistance (DPA) Grants & Forgivable Loans

DPA programs provide grants or low-interest “silent second” loans to help buyers with their down payment and closing costs. Some programs don’t require repayment at all, while others are forgivable over time, usually after you’ve lived in the home for a certain number of years.

This type of assistance can easily save you thousands of dollars upfront and make homeownership possible even if your savings are limited.

Deferred-Payment Mortgage (Zero Interest)

A deferred-payment mortgage acts as a second loan that covers your down payment but doesn’t require any monthly payments. Instead, you pay it back later when you sell your home, refinance, or finish paying off your first mortgage.

It’s a helpful option for buyers who can afford the monthly mortgage payment but need temporary help covering the initial purchase costs.

Individual Development Accounts (IDAs) And Matched Savings Programs

Individual Development Accounts (IDAs) are special savings accounts that match the money you deposit. Sometimes dollar-for-dollar or even more.

For example, if your local program offers a 3:1 match, and you deposit $2,000, the sponsoring organization adds another $6,000, giving you $8,000 total toward your down payment.

To qualify for an IDA, you’ll typically need to:

• Have an income below 200% of the federal poverty level for your household size
• Be employed and maintain regular deposits
• Have less than $10,000 in total assets, excluding your primary vehicle and home
• Complete a financial literacy or budgeting course

These programs are often offered through nonprofit housing organizations and community credit unions, so check with local agencies or your city’s housing department to find out what’s available.

Related: Who Qualifies For The Free $10,000 Home Improvement Grant?