2027 First-Time Home Buyer Programs: New State Grants, DPA & Tax-Free Savings
Three major new first-time homebuyer programs take effect January 1, 2027: Nebraska's tax-free savings accounts (up to $50K), Tennessee's $20,000 down payment assistance, and Minnesota's $32,000 first-generation grants. Plus all existing federal programs (FHA, VA, USDA) and 50-state DPA programs. Here is everything you need to know — and how to claim your benefits.
No SSN required • All 50 states • 2 minutes
Quick Summary: What's New for 2027
3 new state programs launching January 1, 2027: Nebraska (tax-free savings up to $50K), Tennessee ($20K DPA), Minnesota ($32K first-gen DPA).
Existing federal programs continue: FHA (3.5% down), VA ($0 down), USDA ($0 down), HomeReady/Home Possible (3% down), FHLBank HSP ($15K grant).
Best action now: If you plan to buy in 2027, start preparing today — improve your credit, save for down payment, and check which programs you qualify for →
3 Brand-New Programs Launching January 1, 2027
These programs were passed into law in 2026 and take effect January 1, 2027. If you live in one of these states, you could receive $20,000-$50,000 in assistance. Check all down payment assistance programs →
First-Time Homebuyer Savings Account
Max benefit: $50,000 (couples) / $25,000 (individual)
Type: Tax-free savings account
How it works:
Contributions up to $5,000/year ($10K couples) fully deductible from state income tax. Earnings grow tax-free. Funds can be used for down payment, closing costs, appraisal, inspection, and origination fees. Funds can remain indefinitely without penalty.
Eligibility:
First-time homebuyer (never owned a primary residence, or not on a title for 3+ years after divorce). Must purchase or build a primary residence in Nebraska.
First-Time Homebuyer Assistance Program
Max benefit: $20,000
Type: Down payment + closing cost + rate reduction grant
How it works:
Up to $20,000 per first-time homebuyer for down payment, closing costs, or permanent interest rate reduction. Administered by THDA. Recipient must not receive a direct payout at closing. If home is sold or refinanced before end of loan term, repayment required (lesser of assistance amount or 50% of equity). THDA can adjust max purchase price annually.
Eligibility:
First-time homebuyer as defined by THDA. Subject to appropriations by the Tennessee General Assembly. Max purchase price set by THDA, adjustable annually by property type and location.
First-Generation Homebuyers Down Payment Assistance
Max benefit: $32,000 (10% of purchase price)
Type: Down payment assistance grant
How it works:
Up to 10% of purchase price, max $32,000. $50M appropriated for FY2027, increasing to $100M in subsequent years. Administered by MMCDC. Starting FY2027, max assistance may increase to 10% of median home sales price per Minnesota Realtors report. Available statewide through MMCDC and partner CDFIs, Tribal entities, and nonprofits.
Eligibility:
First-generation homebuyer (neither buyer nor parents have ever owned a home). Income at or below program limits. Must complete homebuyer education.
See Every First-Time Buyer Program You Qualify For
Grants, forgivable loans, tax credits, and zero-down programs — all matched to your location, income, and credit profile. Free, 2 minutes, no SSN.
Free • No SSN • All 50 states • 2 minutes
Federal First-Time Home Buyer Programs (Available Now)
These federal programs are available in all 50 states and do not require waiting for 2027. If you are ready to buy now, these are your best options. Get pre-approved for FHA →
| Program | Down Payment | Min Credit Score | Max DTI | Key Benefit |
|---|---|---|---|---|
| FHA Loan | 3.5% | 580+ | 50% | Lowest credit score requirement, most flexible qualification |
| VA Loan | 0% | 580-620+ | 41-50% | No down payment, no PMI, for veterans and active military |
| USDA Loan | 0% | 640+ | 41% | No down payment in eligible rural/suburban areas |
| Fannie Mae HomeReady | 3% | 620+ | 50% | Below-market rates, cancellable PMI, income limit 80% AMI |
| Freddie Mac Home Possible | 3% | 660+ | 50% | Reduced mortgage insurance, income limit 80% AMI |
| FHLBank HSP | Up to $15,000 grant | Varies | Varies | Down payment grant for borrowers at or below 80% AMI |
| Good Neighbor Next Door | $100 down | FHA min | FHA max | 50% off home price for teachers, firefighters, EMTs, police in revitalization areas |
| Section 184 (Native American) | 2.25% | Varies | 41% | For enrolled tribal members, lower down payment than FHA |
FHA 2027 budget: The FHA has requested $400 billion in loan guarantee commitment authority for fiscal year 2027, with $284 billion projected for forward mortgages and $15.4 billion for HECM (reverse) mortgages. This means FHA lending capacity will remain robust through 2027. Get pre-approved today →
State Down Payment Assistance Programs (Top 8)
Every state has at least one DPA program. Here are the most generous ones. These programs are available NOW — you do not need to wait for 2027. See all programs in your state →
| State (Agency) | Max DPA | Program Name | Key Details |
|---|---|---|---|
| California (CalHFA) | $120,000+ | Dream For All Shared Appreciation | Up to 20% of purchase price, no monthly payments |
| Texas (TSAHC) | $25,000 | Home Sweet Texas | Grants up to 5% of loan amount, forgivable over 3 years |
| Florida | $35,000 | Florida Hometown Heroes | Up to 5% of loan amount, for workforce heroes |
| New York (SONYMA) | $15,000 | Achieving the Dream | Low interest rate + DPA, forgivable over 10 years |
| Illinois (IHDA) | $10,000 | 1stHomeIllinois | $10,000 forgivable over 5 years, in targeted counties |
| North Carolina (NCHFA) | $8,000 | NC Home Advantage | Forgivable over 15 years, plus tax credit up to $2,000/yr |
| Georgia (DCA) | $7,500 | Georgia Dream | Forgivable over 5 years, plus $500 for veterans |
| Washington (WSHFC) | $10,000 | Home Advantage DPA | Second mortgage, deferred payments, forgivable over 30 years |
California CalHFA Dream For All is the most generous
Up to 20% of the purchase price as a shared appreciation loan — no monthly payments, no interest. On a $600K home, that is $120,000 in free down payment money. You repay the same percentage of appreciation when you sell or refinance. Compare lender rates for DPA programs →
How to Prepare Now for 2027 Programs
The new 2027 programs have specific eligibility requirements. Here is what you should do NOW to maximize your chances of qualifying:
1. Check if you qualify as a "first-time homebuyer"
Most programs define this as not having owned a primary residence in the past 3 years. Nebraska requires never having owned a home (or 3+ years off a title after divorce). Minnesota's first-gen program requires neither you nor your parents have ever owned. Check your eligibility →
2. Improve your credit score to 640+ (ideally 680+)
Most DPA programs require a 640+ credit score. FHA allows 580+, but combining with DPA programs typically needs 640+. Higher scores get better rates. Check FHA pre-approval options →
3. Save for closing costs (even if DPA covers down payment)
Even with full DPA, you will need 1-3% of the purchase price for closing costs, inspection, and reserves. Start saving now — Nebraska's new tax-free savings account can help if you live there. Explore DPA programs →
4. Complete a homebuyer education course
Most DPA programs require completion of an approved homebuyer education course (4-8 hours, online or in-person, $50-$150). Complete this before applying — it speeds up the process.
5. Get pre-approved with a DPA-friendly lender
Not all lenders work with all DPA programs. You need a lender approved by your state's housing finance agency. Get pre-approved with DPA-friendly lenders →
Nebraska First-Time Homebuyer Savings Account: Deep Dive
Nebraska's program is unique — it is a tax-advantaged savings account, not a grant. This means you save your own money but get significant tax benefits. Find first-time buyer programs in your state →
How the Tax Savings Work
Individual Saver
- Contribute $5,000/year for 5 years = $25,000
- State tax deduction: $5,000/year x 3.99% top rate = $199.50/year
- Total tax savings over 5 years: ~$997
- Account earns 3% interest = ~$1,890 in earnings
- Earnings grow state tax-free = save ~$75 on earnings tax
- Total benefit: ~$1,872 in tax savings + tax-free growth
Married Couple (Max Saver)
- Contribute $10,000/year for 5 years = $50,000
- State tax deduction: $10,000/year x 3.99% = $399/year
- Total tax savings over 5 years: ~$1,995
- Account earns 3% interest = ~$3,780 in earnings
- Earnings grow state tax-free = save ~$151 on earnings tax
- Total benefit: ~$3,744 in tax savings + tax-free growth
Important guardrails
Funds withdrawn less than 1 year after the first deposit are subject to tax recapture. Funds used for non-eligible purposes face recapture + additional financial penalties. The account can remain open indefinitely without penalty if you meet eligibility requirements — so even if you don't buy immediately, your savings grow tax-free.
Tennessee $20,000 DPA: Deep Dive
Tennessee's program is one of the most generous DPA grants in the country. Here is what makes it special:
What makes it unique
- • Funds can be used for down payment, closing costs, OR permanent rate reduction — most programs only cover down payment
- • Up to $20,000 — among the highest DPA amounts nationally
- • THDA can adjust max purchase price annually by location and property type
- • No direct payout at closing — funds go directly to the transaction
Repayment rules
- • If you sell or refinance before end of original loan term: repay lesser of (a) assistance amount or (b) 50% of home equity
- • Refinancing with a new qualifying mortgage that resubordinates the DPA loan = no repayment required
- • Repaid funds go back into the program for future homebuyers
- • THDA uses up to 5% of program funds for administration
Estimated impact: The fiscal note estimates 2,543 first-time homebuyers will receive the maximum $20,000 each year, totaling $50.86M in annual distributions. If you are a Tennessee first-time buyer, this is essentially free money toward your home purchase. Compare lenders that work with THDA →
Minnesota First-Generation Homebuyers: Deep Dive
Minnesota's program is the first of its kind — specifically targeting first-generation homebuyers whose parents never owned a home. This addresses the generational wealth gap in homeownership.
Program Details
- • Max assistance: 10% of purchase price, up to $32,000
- • Funding: $25M in FY2026, $50M in FY2027, $100M+ in subsequent years
- • Administrator: MMCDC (Midwest Minnesota Community Development Corporation)
- • Available: Statewide through MMCDC + partner CDFIs, Tribal entities, and nonprofits
- • Future increase: Starting FY2027, max may increase to 10% of median home sales price per Minnesota Realtors report
- • Eligibility: First-generation homebuyer (neither buyer nor parents ever owned a home)
Why this program matters
The homeownership gap between first-generation and continuing-generation buyers is stark. Only 25% of first-generation buyers own homes vs 65% of continuing-generation. This $50M investment in FY2027 is designed to close that gap by providing meaningful down payment assistance to families who have never had the generational advantage of homeownership.
Frequently Asked Questions
What new first-time home buyer programs launch in 2027?
How does the Nebraska First-Time Homebuyer Savings Account work?
How much can I get from the Tennessee First-Time Homebuyer Assistance Program?
What is the Minnesota First-Generation Homebuyers program?
What federal programs are available for first-time home buyers in 2027?
Am I considered a first-time homebuyer?
Find every program you qualify for
New 2027 programs + existing federal and state programs — all matched to your profile. Free, 2 minutes, no SSN required. Up to $120,000 in assistance.
Find My Programs →Related Home Buying Guides
Find Every First-Time Buyer Program You Qualify For
New 2027 programs + existing federal and state programs — all matched to your profile. Free, 2 minutes, no SSN required. Up to $120,000 in assistance available.
Free • No SSN • All 50 states • 2 minutes