First Time Home Buyer Assistance: Buyers Often Miss Out on Programs
These statistics from Realtor.com are astonishing:
Up to 80% of first-time home buyers qualify for down payment assistance… but only 13% actually use it.
That means many families are missing out on thousands of dollars in help simply because they don’t know what’s available.
If you’re a qualified first-time homebuyer, buying a home could be more affordable than you think!
How Assistance Programs Can Help
Buying a home is daunting in part because of the large down payment and closing costs required. This is where many assistance programs offer relief.
Down Payment Assistance
The traditional figure for a down payment is 20% of the home’s cost, so many people believe they have to save tens of thousands of dollars before they can buy a home. For a $300,000 home, a 20% down payment would be $60,000 — and then there are additional closing costs as well.
But you don’t necessarily have to put down 20% to buy a home.
It is true that a 20% down payment can save you money in the long run, as it typically means you do not have to purchase additional Private Mortgage Insurance (PMI). (Note that you will still need home insurance either way. Securing property insurance is an important step in responsible homeownership, as it helps protect your investment and ensures compliance with financial requirements. However, PMI is an additional insurance your financier will typically require you to buy with a smaller down payment.)
But you can most likely buy a home with less than 20% down!
Some home-buyer programs allow first-time buyers to pay as little as 5%, or even 3% down.
You can also find additional programs that offer down payment assistance in the form of grants or loans. These may be offered as a fixed dollar amount or a percentage of the financed amount, regardless of the amount you put down.
Other Ways to Help
While some programs help with the down payment, other programs assist with the closing costs that a home buyer also has to pay when they close on a home — typically 2% to 5% of the purchase price.
These opportunities can dramatically reduce the time it takes to save and move into a home of your own.
If you’re working with Guidance Residential, ask your Account Executive what options are available to you. You may be surprised at how accessible halal home financing can be when paired with the right assistance programs.
Why Homeownership Matters: Key Benefits for First-Time Buyers
Becoming a homeowner is a milestone that brings a host of benefits, especially for first time homebuyers.
One of the most significant advantages is the opportunity to build equity over time, turning your monthly payment into a long-term investment rather than simply paying rent.
Homeownership also offers a sense of stability and the freedom to personalize your property to fit your lifestyle and needs.
There are also important short-term financial benefits to consider. Homeowners may qualify for tax deductions on mortgage interest and property taxes, which can lead to substantial savings each year. The down payment assistance program can make these benefits more accessible by helping you cover the initial down payment and closing costs, reducing the financial barriers to entry.
With the support of an Account Executive at Guidance Residential, a client can navigate the home purchase process with confidence. For faith-conscious home buyers, Guidance Residential offers Shariah-compliant halal mortgage options that are reviewed and approved by a dedicated Shariah board, ensuring that your home purchase aligns with your values. Additionally, working with a knowledgeable financier means you’ll have expert guidance every step of the way — from pre-approval to closing. Your Account Executive can help you look for assistance programs available to you.
By understanding program requirements and eligibility, you can find options that fit your individual circumstances. By taking advantage of these programs and resources, you can achieve homeownership and enjoy the many benefits it brings, both now and in the future.
Are You Eligible? Understanding Assistance Program Criteria
Before you can take advantage of a down payment assistance program, it’s important to understand the eligibility criteria that determine who can participate.
Many programs are designed specifically for qualified first-time homebuyers who are looking to purchase a principal residence.
First-time homebuyer status is typically defined as one who has not owned a home in the past three years.
Eligibility is often based on other factors as well, such as maximum household income and income limits, which are set to ensure that assistance reaches those who need it most.
Your ability to make a manageable monthly payment is also considered, helping to ensure long-term success as a homeowner.
Participating financiers, including Guidance Residential, play a key role in guiding prospective homebuyers through the process. They can help you review program requirements, gather necessary documentation, and determine if your income and financial situation meet the criteria for the payment assistance program.
If you’re considering a Shariah-compliant mortgage, Guidance Residential offers options that align with your values and are approved by a respected Shariah board. Guidance uses a declining balance co-ownership model, allowing you to gradually increase your ownership stake in the property as you make payments over time.
Reach out to Guidance Residential for more information and for personalized assistance. Taking the time to understand these requirements can help you access valuable assistance and move one step closer to homeownership.
Types of Assistance Programs
There are many types of assistance programs designed to help with home affordability. These programs are designed to help consumers access affordable housing and are often tailored to specific types of properties. Many are available no matter whether you finance your home with a conventional mortgage loan or an alternative like Guidance Residential’s co-ownership program, which is free of riba, or interest.
Here are a few of the most common:
1. State and Local Down Payment Assistance (DPA) Grants
Many states, cities, and counties offer grants to help first-time home buyers with down payments or closing costs. These funds often don’t have to be repaid as long as you meet certain requirements.
These programs are often income-based, meaning they’re specifically designed to support families and individuals who meet certain income thresholds. Eligibility and assistance amounts are determined by factors such as income, location, and program guidelines. Before funds are released, confirmation of eligibility and required documentation is necessary, ensuring all conditions are fully met and validated by the relevant authority.
Some programs target specific professions like teachers, healthcare workers, or first responders.
Here are some examples:
- Central Florida: Orange County offers down payment assistance for first-time home buyers — $10,000 to $70,000, depending on income.
- Texas: The Texas State Affordable Housing Corporation (TSAHC) offers up to 5% of the mortgage amount in down payment assistance for eligible buyers. This help may be structured as a grant that never has to be repaid.
- California: The CalHFA MyHome Assistance Program offers up to 3.5% of the purchase price in down payment or closing cost assistance.
These programs typically pair well with alternative financing arrangements for those avoiding riba.
2. Employer or Occupation-Based Housing Benefits
Some employers and professional groups offer housing support as part of their benefits package.
For example:
- Nurse Next Door Program: Qualifying nurses, medical professionals, and healthcare employees can receive grants of up to $8,000 when buying a home, with additional down payment assistance of up to $15,000 available.
- Teacher Next Door: Teachers and educators may qualify for grants up to $8,000 plus additional down payment assistance when buying a home.
These occupation-based programs often work alongside alternative home financing models, including those that avoid the use of interest.
3. Matched Savings or Individual Development Accounts (IDAs)
Matched savings programs or IDAs are designed to encourage saving by matching your contributions toward a home purchase. For example, if you deposit $1,000 into your IDA, a partner agency may contribute an additional $1,000 or more, representing a portion of the total savings needed for your home purchase.
These programs often include free financial education and are available through community organizations, nonprofit groups, or housing authorities. Because they’re designed to support each person in long-term financial growth, they are typically free of profit-based terms.
4. Home-Buyer Education and Counseling Programs
Many assistance programs are tied to completing a homebuyer education course. These programs are especially helpful for first-time buyers who want to understand their responsibilities, the home purchase process, and long-term financial planning.
Completing one of these courses may make you eligible for grants or down payment matching. It is also recommended to consult with certified counselors or real estate professionals to ensure you fully understand each step of the home-buying process.
Guidance Residential Account Executives may be able to connect you with a certified education program that aligns with riba-free financing principles.
5. Nonprofit and Faith-Based Assistance
Some nonprofits and faith-based organizations offer their own assistance programs to help community members purchase a home. These may include down payment support, free education, or even community-based purchasing initiatives that align with specific ethical or religious values. Some faith-based programs are developed in consultation with Muslim jurists to ensure compliance with Islamic principles.
For example, NeighborWorks America partners with local housing groups to provide education and down payment assistance grants.
Why So Many People Miss Out
With so many programs out there, why do only 13% of first-time buyers take advantage?
Often, it comes down to awareness. People simply don’t know these options exist — or they assume they don’t qualify. Others may be overwhelmed by the paperwork or unsure how to begin.
That’s why it’s important to work with a knowledgeable, ethical home financing provider who can help guide you through every step. At Guidance Residential, we’re committed to helping you find halal homeownership solutions — and that includes connecting you with possible down payment assistance.
Where to Look
If you want to begin researching on your own, it helps to know where to look. While there are thousands of programs across the U.S., they can sometimes be hard to find. For personalized assistance, contact your local housing agency or financier.
Here are a few smart ways to begin your search:
✅ Start with Your State’s Housing Finance Agency
Each U.S. state has a housing finance authority (HFA) that offers or coordinates various forms of assistance. Just search:
“[Your State] + housing finance agency down payment assistance“
For example, searching “Florida Housing Finance Corporation DPA” will take you to their offerings and eligibility requirements.
✅ Check with City and County Governments
Many local governments have first-time homebuyer programs funded through federal grants. These are often run by a city’s housing or community development office.
✅ Use Free Tools
Some websites like allow you to search by ZIP code for available programs.
Here are two to try:
✅ Ask Your Financier Directly
Many home financing providers also have their own limited-time offers or exclusive promotions for new buyers. At Guidance Residential, for example, qualifying customers may sometimes receive a credit on their closing costs when they lock in their financing during special promotional periods. This is in addition to any local or state programs you may also be eligible for.
Make sure to ask your Account Executive about current offers or assistance partnerships that could lower your out-of-pocket costs.
Don’t Miss Out on Help That’s Available to You
Buying a home is a major milestone — and with the right support, it can be more accessible than you ever imagined. Unfortunately, too many first-time buyers give up because they assume it’s out of reach.
Don’t let lack of information hold you back.
Whether you’re saving for your first home or getting ready to buy now, make sure you’re taking full advantage of information available — and the programs designed to help you succeed.
What’s Next?
️✔️ Ask your Account Executive what local or national programs may be available to you
✔️ Explore your state or city’s housing agency website
✔️ Look into employer or occupation-based assistance
✔️ Stay informed about special offers through Guidance Residential
With the right support, riba-free homeownership could be closer than you think.
Ready to Take the Next Step?
A home purchase is one of the most important decisions you will make. The team at Guidance Residential is here for you, from the first step of pre-qualification or pre-approval, on through to finding the right real estate professional for you and your family — or refinancing a home you already own. We invite you to explore the home buying process with Guidance Residential today. You can also instantly calculate an estimate specific to your personal situation with our finance calculators online.
Guidance Residential remains the #1 U.S. Islamic home financing provider, with more than 40,000 families assisted over more than 20 years. Learn more about our co-ownership model of Islamic home financing, and get started on your home finance journey today.
Your Guidance Residential Account Executive is here to help with any questions. Looking to refinance or purchase? Have a friend or family member who is looking for a home? Call 1.866.Guidance, or start an application today.
