The Downpayment Toward Equity Act offers first-time, first-generation buyers a cash grant to make homeownership more affordable.
Verify Your Down Payment Toward Equity Eligibility
The Downpayment Toward Equity Act of 2025 is a proposed federal program that provides at least $20,000 in cash — or 10% of the home’s purchase price, whichever is greater — to help first-generation, first-time homebuyers with their down payment and closing costs.
The Act is designed to break down barriers to homeownership and close racial and generational homeownership gaps across the U.S.
Eligible buyers receive a cash grant of $20,000+ (not a loan, not a tax credit).
Funds can be used for your down payment, closing costs, mortgage discount points, or accessibility improvements.
Buyers in high-cost areas or those who are socially and economically disadvantaged may qualify for more than $20,000.
You must live in the home as your primary residence for at least 5 years to avoid partial repayment.
Approved mortgages include Conventional, FHA, VA, and USDA loans.
This program helps first-generation buyers achieve homeownership with fewer financial barriers.
Minimum $20,000 grant – or 10% of the purchase price, whichever is higher.
Covers key costs – down payment, closing fees, or mortgage rate buy-downs.
No repayment if you stay 5 years – live in the home long enough, and the grant is yours to keep.
Inclusive support – additional funds possible for disadvantaged or high-cost area buyers.
Flexible property types – single-family, townhomes, condos, manufactured homes, or up to 4-unit properties (if you live in one).
You may qualify if you meet all of the following requirements:
You haven’t owned a home or co-signed a mortgage in the last 3 years.
Your parents or guardians haven’t owned a home in the last 3 years, or you previously lived in foster care.
Up to 120% of Area Median Income (AMI) in most areas. Up to 140% of AMI in high-cost areas.
Must use a Conventional, FHA, VA, or USDA loan.
Primary residence only (no vacation or investment properties).
You or your spouse/partner cannot have received the grant before.
Must complete a HUD-approved homebuyer education course.
Move or sell sooner, and you’ll repay part of the grant.
Every borrower, spouse, and co-borrower must meet eligibility.
Free HUD-approved counseling ensures you’re prepared for ownership.
When the bill becomes law, here’s how buyers will access funds:
Check eligibility – Confirm your status as a first-time, first-generation buyer.
Take the homeownership course – Free HUD-approved classes are required.
Apply with an approved lender – Use a Conventional, FHA, VA, or USDA loan.
Submit paperwork – Income, ID, and documentation of eligibility.
Close on your home – Grant funds are applied at closing toward your costs.
This grant program is built to help:
Renters who’ve never owned and want their first home.
First-generation buyers whose parents or guardians haven’t owned recently.
Foster care graduates who qualify automatically.
Buyers in high-cost areas who need extra support.
Socially disadvantaged groups who have faced barriers to homeownership.
Not yet. The bill is in Congress, but it has strong support.
Only if you move or sell within the first 5 years. Stay 5 years or more, and you keep it all.
Yes — FHA, VA, USDA, and Conventional loans are all eligible.
No — it’s only for down payment, closing costs, mortgage points, or accessibility renovations.
If your household income is above 120% AMI (140% in high-cost areas), you won’t qualify.
If you’re a first-time, first-generation buyer, the Downpayment Toward Equity Act could give you $20,000+ in free cash to buy your first home.
While the bill isn’t law yet, it has wide support and could make home ownership possible for millions of Americans once passed.
