Key takeaways

A true first-time homebuyer grant never has to be repaid, but a lot of assistance marketed as a “grant” is actually a forgivable loan or a lender credit with conditions attached.

Nearly every lender grant requires you to get your mortgage from that lender, which means you can’t shop the rate underneath it.

Bankrate’s Hidden Homeownership Tax research found that 90% of people who bought a home in 2025 paid more than the most competitive rate available to them, at a cost of $3,656 in the first year alone. The best way to avoid overpaying is to shop with multiple lenders.

Bank grants are often taxable and can affect your eligibility for income-based programs like student loan payment relief.

A first-time homebuyer grant is money toward your down payment or closing costs that you don’t pay back.…