State Bond Programs Most States have their own first time home buyer programs. The guidelines vary from State to State, but the concept is similar. Each State sells mortgage backed securities to purchase loans from participating lenders that originate and close loans on behalf of the State. The loans are usually set aside for low and moderate income households. Moderate income is usually based on 115% median income of the county/metropolitan statistical area. Most programs require the applicant to be a first time home buyer…..but….in many States they have targeted areas where they lift this restriction. The State offers a below market rate, and a low down payment is required.  Some States also have Down Payment Assistant Programs tied to their mortgage program. These DAPS can be used for your down payment and/or closing costs. The majority of these State sponsored DAPs are forgiven and do not have to be paid back after a set period of homeownership but there are some States that do require repayment when the home is sold. Click on your State to see what s available.