Utah First Time Homebuyer Programs and How to Use Them
Buying your first home in Utah is expensive right now. The median home sale price statewide hit $566,400 in January 2025, with the median down payment sitting around $42,600. Those numbers stop a lot of people before they even start. There are real programs built to close that gap, and several of them are worth your full attention.
This guide breaks down what’s available, who qualifies, and what the fine print says before you walk into a lender’s office.
Contact The Utah Housing Corporation
The Utah Housing Corporation (UHC) is the state’s housing finance agency. It connects homebuyers with lenders that offer more affordable 30-year, fixed-rate conventional, FHA, and VA loans to eligible first-time and repeat homebuyers. You’re considered a first-time buyer if you’ve never owned a home or haven’t owned one in the past three years.
The main loan program through UHC is called FirstHome. It typically carries the lowest interest rate among UHC programs and is geared toward first-time homebuyers with a credit score of 660 or higher whose income and purchase price fall below posted limits. Income limits are based on all household members 18 and older.
If you’ve owned a home before, or you’re a first-time buyer who doesn’t meet the FirstHome thresholds, the HomeAgain mortgage program is available for homebuyers with a credit score of 660 or higher. For buyers who can’t hit 660, the Score Loan program sets the minimum FICO score at 620.
Down Payment Assistance Through UHC
Getting a UHC mortgage opens the door to their down payment assistance program. As of July 1, 2025, this assistance takes two forms, Traditional and Deferred. The Traditional option lets the buyer borrow up to 6% of their primary loan, up to $27,500, as a 30-year fixed-rate loan at an interest rate 1% higher than their primary mortgage, capped at 8.00%. The Deferred option provides 3.5% of the primary mortgage, up to $27,500, at a rate of 3.50% deferred simple interest, with required payments that come due upon maturity, sale of the home, or refinancing.
Neither option is “free money”, but both function as second mortgages that can significantly reduce upfront cash needs for first time buyers at closing.
The S.B. 240 First-Time Homebuyer Assistance Program
This is one of Utah’s first-time homebuyer programs that gets the most attention, and it comes with specific restrictions worth knowing.
Eligible first time buyers who meet UHC’s criteria can receive up to $20,000, interest-free and payment-free, for down payment, closing costs, or a permanent mortgage interest rate buydown when purchasing newly built homes after July 1, 2023. The home must be in Utah, must be new construction or newly built, and can be a single-family home, condo, townhome, or a manufactured or modular home on a permanent foundation. The maximum purchase price is $450,000.
The $20,000 is not a grant. Buyers who qualify receive the assistance interest-free and payment-free until they sell or refinance, at which point the amount owed is whichever is less between the original assistance received or 50% of the home’s equity.
Eligibility requires no ownership interest in a home in the past three years, at least 12 months of Utah residency prior to closing, and credit qualification through a Utah Housing first mortgage with a participating lender. Exceptions exist for certain single parents and displaced homemakers.
Reservations can be submitted before construction starts or before a contract is signed. Funds are limited and go on a first-come, first-served basis, so getting your lender to submit a reservation early in the process matters.
The Mortgage Credit Certificate
The Utah first-time homebuyer tax credit, issued through a Mortgage Credit Certificate (MCC), converts part of your mortgage interest into a federal tax credit worth up to $2,000 per year for the entire life of your loan.
The credit equals 25% of the mortgage interest you pay annually, capped at $2,000. On a $175,000 mortgage at 5% interest, the annual interest paid would be roughly $8,691, and 25% of that comes to approximately $2,172. Because the cap is $2,000, the credit maxes out there, which translates to about $167 added back to your take-home pay each month.
The credit works with conventional, FHA, VA, Utah Housing, and USDA mortgages. It is an annual credit for the life of the original loan, not a one-time benefit. If you refinance, you lose eligibility and may face recapture tax consequences under IRC Section 143(m), which typically only applies if you sell within nine years and your income has increased significantly.
There is an application fee due to Utah Housing at the time of application. It runs $750 if you’re using a non-Utah Housing loan, or $250 if you’re pairing it with a Utah Housing loan.
City and County Programs Worth Checking
Several municipalities run their own assistance programs on top of state options, and most city programs require completion of a homebuyer education class as part of the process.
Provo’s Loan to Own program offers up to $40,000 for buyers at 80% or less of the area median income purchasing in Utah County, excluding Fairfield, Highland, and Woodland Hills. The loan is 0% interest with deferred payments until the property stops being the primary residence.
Murray City offers up to $25,000 through its NeighborWorks program. Ogden’s Own in Ogden program provides up to $20,000. Salt Lake City has several options including CDCU Down Payment Assistance at up to $14,000 and a Community Land Trust program that reduces monthly mortgage payments.
Salt Lake City also runs a Community Heroes program that offers up to 5% of the home sale price to public employees, paramedics, EMTs, teachers, health providers, and military members, both active and retired, who meet income requirements.
Federal Loan Options
FHA loans remain a strong baseline for buyers with limited savings. They allow down payments as low as 3.5%, though many Utah first-time homebuyer programs allow as little as 3%, and are more flexible with credit history than conventional loans. They’re also commonly used as the underlying mortgage when pairing with state or local assistance programs.
USDA loans are relevant if you’re open to buying outside a major metro area. The program offers 100% financing in eligible rural and suburban areas, and some programs permit 0% down payment options in those cases. Much of Utah outside of Salt Lake County, Utah County, and Davis County has qualifying zones. The USDA Property Eligibility tool lets you check a specific address.
VA loans remain the strongest option for veterans and active-duty service members, with no down payment and no private mortgage insurance required. The S.B. 240 state assistance program cannot be combined with VA grants, so if you’re eligible for VA financing, run the numbers on both paths before committing.
Where to Start
The most important step before shopping for homes is getting pre-approved with a Utah Housing participating lender, not just any lender, so you can determine what you can afford before you search for a house. Not all lenders are set up to work with UHC programs, and you need a participating lender to access FirstHome, the down payment assistance second mortgage, or S.B. 240 funds.
Tips: don’t keep waiting for perfect market conditions; shop participating mortgage lenders and compare options for the right home loan, since your debt and debt to income ratio can affect approval and your monthly payment, and buying sooner may help you build equity for the future.
Ask about MCC eligibility during that same conversation. It is straightforward to apply for at closing and the annual savings compound significantly over a 30-year loan.For city-specific programs, contact your municipality directly or find a HUD-approved housing counseling agency through the CFPB’s housing counselor search tool, which is free to use. A HUD-approved counselor, realtor, or local team can help first-time buyers set location priorities, plan a budget, and navigate the overall journey. Eligible military veterans should also ask about the separate $2,500 grant toward a first home purchase in Utah. Note that the FY2026 grant funds have been fully depleted as of now, with new funding expected to open on August 3, 2026, so timing your application matters.
