First-Time Buyer Program Rates Compared: Where Down-Payment Help Hides Refinance Cost

The setup

Every 18 months a refinance product trends because someone misunderstands it on social media. Refinancing out of a first-time buyer assistance program is its own subspecialty. The recapture rules surprise more borrowers than any other piece of the mortgage market. Here's what it actually does for borrowers in 2026.

How we pulled the numbers

This is a controlled scenario: $295,000 FTB-program refi exit on a single-family in California, owner-occupied, 90% LTV, 720 FICO. Quotes captured July 22–29, 2025. We requested formal Loan Estimates wherever a lender would issue one, and used published rate sheets where they would not.

Side-by-side rate comparison

Program	Refi Allowed?	Recapture Period	Subordination?	Notes
CalHFA MyHome	Yes	9 yrs	Yes (with conditions)	Repay grant if you sell early
TSAHC Down Payment Assistance	Yes	0 yrs (gift)	n/a	Cleanest program in TX
NYC HomeFirst	Conditional	10 yrs	Difficult	Read the fine print
MassHousing Down Payment	Yes	5 yrs	Yes	Workable on refi

On this representative scenario, the spread between best and worst APR is Program-dependent — which compounds into roughly Varies by recapture rules over the life of a 30-year loan. Your numbers will not match ours exactly. The pattern, however, is what to watch.

Where State HFA programs actually wins

1. TSAHC and similar grants exit cleanly — True grants (not soft seconds) don't recapture on refi. If your program is grant-style, you're free to refinance whenever the math works.

2. Most programs allow subordination — If you have a soft second, the program will usually subordinate to a new first-lien refi — but you have to ask, and the paperwork takes time.

3. Recapture rules expire — Hold long enough and the grant becomes free. Run the math against your actual hold horizon.

Where it quietly costs you

1. Soft seconds complicate refis — If your program issued a soft second mortgage, the lender of your new first lien must accept subordination — not all do.

2. Recapture math is brutal in early years — Selling or refinancing in years 1–3 of a 9-year recapture period can cost most or all of the original assistance.

3. HFA program rules change — What was true when you bought may not be true now. Always pull the current program docs before assuming.

What we'd do

We'd anchor on State HFA programs's Loan Estimate, then shop two more — one online disruptor, one local. The negotiation alone usually moves your final rate 0.125–0.25 percentage points. That's not table stakes; that's the entire reason to read articles like this one.