There was an article in the Houston Chronicle's real estate section about this very topic on Sunday 09/15/2013. City and State have programs that work with first time buyers (or those that have not owned a home in the last 3-5 years). Many buyers looking to use these programs must meet income qualifications and have a decent credit score of at least 640.
Pros are they typically cover closing cost or even down payment. If the buyer stays in the home for a certain amount of time, they do not have to repay those fees. Cons are the funds which these programs come from can run out without notice leaving you hanging just before a closing. The process to enter the program can take some time.
And these programs may not be any better than just working with a conventional loan and getting closing cost assistance from the sellers for your buyers. You just have to compare cost and short and long term effects on the loan. Good luck.
Bernstein Realty, Inc.