Setting ssh server to an user to only SFTP to the user's home directory

Here is a guide for setting up SFTP users who’s access is restricted to their home directory.

Add the following to the end of the /etc/ssh/sshd_config file:

Subsystem sftp internal-sftp

# This section must be placed at the very end of sshd_config
Match Group sftponly
    ChrootDirectory %h
    ForceCommand internal-sftp
    AllowTcpForwarding no

This means that all users in the ‘sftponly’ group will be chroot’d to their home directory, where they only will be able to run internal SFTP processes.

Now you can create the group sftponly by running the following command:

$ groupadd sftponly

Set a user’s group:

$ usermod steve -g sftponly

To deny SSH shell access, run the following command:

$ usermod steve -s /bin/false

And set the user’s home directory:

$ sudo chown root /home/steve

$ sudo chmod go-w /home/steve

$ sudo mkdir /home/steve/writable
$ sudo chown steve:sftponly /home/steve/writable
$ sudo chmod ug+rwX /home/steve/writable

Finally, you probably need to restart SSH

$ service ssh restart

The SSH part should now be in order, but you should make sure that file permissions also are correct. If the chroot environment is in a user’s home directory both /home and /home/username must be owned by root and should have permissions along the lines of 755 or 750.
In other words, every folder leading up to and including the home folder must be owned by root, otherwise you will get the following error after logging in:

Write failed: Broken pipe
Couldn't read packet: Connection reset by peer