I need to find all users home directories listed using grep from /etc/passwd

You can use cut to split files with columns on a specific delimiter:

cut -d: -f6 /etc/passwd

Or -f1,6 for columns (fields) 1 and 6.

Grep is really not the tool for parsing out data this way; grep is more for pattern matching and you're trying to do text-processing.  You would want to use awk.

awk -F":" '$7 == "/bin/false" {print "User: "$1 "Home Dir: "$6}' /etc/passwd

• awk – The command

• -F":" – Sets the data delimiter to :

• $7 == "/bin/false" – Checks if the 7th data column is /bin/false

• {print "User: "$1 "Home Dir: "$6}' – Says to print the first column and sixth column in the specified format.

• /etc/passwd – Is the file we're processing