Key takeaways

  • Down payment assistance programs provide prospective homebuyers with loans or grants that they can use toward the down payment for a house.
  • Most down payment assistance programs are designed for first-time homebuyers.

Not everyone has the financial means to make a down payment on a home. With the median existing-home price around $400,000, a prospective buyer would need between $12,000 and $80,000 for a 3 to 20 percent down payment on a home. The good news is, there are programs that can help aspiring homeowners with that down payment. Here’s how to get down payment assistance.

What is a down payment assistance (DPA) program?

Down payment assistance programs are loans and grants designed to provide prospective homebuyers with money to help them pay for a down payment on a home purchase. Some programs also help with closing costs, which are the fees and charges you pay when you finalize your mortgage. These total about 2 to 5 percent of the loan principal (and more when you factor in the escrow for insurance and taxes). For instance, on a $200,000 loan, the closing costs could be around $4,000. If all of your ready money has gone to saving for a down payment, you might need help paying for closing costs.

There are thousands of these types of assistance programs nationwide. While a few programs exist at the federal level and even with some individual lenders, most down payment help is offered at the local level through state, county and city government programs, and come in the form of a loan, grant or matched savings.


The percentage of U.S. adults and would-be homebuyers who cite being unable to afford a down payment and closing costs as reasons for not owning a home.

Down payment assistance eligibility requirements

The vast majority of down payment assistance is offered to first-time homebuyers. However, “first-timer” can mean not just an actual newbie but also someone who has not owned a home in the last three years. Many cities and counties have other housing programs available, but down payment assistance is typically reserved for people meeting these criteria.

Many programs also restrict owners of rental or investment properties from participating, so the home should be your primary residence, and it should be a single-family home. Some programs might allow a duplex or small multi-family property (four or fewer units) if you will be one of the occupants.

Types of down payment assistance loans and programs


Grants are a type of down payment assistance that provides a one-time cash sum, often in the form of a no-interest second loan. You can use the money to cover all, or part of, a down payment or closing costs. The funds don’t have to be repaid and are typically geared toward those who are low- or moderate-income borrowers. There are even some grant programs available to those who have previously purchased a home. Grant funds are typically available through banks and state and local governments.

Forgivable loans

Forgivable loans are technically loans, but effectively grants — because you might never have to pay them off. That’s what the “forgivable” part means: Generally, forgivable loan debt is erased after a certain time so long as you still own the home and are up-to-date on your mortgage payments. If you move before the specified time associated with the loan, it’s likely that you’ll need to pay back a portion of the funds. Often these loans are available through state housing finance agencies.

Low-interest loans

This type of home down payment assistance functions like a second mortgage: It’s an additional lien against your home, albeit at lower-than-market-rate terms. You’ll need to repay low-interest loans, typically over a few years. You must repay this loan in addition to your regular mortgage, which means you’ll have more monthly payments to make. A variety of mortgage lenders might offer these loans.

Deferred-payment loans

Deferred-payment loans generally don’t charge interest, which means you are only responsible for repaying the amount you borrow (the principal). However, deferred payment loans are not forgiven. You’ll need to repay them in full when you sell your home or refinance your mortgage. This type of lending is often offered via state and local homebuyer assistance programs.

Individual Development Accounts (IDAs)

Also called a matched-savings account, an IDA is a special savings account through which the account holder’s contributions are matched by either private or public money. This kind of matched savings program typically comes with income caps and employment requirements, and participants usually need to complete free financial literacy training. IDAs are generally offered locally at the state level or through private nonprofits. You can use the money for the down payment and closing costs.

Lender-specific down payment assistance programs

Some mortgage lenders offer their own down payment assistance. For example, in many states, Chase offers from $2,500 to $5,000 that can go toward closing costs and down payment needs. While this program is just for first-time homebuyers, it does have other stipulations: You’ll need to get a 30-year fixed-rate loan and live in the home as your primary residence. You’ll also need to attend a homebuyer education course to receive the full amount.

How to get down payment assistance

Most payment assistance programs are local, though there may be a few statewide ones too. Some of the places to check out for down payment assistance include:

  • State housing finance authority: Many state housing finance authorities (HFAs) offer homebuying assistance and education.
  • City and county government programs: As a means to boost homeownership, many counties and cities offer down payment assistance programs for first-time homebuyers. Check your municipality’s website for more, or speak to your loan officer to get more details about local DPA programs in your region.
  • U.S. Department of Housing and Urban Development (HUD): Check HUD’s website for local homebuying programs by state. Every state also has HUD-approved counselors who will simplify the finer points of homebuying and help you find financial assistance.
  • Down Payment Resource: Down Payment Resource, a private company, provides various resources for homebuyers, real estate agents and lenders, including an eligibility and lookup tool via its platform.

How long does it take to get down payment assistance?

Since programs are usually administered at the local level, the time it takes for them to disburse funds can vary widely. It’s best to start your research and applications as soon in the homebuying process as possible to give yourself as much time as you can. Your lender will work directly with the assistance program to secure the necessary funds.

What mortgages can down payment assistance be applied to?

You can apply down payment assistance funds to many different types of mortgages. Some of the most well-known mortgage investors accept the use of down payment assistance programs. That includes Fannie Mae, Freddie Mac, the FHA and the VA. However some government-backed mortgage programs may also offer their down payment assistance, so it’s also a good idea to check with the lender you’re working with.

Individual lenders may have their own requirements and restrictions regarding how down payment assistance is accounted for and applied to your loan. If you’re planning to take advantage of these types of programs, reach out to the prospective lenders first to ensure down payment assistance funding is allowed and how to use such within the lender’s rules.

Benefits and drawbacks of down payment assistance programs


  • Quicker path to homeownership: When you’re struggling to gather enough money for a down payment yourself, these programs can help you become a homeowner faster.
  • Savings on upfront costs: Assistance programs can also save you money on some of the upfront expenses associated with buying a home, including closing costs, which some assistance programs also cover.
  • Improved mortgage terms: You may also be able to obtain more favorable mortgage terms when using down payment assistance. This would be the case if the down payment assistance allows you to put 20 percent down on your home purchase, eliminating the need to pay for private mortgage insurance (PMI). Lenders require homebuyers to pay PMI if the down payment is less than 20 percent.


  • Increased long-term costs: In some cases, the cost of a home could be higher over the long run if the down payment assistance is provided in the form of an interest-bearing loan that needs to be repaid.
  • Lengthy application process: The process of qualifying for down payment assistance can also be time-consuming, as you’ll need to research all of the programs available and submit individual applications to each one.
  • Occupancy requirements: It’s also not unusual for some assistance programs to require that you occupy the home for a minimum number of years to have the assistance fully forgiven, which may not be ideal if the need to move arises.

Down payment assistance FAQ

  • Not everyone qualifies for down payment assistance programs. If you have owned a home in the last three years, your income is too high or you are planning to rent out the property or otherwise use it as an investment, you might not be eligible for many programs.

    However, there are other housing programs you might qualify for. Visit, select your state and click “Learn About Homeownership.” From there, you can find ways to avoid foreclosure, find home counseling services and get money for home renovations or repairs. Depending on where you live and your needs, you might find housing resources geared toward seniors, disaster relief and help to pay utility bills.

    Home assistance programs are vast and vary by needs and location. You might find that if you do not qualify for down payment assistance, you might be eligible for assistance in other ways.
  • This, too, depends on where you are. Individual states primarily determine terms and funding amounts. Find out what’s offered in your area, and what you need to do to apply, by contacting your state’s HFA.
  • In most cases, yes, you can use multiple sources of down payment assistance, provided you qualify. Check with your lender to ensure you’re obtaining a mortgage through a program that allows for more than one source of assistance.