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How To Get Down Payment Assistance Grants


What You Need To Know

  • First-time home buyers don't always need to make a down payment to buy a home
  • Local and state programs provide down payment assistance with loans and grants
  • Some programs offer zero-interest, forgivable loans for down payment assistance


Buying a home can seem easy enough, right? You find the home you want, you make an offer, get a mortgage. And voilà! The house is yours. 

If only it were that simple. 

There are way more steps involved in the home buying process – and some of those steps can feel challenging. 

Once you finally find that perfect house (congratulations, BTW), you’ll need to start thinking about making a down payment to turn that house into your home. Coming up with the cash can be tricky, especially for first-time home buyers. 

According to the National Association of REALTORS®, 25% of home buyers ages 22 – 30 said saving for a down payment was the most difficult task in the buying process.[1]

But it doesn’t have to be that way. 

With down payment assistance, that high hurdle can be cleared and your journey from home shopping to homeowner can be a reality.

What Down Payment Assistance Is

Down payment assistance uses grants or low-interest loans to help you come up with the money you’ll need for a down payment on a home.

You have to apply for the assistance. How much you get will depend on the program and where you live.

Some programs offer assistance as a percentage of the home sale price. You may find a program that offers borrowers 15% of the home’s purchase price. Other programs cap assistance at a certain dollar amount.

Every program has different qualification criteria and funding amounts. How much you’ll need to save and contribute to the down payment will depend on the assistance program you use. 

Who Qualifies for Down Payment Assistance?

While every program sets its requirements, some standard requirements apply across the board. You may be expected to meet some of the following: 

  • You are a first-time home buyer.
  • The home you buy will be your main residence.
  • Your income falls under the maximum income level set by the down payment assistance program.
  • The home’s price is under the maximum limit(s) set by the program.
  • The home is located in an area that qualifies under the program.

As a part of some programs, you can also expect to be asked to:

  • Attend home buyer education courses
  • Apply for a mortgage from an approved lender

How Long Does It Take To Get Down Payment Assistance?

It’s important to get your application in nice and early to make sure the delivery of the assistance syncs up with the closing on the house. 

Some assistance programs may require additional time, and it’s important to factor that extra time into your offer. If you don’t, a delay with the down payment assistance may cause your deal to fall through. 

Pro tip: Be upfront about your down payment needs with your lender. They can help guide you and schedule things appropriately.

What Types of Down Payment Assistance Exist?

Not all down payment assistance looks the same. There are differences:

  • Grants don’t have to be paid back (and who doesn’t like free money?).
  • You don’t have to pay back forgivable loans if you own the home for a certain number of years (usually around 5 years).
  • There are loans you pay back while you’re paying your mortgage.
  • There are loans you pay back when you sell your home, move or refinance your mortgage.
  • There are matched savings programs. These programs match whatever you’ve saved for your down payment.

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What Types of Down Payment Programs Exist?

Ready to match a down payment assistance program with a mortgage for your soon-to-be (fingers crossed!) home? Here are some programs to consider:

1. State and local programs

Some states and local governments (as well as other organizations) offer home buying assistance programs. Ask your mortgage lender or broker for program recommendations or start your search with the Department of Housing and Urban Development’s (HUD’s) list of local home buying programs.

2. Chenoa Fund™

The Chenoa Fund™ offers assistance across the country – except in New York state. (Don’t worry, New Yorkers, there are plenty of other options in the Empire State!) 

With this program, you can receive up to 3.5% of the home’s purchase price in down payment assistance. 

If you’re thinking of using an FHA loan to buy a home, you’re in luck! Not only do FHA loans allow you to use down payment assistance, but Chenoa Fund™ assistance lines up with FHA loan down payment requirements, which often request 3.5% down. 

The terms of your Chenoa Fund™ assistance will depend on your income and debt-to-income (DTI) ratio. If your income falls under the program’s income cap, you won’t have to pay back the down payment assistance. If your income is higher than the income cap, you have to pay it back.

3. Community Seconds®

Community Seconds® is a second mortgage program approved by Fannie Mae. It offers loans up to 105% of a home’s purchase price, and that extra 5% can be applied to the down payment. 

To qualify for Community Seconds®, you have to meet Fannie Mae’s requirements, including[2]:

  • Buying a primary residence
  • Buying a home with a combined loan-to-value (CLTV) of 105% or less
  • Meeting Fannie Mae mortgage loan requirements

4. Affordable Seconds®

Affordable Seconds® is a Freddie Mac program. If you think Freddie might be related to Fannie, you’re right. Freddie Mac is another mortgage program.

Eligibility requirements for these programs vary and can include:

  • A CLTV of 105% or less
  • Using down payment assistance with an eligible mortgage type
  • Working with an approved down payment assistance program

5. USDA loans with no down payment

If you qualify for a home loan backed by the U.S. Department of Agriculture (USDA), you may not need to save for a down payment at all.

USDA loans are available for homes in rural and other qualified areas. Want to know if the home you just fell in love with qualifies? Check out the USDA’s eligibility tool to find out.

You’ll also have to come in under the income cap set for the state where you want to buy the home and meet any credit requirements set by your lender. The USDA isn’t the actual lender.

Federal mortgage programs are sponsored (or backed) by government agencies, but the government doesn’t lend the money.

6. VA loans

You might be able to skip the down payment with loans backed by the Department of Veterans Affairs (VA). VA loans have no down payment requirement and never charge private mortgage insurance. This is a benefit of military service in the U.S. 

To qualify for these loans, you must be a veteran, an active-duty service member or a qualifying survivor or surviving family member. You’ll also have to meet a lender’s income and credit requirements.

7. Low-down-payment mortgage programs

If you don’t qualify for down payment assistance, you might consider low-down-payment mortgage options. 

These mortgage loans are often backed by the government with the goal of making homes more available (and affordable) to home buyers. And that can mean mortgage loan options with down payment requirements as low as 3%.

Here are some options to consider:

  • FHA loans[3]: The loans have a minimum down payment requirement of 3.5%.
  • HomeReady®[4]: This Fannie Mae program limits down payment requirements for borrowers with credit scores of 620 or higher.
  • Home Possible®[5]: This Freddie Mac program limits down payment requirements to as little as 3%.
  • HomePath® homes[6]: This HUD program lets you buy foreclosed homes at potentially big savings.

How To Apply for Down Payment Assistance

There are some quick steps you can take to kick-start your down payment assistance journey:

  • Start by doing research. Check out your state and local housing finance agency. Look for local and state first-time home buyer programs. It’s worth comparing the two. 
  • Learn the requirements for any programs you’re interested in. That includes figuring out which mortgage lenders are approved to work with each program. Most lenders or brokers will work with you to help you apply for down payment assistance.

How Low Can You Go With That Down Payment?

Saving up for a down payment can take a while. And the time you’re taking to save up for a down payment is likely time you’re spending paying off someone else’s mortgage. 

Capitalize on the available assistance and programs out there for you. They can help you upgrade to homeowner status faster – and with a lower down payment.

Home is worth it.

The mortgage process can be exciting, and we’ll be with you all the way. Take the first step to owning a home. You’ll be glad you did.

  1. National Association of REALTORS®. “2021 Home Buyers and Sellers Generational Trends Report. Retrieved September 2021 from

  2. Fannie Mae. “Fact Sheet for Mortgage Lenders: Community Seconds®.” Retrieved September 2021 from

  3. U.S. Department of Housing and Urban Development. “Let FHA Loans Help You.” Retrieved September 2021 from

  4. Fannie Mae. “HomeReady Mortgage.” Retrieved September 2021 from

  5. Freddie Mac. “Home Possible®.” Retrieved September 2021 from

  6. Fannie Mae. “What are HomePath Homes?”  Retrieved September 2021 from


In Case You Missed It

  1. USDA and VA loans may not require down payments

  2. Other government-backed loan programs, including FHA loan programs, can help you get a mortgage with as little as 3.5% down

  3. Whether you have to pay back down payment assistance can depend on your income and how long you stay in the home

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