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Down Payment Assistance: How To Find and Get Help

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If it feels like a down payment is standing between you and homeownership – you’re not alone. Coming up with enough cash for a down payment on a mortgage is no easy feat, even if you save every penny you can. 

In 2022, the average down payment for middle-tier homes (homes priced between 75% and 125% of median home sales prices) soared to a record high of $63,071.[1] And roughly 30% of home buyers say that saving for a down payment is their primary obstacle to buying a home.[2]

Fortunately, you have a few options to find money to cover your down payment. You can borrow money from family or friends. Or you can take on a second job. But did you also know you can take advantage of down payment assistance programs to help clear the down payment hurdle? 

What Is Down Payment Assistance?

Down payment assistance programs help home buyers cover the cost of a down payment through grants, loans and other programs.

Down payment assistance can come in many forms, from local and state grants to low-interest, deferred or forgivable loans.

There are many types of down payment assistance programs, each with specific eligibility criteria. For many programs, only first-time home buyers can qualify for down payment assistance. 

The programs can also vary by dollar amount, with limits on the size of the grant or loan.

Let’s discuss down payment assistance programs, who qualifies and where you can turn for down payment assistance to help you buy a home.

Who Qualifies for Down Payment Assistance Programs?

Most down payment assistance programs are designed to help first-time home buyers.

Being a repeat home buyer may disqualify you from some loan programs, but other programs may be available if you meet the qualifying criteria.

Some of the most common requirements for down payment assistance programs are:

  • The borrower meets household income limits.
  • You must live in the home.
  • The home purchase price can’t exceed set limits.
  • The home is in an approved location.
  • The minimum credit score is usually 620 – 640, but it can vary by state.
  • The maximum debt-to-income (DTI) ratio is typically 45%.
  • In some cases, the borrower must complete a housing counseling program.

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Types of Down Payment Assistance Programs

Down payment assistance programs typically exist in one of two forms: grants or loans. 

Grants are free financial assistance. Home buyers are awarded money without the obligation of repayment. Loans provide money that may need to be repaid by a future date or when the borrower sells or refinances the home.


Down payment assistance grants are like a gift because the organizations offering grants give the home buyer money they don’t need to pay back. 

Buying a home is expensive. You’ll pay less out of pocket if you can get free money to help you buy a home. In addition to helping cover your down payment, some grants can help cover closing costs.

Down payment assistance grants may create a lien – a legal claim to satisfy a debt against an asset. In this case, the asset would be your home. If you sell, refinance or rent your home during a specified time frame indicated on the loan, the lender may file a lien.

Let’s say you bought a home using a $10,000 down payment assistance grant, and one of the rules was that you couldn’t refinance or sell your home until you lived there for 13 years. If you refinance your mortgage after 10 years, you’ll be on the hook for $10,000 because you broke the agreement 3 years too early. 

Make sure you know and understand the conditions and consequences attached to any assistance money.

Forgivable loans

Forgivable loans typically have a 0% interest rate. The loan can be forgiven entirely or partially if you meet certain conditions. 

For example, every year, 10% of a $10,000 forgivable loan is forgiven until year 10. And the remaining loan balance will be forgiven if you’re still in the home.

Deferred loans

Deferred loans have a deferred payment schedule that kicks in once you sell or refinance your home. A deferred loan might sound like a forgivable loan, but the key difference is that deferred loans aren’t forgiven after a given number of years. 

The entire loan must be paid back.

Low-interest loans

Low-interest loans are second mortgages repaid with monthly payments, like your primary mortgage. Government programs and some lenders offer low-interest loans to help home buyers afford their down payment.

First-Time Home Buyer Down Payment Assistance Options

There are several down payment assistance programs for first-time home buyers. We’ve collected a few options for you to consider.

National Homebuyers Fund, Inc.

The National Homebuyers Fund, Inc. (NHF) is a great starting point. The nonprofit offers down payment assistance programs that cover up to 5% of mortgage amounts. NHF assistance is also available for different types of home loans, including conventional mortgages, Federal Housing Administration (FHA) loans, Department of Veterans Affairs (VA) loans and U.S. Department of Agriculture (USDA) loans

NHF programs are open to first-time home buyers and repeat buyers. NHF has flexible income, credit and DTI ratio requirements that can make it easier for more applicants to qualify.[3]

Fannie Mae Community Seconds®

Community Seconds® are second mortgage loans available through government agencies, nonprofits, lenders, employers and other Fannie Mae-approved issuers.[4]

Community Seconds® loans can only be used for primary residences. And they must be the second mortgage to a mortgage purchased by Fannie Mae.[4]

State and local first-time home buyer programs

Your state and local government may offer down payment assistance. For example, the State of New York Mortgage Agency offers a forgivable loan ranging from $1,000 – $15,000 in down payment and closing cost assistance.

Check your local or state government website to find out what down payment assistance programs exist for first-time home buyers.

How To Get Down Payment Assistance

Some down payment assistance programs are available locally. One of the best places to start is your city and county housing authority websites.Many states have housing assistance programs offered through their department of housing. 

The Department of Housing and Urban Development (HUD) is also an excellent resource for housing assistance.

Down Payment Assistance FAQs

How much down payment assistance can I get?

The amount of down payment assistance you get will vary by program. Some programs limit down payment assistance to a flat amount, while others offer assistance as a percentage of the total loan amount or the home’s sales price.

Does my state have a first-time home buyer program?

It probably does. To learn how your state helps first-time home buyers, visit HUD’s state-based resource page.

How long does it take to get down payment assistance?

The time it takes to get down payment assistance will depend on the program. Generally, you can expect to wait several weeks before you receive the funds.

How do I apply?

Each down payment assistance program will have an application and required documents to submit, like your tax returns, pay stubs and the purchase agreement for the home. Most organizations post the information on their websites. If you can’t find anything online or have more questions, contact the organization sponsoring the grant program or loan by phone or email.

Make sure your lender knows you’re applying for down payment assistance so they can help you close your loan on time.

Get a Leg Up With Down Payment Assistance

Buying a home involves plenty of fees and expenses. It can make saving for a down payment feel like an uphill battle. Fortunately, down payment assistance programs can help you get a leg up and give you the boost you need to buy a home. 

Becoming a homeowner is a major accomplishment. Fortunately, there are many organizations dedicated to helping aspiring home buyers become homeowners through down payment and closing cost assistance programs.

Get approved to buy a home.

Rocket Mortgage® lets you get to house hunting sooner.

The Short Version

  • 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
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  1. CoreLogic. “Average Total Down Payment Reached an All-Time High in 2022.” Retrieved November 2022 from

  2. Morning Consult. “2022 Obstacles to Home Buying.” Retrieved November 2022 from

  3. Fannie Mae. “Selling Guide B5-5.1-02, Community Seconds Loan Eligibility.” Retrieved November 2022 from

  4. New York State Division of Housing and Community Renewal. “Down Payment Assistance Loan (DPAL).” Retrieved November 2022 from

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