Complete Guide: How to Get Down Payment Assistance

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Complete Guide: How to Get Down Payment Assistance

Are you worried about your financial capacity to afford a down payment on your first home?

Good news - first-time homebuyers have the opportunity to receive down payment and closing cost assistance. They can get it from either private organizations or government agencies.

We’ll walk you through the down payment programs that will help you get closer to your house.

What is Down Payment Assistance

Down payment assistance allows first-time homebuyers to cover the down payment if they don’t have the finances to cover it themselves. The required amount differs, and some mortgage programs don't demand a down payment.

Home Closing Cost Assistance

Mortgages and grants are also available at the federal, state, and local levels to help with the closing costs. All states have unique programs for first-time homebuyers.

Here's another lesser-known detail: assistance is also available for repeat homebuyers.

Usually, closing cost assistance is given by state or local housing commissions which are authorized by the HUD. However, private lenders and nonprofits can also assist.

While this aid is typically aimed at low and average-income homebuyers, there are exceptions to this rule. For instance, expensive cities have high-income limits to be eligible for closing costs and down payments.

Types of Down Payment Assistance

Down payment plans are commonly provided as mortgages and grants at the local and state levels. Funds may also be available from nonprofit organizations and the private sector in the applicants' local area.


This is the most useful type of down payment assistance. The reason is that down payment assistance grants offer funds that homeowners won't have to repay. In simple words, this money is a gift.

But keep in mind that some programs titled as grants might make a second lien on your property. While there’s nothing inherently wrong with this, it’s important to be aware of all the details. Make sure to thoroughly review the terms associated with any agreement.

Furthermore, ensure that the lender is aware of the grant. If the lender is unaware, you may end up with a silent second mortgage.

Forgivable Loans

Forgivable down payment assistance are loans that also don’t demand repayment, as long as you live in a home for some years.

Such mortgages have a zero interest rate. The lender will forgive these mortgages, but as mentioned earlier, homeowners must reside in the home for a specific number of years.

Generally, lenders set a 5-year time after which the mortgage will be forgiven. However, the forgiveness period can be elongated, such as 15 to 20 years.

And in case the applicants move before the forgiveness period finishes, they will have to repay the mortgage amount.

Let's take an example: if the lender has set a forgiveness period of 5 years and you happen to sell the property within 4 years, move before completing the full 5 years, or refinance the mortgage, there's a chance you may need to repay a portion or even the entire forgivable loan.

Deferred Payment Loans

Another option to consider is being eligible for a second loan with deferred payment. Typically, these loans are intended to cover the down payment and are of a sizable mortgage amount.

Plus, there’s no need to pay back this loan until your mortgage is paid off, refinanced, or the home is sold.

Deferred payment loans are never forgiven, which means you can't leave the property without paying back. Applicants typically cover the repayment of the mortgage via the proceeds from selling the property.

Who Qualifies for Down Payment Assistance

Above 3,000 down payment programs exist in the country. Most of these are tailored to first-time homebuyers.

For instance, federal programs ($25,000 Down Payment Toward Equity Act) help lower-income first-time homebuyers and might add extra eligibility requirements.

Similarly, the Good Neighbor Next Door program is restricted to EMTs, teachers, law enforcement members, and nurses.

Other plans might demand homebuyers to reside in the new residence for at least 5 years. At the local and state levels, down payment assistance providers often operate based on geography, specifically targeting buyers in particular neighborhoods, communities, and cities.

Keep in mind that down payment assistance programs are not made to replace the buyer's primary loan. Instead, these programs improve the buyer's loan to make home purchases affordable. So, to qualify for down payment assistance, the homebuyer needs to also be eligible for a loan.

Applying for Down Payment Assistance

Local Programs

Start by hunting down programs available in your vicinity. HUD offers a list of local down payment assistance programs for all states.

Check if there are any local programs offered in your county or city. Lastly, ensure that your mortgage lender is comfortable with the program.

National Programs

When it comes to national down payment assistance programs, there’s no complete national database for down payment plans. Some programs are automatically applied, like federal tax credits or property tax abatement for first-time buyers. Other programs demand an application to be claimed.

Before applying to any program, go through the terms and conditions to guarantee they match your financial aims. For instance, some down payment assistance plans demand homebuyers to fund with an FHA loan. Other providers might enforce residency criteria of 5 minimum years.

Down Payment Assistance Programs by State

Now, let's explore the various down payment assistance programs available in different states across the USA. Additionally, we will provide direct links so you can easily access all the relevant details.

  1. Alabama Alabama Housing Finance Authority -
  2. Alaska Alaska Housing Finance Corporation (AHFC) -
  3. Arizona Arizona Department of Housing’s Home Plus Program -
  4. Arkansas Arkansas Dream Down Payment Initiative (ADDI) -
  5. California California Housing Finance Agency (CalHFA)-
  6. Colorado CHAC (Colorado Housing Assistance Corporation) -
  7. Connecticut Connecticut Housing Finance Authority -
  8. Delaware Delaware State Housing Authority (DSHA) -
  9. Florida Florida Housing Finance Corporation -
  10. Georgia Georgia Dream Homeownership Program (GDHP) -
  11. Hawaii Hawaii Home Ownership Center -
  12. Idaho Idaho Housing & Finance Association -
  13. Illinois Illinois Housing Development Authority (IHDA) -
  14. Indiana Indiana Housing and Community Development Authority (IHCDA) -
  15. Iowa Iowa Finance Authority -
  16. Kansas Kansas Housing Resources Corporation (KHRC) -
  17. Kentucky Kentucky Housing Corporation -
  18. Louisiana Louisiana Housing Corporation -
  19. Maine Maine State Housing Authority -
  20. Maryland Maryland Mortgage Program -
  21. Massachusetts Mass Housing -
  22. Michigan Michigan State Housing Development Authority (MSHDA) -
  23. Minnesota Minnesota Housing Finance Agency (MHFA) -
  24. Mississippi Mississippi Home Corporation (MHC) -
  25. Missouri Missouri Housing Development Commission (MHDC) -
  26. Montana Montana Housing -
  27. Nebraska Nebraska Investment Finance Authority (NIFA) -
  28. Nevada Nevada Housing Division-
  29. New Hampshire New Hampshire Housing -
  30. New Jersey New Jersey Housing and Mortgage Finance Agency -
  31. New Mexico New Mexico Mortgage Finance Authority -
  32. New York State of New York Mortgage Association (SONYMA) -
  33. North Carolina North Carolina Housing Finance Agency -
  34. North Dakota North Dakota Housing Finance Agency (NDHFA) -
  35. Ohio My Ohio Home -
    Ohio Housing Finance Agency (OHFA) -
  36. Oklahoma Oklahoma Housing Finance Agency -
    Rei Oklahoma -
  37. Oregon Oregon Housing and Community Services (OHCS) -
  38. Pennsylvania Pennsylvania Housing Finance Agency -
  39. Puerto Rico Puerto Rico Housing Finance Authority -
  40. Rhode Island Rhode Island Housing -
  41. South Carolina South Carolina State Housing Finance and Development Authority -
  42. South Dakota South Dakota Housing Development Authority (SDHDA) -
  43. Tennessee Tennessee Housing Development Agency -
  44. Texas Texas State Affordable Housing Corporation (TSAHC) -
    Texas Homebuyer Program -
  45. Utah Utah Housing Corporation -
    Community Development Corporation of Utah - Buy Utah Homes -
  46. Vermont Vermont Housing Finance Agency (VHFA) -
  47. Virginia Virginia Housing Development Authority -
    Virginia DHCD -
  48. Washington Washington State Housing Finance Commission (WSHFC) -
  49. Washington DC District of Columbia’s Home Purchase Assistance Program (HPAP) -
  50. West Virginia West Virginia Housing Development Fund -
  51. Wisconsin Wisconsin Housing and Economic Development Authority -
  52. Wyoming Wyoming Community Development Authority -
    Welcome Home Wyoming -

Navigating Down Payment Assistance: Let Us Help You We wanted to simplify your search for the most suitable assistance program. That’s why we have collaborated with a nationwide lender that specializes in down payment assistance programs.

Click here to learn more and discover the options that best suit your needs!

Alan Reed

Alan Reed

Alan is a real estate investor based in Northeast Pennsylvania with experience renovating and operating everything from single-family rentals to strip malls and storage facilities.

June 04, 2023 (Updated April 22, 2024)