Down Payment Assistance Programs

Down payments are one of the greatest barriers to homeownership. Most lenders require homebuyers to put at least some money down on a home to qualify for a mortgage, with 20% being the traditional gold standard. But many Americans live paycheck to paycheck, or close to it, and struggle to save. 

Fortunately, more than 2,500 down payment assistance (DPA) programs exist across the country, offering borrowers help in the form of grants, loans, and savings matches. This guide explains how to find and take advantage of these programs. 

What is down payment assistance?

Down payment assistance is financial aid that makes homeownership more affordable. It's a critical resource — 2024 data from the Federal Reserve revealed that 68% of renters said they couldn’t afford a down payment as their reason for renting. With down payment assistance, homeownership becomes accessible to more Americans.

State agencies, local governments, and nonprofits may offer assistance in the form of grants, cash matches, and loans to cover the cost of the down payment. In some cases, funding is also available to help with closing costs.

While these programs are often designed for low-income buyers and first-time buyers, it’s possible to qualify for some DPA programs even if you have a moderate income, already own a home, or have owned a home in the past.

Types of down payment assistance

There are different types of down payment assistance, only some of which require repayment. 

• Grants: Some DPA programs offer grants that don't have to be repaid. These can range from a few thousand to tens of thousands of dollars in assistance, depending on your location and eligibility. 
• Matched savings accounts: Individual development programs (IDAs) match savings at rates ranging from 1:1 (most common) up to 5:1, depending on the program.
• Forgivable loans: Forgivable loans are down payment loans that reduce the debt you owe each year you remain in the home until the debt is eliminated.
• Low-interest loans (second mortgages): Some lenders offer low-interest loans you can use for a down payment. In some cases, the payment might be deferred for a short period of time.
• Deferred-payment loans: Some down payment assistance programs offer loans with a deferred payment. When you sell (or, in some cases, refinance), you’ll repay the loan with interest using proceeds from the sale.
• Shared equity assistance: Also called shared appreciation loans, these loans require repayment when you sell the home. You’ll also owe a percentage of the home’s appreciation at that time.

While not technically DPA programs, government-backed loans, like FHA loans, allow buyers to purchase a home with a very small down payment.

Down payment assistance programs in 2026

Down payment assistance programs are available at the national level, as well as through state and county agencies. Here are some options to find a program.

State-chartered housing financing agencies (HFAs)

Your state’s housing finance agency (HFA) is a good resource. HFAs establish community development programs and help residents find affordable housing. However, some states have better DPA programs than others.

“Begin with the state housing finance agency,” advises Alexei Morgado, a Realtor and CEO and founder of Lexawise, a real estate exam prep company. “Their websites list not just statewide programs, but the lenders actually approved to offer them. That second part matters more than most people expect. I’ve had clients disappointed at their own banks, which could not provide any assistance as they weren’t part of the approved lenders list.”

Each year, state HFAs help between 250,000 and 275,000 homeowners and renters across the U.S. According to the National Council of State Housing Agencies (NCSHA), the median income of an HFA-financed buyer is less than $75,000, and 90% are first-time homebuyers.

They may not be the only local option, though.

“From there, I always tell buyers to check their county’s housing or community development office separately,” explains Morgado. “In South Florida, for example, I’ve seen programs in places like Miami-Dade, Broward, and Palm Beach with completely different rules, funds, and deadlines.”

National Homebuyers Fund (NHF)

The National Homebuyers Fund (NHF) is a nonprofit that offers down payment and closing cost assistance in most U.S. states. Borrowers can access up to 5% of the mortgage amount. 

According to NHF, its credit score requirements are flexible, both first-time and repeat buyers are eligible, and the income limits are “higher than might be expected,” so it's worth exploring your options even if you believe you make too much money to qualify.

Chenoa Fund

The Chenoa Fund is a national down payment assistance program designed for borrowers with a minimum credit score of 600 or higher. There are no income limits. It's designed to cover the 3.5% or 5% required down payment for FHA loans. Assistance is offered as either a forgivable or repayable second mortgage loan.

The program is administered by CBC Mortgage Agency, a nationally chartered housing finance agency and Tribally Designated Housing Entity of the Cedar Band.

NeighborWorks America

The NeighborWorks America nonprofit can match you with a homeownership counselor to provide education through the home-buying process and help you find the best down payment assistance programs.

Government-backed loans

Government-insured loans aren’t technically considered assistance programs, but make homeownership accessible by allowing borrowers to qualify with smaller down payments.

• FHA loans: FHA loans require 3.5% down if your credit score is 580 or higher, or 10% down if your credit score is between 500 and 579.
• VA loans: Eligible service members (active duty and veterans) and their spouses can qualify for a VA loan with no down payment. 
• USDA loans: USDA loans are available for eligible rural homes with no down payment, as well as longer repayment terms and low rates.
• Fannie Mae: Fannie Mae offers HomeReady mortgages with down payments as low as 3% for borrowers with a 620 credit score or higher who make less than 80% of their area’s median income.
• Freddie Mac: Similarly, Freddie Mac’s Home Possible mortgages are available with a 3% down payment. Income limits are capped at 80% of the area's median income.

These loans may also offer more competitive rates for borrowers without perfect financial credentials.

How do you find and apply for down payment assistance?

If you are looking for down payment assistance, here are some places to start your search:

• Your state’s housing finance authority: Find out what programs are available in your state and which lenders are approved for those programs.
• Your county government: Local county governments (and city governments) may also have DPA resources. Visit their website or call for more information.
• The U.S. Department of Housing and Urban Development (HUD): The HUD website offers resources, including information on DPA programs by state.
• Housing counselors: Use the Consumer Financial Protection Bureau to locate housing counselors in your area. NeighborWorks America also has a network of housing counselors who can help you find down payment assistance programs.

You’ll need to work with an approved lender to receive most forms of down payment assistance. Before searching for a lender, find out what program you intend to use. Then, look for the best mortgage lender from the list of those approved for that program.

Pros and cons of down payment assistance

Down payment assistance programs have obvious benefits, including making homeownership more attainable. However, there are also drawbacks to consider as well. Here are the pros and cons.

Pros

• Housing affordability: According to the National Association of Realtors, a household earning $50,000 could only afford 8.7% of listings in 2025 down from 9.4% a year ago. Down payment assistance programs help potential buyers overcome a major hurdle by helping them put more money down.
• Earlier wealth building: Homeownership is a crucial part of wealth building in the United States. “DPA programs let buyers get into a home years earlier than they could on their own, which means real wealth-building time they’d otherwise miss out on by renting,” explained Morgado.
• More cash reserves: Homeownership comes with a lot of surprise expenses. Buyers who get help with their down payments can focus on saving more money to build their emergency fund to prepare for unexpected repairs. 
• Help with closing costs: Down payment assistance programs sometimes help with closing costs as well. These can run from 2% to 5% of the loan cost, and they can also be a barrier to homeownership. 

Cons

• Potentially higher interest rates: If you qualify for down payment assistance through an approved lender, the mortgage could come with a higher interest rate, according to Morgado.
• Slower loan processing: Morgado also warns that using down payment assistance can lengthen the time to close. “In competitive offer situations, buyers using [slower] DPA sometimes lose out to conventional buyers, even with equal offers,” says Morgado.
• Higher monthly payments: If your DPA comes in the form of a second, low-interest mortgage, and payments aren’t deferred, you’ll be responsible for your monthly mortgage payment and the second loan repayment.
• Moving restrictions: If you accept a forgivable loan, you’ll need to remain in the home for the required length of time before it’s forgiven. This isn’t a problem if you plan to stay in the home for decades, but if you intend this to be a “first home,” not a “forever home,” keep the timeline in mind.