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Understanding Down Payment Assistance


What You'll Learn

  • Down payment assistance programs are available for qualified homebuyers like you
  • Programs are available at the state, local and municipal level
  • Your lender and housing counselor should be able to help you with down payment assistance programs

You've found your first home and your lender has approved you for a mortgage. But there's one catch – you’re short of the cash you need for a down payment.

You're not alone. A great place to start for assistance is right where you live. Many state, county, and city governments provide financial assistance for people in their communities who are well qualified and ready for homeownership.

Working through your state, local, or city government, you may be eligible for:

  • Grants: Funds that you do not need to pay back as long as you own and live in your home for a specific period of time.
  • Second mortgage loans: The most common down payment source, these have low or no interest rates and the payments are deferred over a specific time period.
  • Tax credits: Certain states and local governments, including Housing Finance Agencies, issue mortgage credit certificates which reduce the amount of income tax you pay, thus giving you more available income upfront to make your down payment or pay for closing costs.

Get Started

Key Take Aways

  1. Down payment assistance programs can help qualified buyers reach their goal of homeownership

  2. Financial assistance can be provided in the form of grants, second mortgage loans or tax credits

  3. Talk with your lender or housing counselor about down payment programs – or visit HUD's directory of programs

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