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 needed for a down payment. Help may be available.

Where to turn for help

Every year, many state, county and city governments provide financial assistance for people in their communities who are well-qualified and ready for homeownership. Requirements vary, but if you're eligible, you could receive down payment assistance ranging from a few thousand dollars to larger amounts, depending on your needs, your qualifications and where the home is located.

Additionally, many programs specifically benefit veterans, Native Americans, and workers employed in education, health care, law enforcement and firefighting are available.

Types of help

  • Grants - Funds that you do not have to pay back, as long as you own and occupy your home for a certain period of time.
  • Second mortgage loans - The most common down payment source, many second mortgage loans offered by state and local governments have low or zero interest rates, and the payments are deferred over a specified time span and, in many cases, the loan is completely forgiven over time.

  • Tax credits - Certain states and local governments, including housing finance agencies (HFAs), issue mortgage credit certificates, which reduce the amount of federal income tax you pay. This makes more money available upfront for your down payment or closing costs.

Get started

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Reach out to your housing counselor and ask them about state and local down payment assistance programs. They should be able to point you in the right direction.

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The U.S. Department of Housing and Urban Development (HUD) gives grants to state and local organizations nationwide to help homeowners bridge the down payment gap. To find the programs in your area, check out HUD's listing.

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State and local HFAs administer down payment assistance programs that you may be eligible for. Ask your lender about DPA One®, a free tool from Freddie Mac that can help you find down payment assistance programs available in your area.

Be sure to talk with your lender about all down payment options and explore down payment assistance programs you may be eligible for. Equipped with knowledge and some help with the down payment, homeownership may be within your reach.