Down payment assistance is money from a housing program that helps cover the down payment, and sometimes closing costs, when you buy a home. It is used together with a regular mortgage. Programs have their own rules on income, purchase price and the type of loan, and some of the help must be repaid while some does not.
Assistance programs exist because many people can handle a monthly payment long before they can save a lump sum. The programs are usually run by state or local housing agencies and delivered through approved lenders.
Each program is tied to a particular kind of first mortgage. That pairing matters, because the assistance and the loan together decide your total cost. It is worth comparing the numbers with and without assistance.
Most programs ask you to live in the home as your main residence and to complete a homebuyer education course. Many have limits on household income and on the price of the home.
Related questions
Is down payment assistance only for first-time buyers?
No. Some programs are limited to first-time buyers and some are open to repeat buyers.
Do I have to pay it back?
Sometimes it does not have to be repaid and sometimes it does. How the help is structured varies by program, so it is important to understand the one you are considering.
How do I find out what I qualify for?
A lender who works with these programs can check your income, the area and the home price against the current rules.
