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Coming up with a down payment is one of the hardest parts of buying your first home. The good news is that there are hundreds of grant and assistance programs designed to help. This guide covers the best options available in 2026.
What Are Down Payment Assistance Programs?
Down payment assistance (DPA) programs help buyers cover the down payment and sometimes closing costs. They come from federal, state, county, and city sources. Some are grants that never need to be repaid. Others are loans with low or no interest.
Types of Down Payment Assistance
1. Grants
Grants are free money. You do not pay them back. They are usually the most competitive programs because everyone wants them. Income limits often apply.
2. Forgivable Loans
These are loans that are forgiven after a set period, usually 5 to 10 years. You must stay in the home during that time. If you sell or refinance early, you may have to repay part or all of it.
3. Deferred-Payment Loans
No monthly payments required. The loan is repaid when you sell, refinance, or pay off the first mortgage. There is usually no interest or low interest.
4. Matched Savings Programs
You save a set amount and the program matches your savings. For every dollar you save, the program may add $1, $2, or more up to a cap.
Federal Programs
HUD-Approved Homebuyer Programs
The U.S. Department of Housing and Urban Development (HUD) approves housing counseling agencies across the country. These agencies can connect you with local assistance programs. Many offer free or low-cost homebuyer education courses that are required by most DPA programs.
Fannie Mae HomeReady
Fannie Mae’s HomeReady program allows a 3% down payment. It also allows income from a boarder or rental unit to count toward qualifying income. This is not a direct grant, but it can be combined with DPA programs.
Freddie Mac Home Possible
Similar to HomeReady, Home Possible offers a 3% down payment option. It also has income limits tied to the area median income.
State Programs
Every state has a housing finance agency that manages down payment assistance programs. Here are some examples:
| State | Program | Max Assistance | Type |
|---|---|---|---|
| California | CalHFA MyHome | 3.5% of purchase price | Deferred loan |
| Texas | My First Texas Home | 5% of loan amount | Deferred loan |
| Florida | Florida Housing | $10,000 | Deferred loan |
| New York | SONYMA Conventional Plus | 3% of purchase price | Grant |
| Illinois | IHDA Access | $10,000 | Forgivable loan |
| Georgia | Georgia Dream | $7,500 | Deferred loan |
| Washington | Washington State Housing Finance | Up to 4% of loan | Deferred loan |
| Arizona | HOME Plus | Up to 5% of loan | Grant |
Income Limits for Down Payment Assistance
Most programs have income limits. They are usually set as a percentage of the Area Median Income (AMI). Common limits are 80% to 120% of AMI, depending on the program and household size.
For example, if the median income in your area is $70,000 per year, a program capped at 80% AMI would limit eligibility to those earning under $56,000.
How to Find Programs in Your Area
Here are the best ways to find programs near you:
- HUD.gov: Search their database of HUD-approved housing counselors and programs by state.
- Your state housing finance agency: Every state has one. Google your state name plus “housing finance agency.”
- Down Payment Resource: A national database of assistance programs searchable by location.
- Your lender: Ask your mortgage lender about local programs they participate in.
- City or county housing office: Some cities have programs independent of the state.
Requirements to Qualify
Requirements vary by program, but most share these common criteria:
- Must be a first-time homebuyer (usually defined as not owning a home in the past 3 years)
- Meet income limits
- Buy a primary residence (not an investment property)
- Complete a HUD-approved homebuyer education course
- Work with an approved lender
- Meet minimum credit score requirements (typically 620+)
Employer-Sponsored Programs
Some employers offer homebuying assistance as a benefit. This is more common with large companies, hospitals, universities, and government employers. Ask your HR department if your employer has a program.
Non-Profit Programs
Organizations like Habitat for Humanity, Neighborhood Assistance Corporation of America (NACA), and local community development corporations also offer down payment help and below-market mortgages.
NACA is especially notable — they offer mortgages with no down payment, no closing costs, and no PMI, though you must complete their counseling process.
How to Apply for Down Payment Assistance
- Check your credit score and improve it if needed
- Research programs available in your state and county
- Complete a homebuyer education course
- Find an approved lender who participates in the program
- Get pre-approved for your mortgage
- Apply for the DPA program simultaneously
- Shop for a home within the program’s price limits
Need to improve your credit before applying? Read our guide on how to improve your credit score in 2026.
If you are looking for personal loan options to cover moving or other pre-purchase costs, see our picks for the best personal loans of 2026.
Frequently Asked Questions
Do I have to repay down payment assistance?
It depends on the program. Grants do not need to be repaid. Forgivable loans are forgiven after a set period. Deferred loans are repaid when you sell or refinance. Always read the terms carefully.
Can I use down payment assistance with an FHA loan?
Yes. Most DPA programs are designed to work with FHA loans. They can cover the 3.5% FHA down payment and sometimes closing costs.
What is a HUD-approved lender?
A HUD-approved lender is one that has been vetted and approved by the Department of Housing and Urban Development to originate FHA loans and work with HUD assistance programs.
Can I use down payment assistance to buy any home?
Most programs only apply to primary residences. There are also purchase price limits. Vacation homes and investment properties are almost never eligible.
How long does it take to get down payment assistance approved?
The timeline varies by program. Most take 2 to 4 weeks after you apply. Some can be faster if the program has available funds. Apply early in the homebuying process.
Rates as of May 2026. Rates and terms change often. Check with each lender for the most current information.