Many first-time buyers do not realize that down payment assistance programs exist in every state. These programs provide grants, forgivable loans, and second mortgages that can cover part or all of your down payment and closing costs. The challenge is knowing where to find them and how they work.
Find lenders that work with down payment assistance programs: Compare participating lenders on LendingTree — not all lenders accept DPA program financing.
Types of Down Payment Assistance
Grants
Grants are funds you do not repay. They are typically offered by state Housing Finance Agencies (HFAs), local governments, and non-profit organizations. Grant amounts typically range from $2,500 to $10,000, though some programs offer more. Most grants require you to remain in the home for a minimum period (typically 3–5 years) or repayment may be triggered.
Forgivable Second Loans
A second mortgage for down payment assistance that is forgiven (wiped out) after you stay in the home for a specified period — typically 5–10 years. If you sell or refinance before the forgiveness period, you repay the remaining balance. The interest rate on these loans is often 0%.
Deferred Payment Second Loans
A second mortgage with no monthly payment. The full balance (plus any accumulated interest) is due when you sell, refinance, or pay off the first mortgage. Common in programs with 0% interest, allowing buyers to use the assistance without ongoing payment obligation.
Matched Savings Programs (IDAs)
Individual Development Account programs match the savings you put away for a down payment. For every dollar you save, the program contributes $1–$3 to a matched account. These programs are slower but result in larger down payments for disciplined savers.
National Programs
FHA Loans + State HFA Second Loans
The most common structure: an FHA first mortgage from a participating lender paired with a state HFA second mortgage for down payment and/or closing cost assistance. This allows buyers to get into a home with as little as 0% out of pocket in some programs.
Fannie Mae HomeReady and Freddie Mac Home Possible
These conventional loan programs with 3% down are specifically designed to be compatible with down payment assistance from HFAs and other sources. They also offer reduced PMI rates for buyers who complete homebuyer education courses.
HUD-Approved Housing Counseling
Free or low-cost housing counseling from HUD-approved agencies is required by many DPA programs and is available independent of program enrollment. Counselors help buyers understand their budget, loan options, and available programs. Find local agencies at hud.gov.
How to Find Programs in Your State
Every state has at least one Housing Finance Agency (HFA) that administers down payment assistance programs. The most direct path:
- Search “[your state] Housing Finance Agency” or “[your state] HFA”
- Look for “First-Time Homebuyer Programs” or “Down Payment Assistance” in the navigation
- Compare income limits, purchase price limits, and eligible areas
- Find a participating lender — you must use a lender approved to originate the program
The National Council of State Housing Agencies (ncsha.org) lists all state HFAs with links.
Common Eligibility Requirements
Most DPA programs share similar eligibility criteria:
- First-time buyer: Defined as not owning a home in the past 3 years (not necessarily never owning)
- Income limits: Typically 80–120% of area median income (AMI); some programs go higher
- Purchase price limits: Maximum home price (varies by county and program)
- Credit score minimums: Usually 620–640, some programs accept lower
- Primary residence: The home must be your primary residence, not a rental or investment property
- Homebuyer education: Most programs require completion of an approved homebuyer education course
- Participating lender: You must use a lender approved to originate the specific program
Income Limits by Program Type
| Program Type | Typical Income Limit | Example Household (4 persons, $80K AMI area) |
|---|---|---|
| Standard HFA program | 80% AMI | $64,000/year |
| Moderate income HFA program | 120% AMI | $96,000/year |
| Target area programs | Often higher or none | Varies |
Combining DPA With Other Programs
Down payment assistance can often be stacked with other first-time buyer benefits:
- FHA loans (DPA funds the 3.5% down)
- First-time buyer tax credits if available in your state (see our tax credits guide)
- Mortgage Credit Certificates (MCCs), which convert a portion of mortgage interest into a direct tax credit
Lender Comparison
| Lender | Est. Rate Range | Min Credit Score | Min Down Payment | Best For |
|---|---|---|---|---|
| LendingTree | Varies by lender | 580 (FHA) / 620 (conv.) | 3.5% (FHA) / 3% (conv.) | Comparing multiple offers at once |
| Rocket Mortgage | Competitive market rates | 580 (FHA) / 620 (conv.) | 3.5% (FHA) / 1% (ONE+ program) | Fast digital approval process |
| Better.com | Competitive market rates | 620 | 3% | Low-fee online experience |
| New American Funding | Competitive market rates | 500 (FHA) / 620 (conv.) | 3.5% (FHA) / 3% (conv.) | Buyers with lower credit scores |
Bottom Line
Down payment assistance programs are available in every state and are significantly underutilized by eligible buyers. If your income falls within program limits, these programs can eliminate or dramatically reduce the upfront cash required to buy a home.
Find participating lenders on LendingTree — work with a lender experienced in HFA programs to maximize available assistance.
Also see: Complete first-time buyer guide | Closing costs breakdown | Tax credits and deductions