Down Payment Help: What It Is and How to Get It

Key Takeaways

• You don’t always need 20% down—some programs help you cover your down payment and even closing costs.
• Help can come as a grant (free money), a second loan, or a forgivable loan you don’t have to repay if you stay long enough.
• You usually need to meet income limits and be buying your main home (not an investment).
• These programs are often local—run by cities, counties, or states—so you have to look in your area.

What Is Down Payment Assistance (DPA)?

Down Payment Assistance programs help homebuyers come up with the cash for a down payment—usually between 3% and 20% of the home price. Some also help cover closing costs.

Types of Help You Can Get

• Grants: Free money you don’t have to pay back.
• Forgivable Loans: Loans that disappear after a few years if you stay in the home.
• Deferred Loans: Loans you don’t repay until you sell or refinance.
• Low-Interest Loans: Loans you pay back over time with low or no interest.

Who Qualifies?

Each program has its own rules, but most are for:

• First-time homebuyers (usually means no home in the last 3 years)
• Low-to-moderate income buyers
• People buying a home they’ll live in—not rent out
• People taking a homebuyer education class

Where to Find These Programs

DPA programs are usually offered by your:

• State housing agency – Check your state’s programs here
• City or county government
• Nonprofits or community lenders
• Employer or union (some big companies help workers buy homes)

Do You Still Need a Mortgage?

Yes. DPA doesn’t replace your main loan—it just helps with the upfront costs. You’ll still apply for a mortgage, usually an FHA, VA, USDA, or conventional loan.

How to Apply

Ask your real estate agent or lender if they work with any local programs. Or, check with your state housing finance agency directly. Many programs require you to take a short homebuyer class first.

Watch Out For This

• Some loans come with strings—like having to repay if you sell early.
• There may be paperwork delays—apply early!
• Some lenders don’t work with these programs—shop around.

Conclusion

If saving for a down payment feels impossible, don’t give up. Help is out there. Down Payment Assistance could turn “someday” into “this year.”