How to Get Down Payment Assistance

Quick Answer

You can get down payment assistance by researching programs in your area and reviewing the eligibility criteria. Complete an application for the programs you qualify for, and funds will be sent to your lender if you’re approved.

Exterior view of multifamily residential building; Mountain View, San Francisco bay area, California

Down payment assistance can make homeownership more accessible by helping you contribute to the upfront cost of owning a home. You can get down payment assistance by working with your lender and applying for programs in your area. Here's a guide to different types of down payment assistance and how to qualify.

What Is Down Payment Assistance?

Coming up with a down payment is often one of the biggest challenges in buying a home. Down payment assistance programs help homebuyers finance their down payment and move closer to purchasing a home. These programs typically target specific homebuyers, such as first-time homebuyers, individuals with low to moderate income or veterans, for example. Assistance can come in the form of grants, second mortgages or tax credits.

Availability and eligibility criteria vary by state. Eligibility requirements often include things like income, home purchase price and home location.

How to Qualify for Down Payment Assistance

Qualifying for down payment assistance involves meeting a variety of criteria, depending on the program. Examples of criteria include:

  • First-time homebuyer status, which generally means you haven't owned a home in the past three years
  • Household income within a specific range based on your area's median income
  • Completion of a homebuyer education course
  • Credit score at or above a specific threshold, usually 580 to 640 or higher
  • Maximum debt-to-income (DTI) ratio limits

How to Get Down Payment Assistance

There are a variety of down payment assistance programs available depending on your location. Your state housing finance agency is a good place to start your search, though local municipalities may offer assistance programs as well.

Here's each type of down payment assistance program and how it works.


How it works: Grant money helps cover the cost of the down payment and doesn't have to be repaid. Funds are available to eligible homebuyers on a first-come, first-served basis.

How to qualify: Down payment assistance grants are often available to first-time homebuyers with income below a certain percentage of the area median income. Completion of a homebuyer education course is a common requirement.

How to apply: You'll generally need to apply for a down payment assistance grant through a participating lender as part of the standard mortgage process. The lender will gather the necessary documents to qualify you for the grant then submit them to the program for approval.

Second Mortgage

How it works: A second mortgage can be used to cover the down payment, sometimes with a lower interest rate. The mortgage is paid alongside your primary mortgage, often with a single monthly payment.

How to qualify: Eligibility varies depending on the program. Some programs are only available to first-time homebuyers and may be restricted to specific locations. Home sales price and income limits may apply.

How to apply: Either submit an application to the program directly or apply through a participating lender as part of the regular mortgage process. You can find a participating lender through your local or state housing finance agency.

You'll need many of the same documents you'd need to apply for a first mortgage, including recent tax returns and credit reports. Depending on the program, additional documents may also be necessary.

Soft Second Mortgage

How it works: Soft second mortgages may come in the form of a forgivable or deferred-payment second mortgage. This means payments may not be required right away and, in some cases, the loan doesn't have to be repaid unless you move, sell your home or refinance your first loan.

How to qualify: Qualification for forgivable and deferred-payment down payment loan options varies based on geography, credit standing and income. Completion of a homebuyer education course may be required depending on the program.

How to apply: Your local or state housing finance agency can help you identify participating lenders. You can apply directly to the program or through a participating lender when you apply for a mortgage.

Tax Credits

How it works: Mortgage credit certificates help free up money for your down payment by reducing your federal income tax liability. You can claim a tax credit on a percentage of the mortgage interest you pay each year, depending on the program.

How to qualify: Typically, you must meet income limits based on your location and family size. Additional limits may apply to the sale price of homes. State and local governments make credits available and determine eligibility criteria.

How to apply: If you're eligible, contact a lender participating in your local Mortgage Credit Certificate (MCC) Program. The lender will pre-qualify you during the standard mortgage process and submit your application to your local or state house finance agency for review and approval. You may have to pay an additional fee when the lender submits your application.

If you're approved and the program still has funds available, you'll receive an MCC certificate a few weeks after closing.

Pros and Cons of Down Payment Assistance


  • Lower upfront costs: Down payment assistance programs can make home ownership more accessible by lowering the upfront costs needed to purchase a home. Some programs can be combined to maximize assistance.
  • Homebuyer education: Many programs require completion of a homebuyer education course which prepares you for the responsibility of owning a home.


  • Qualifying can be challenging: Available programs vary by location and have specific eligibility requirements, including income limits and credit score thresholds. Some programs are available exclusively for first-time homebuyers. Homes may need to be in designated areas and are subject to sales price limits, limiting your eligibility or purchasing options.
  • Lending options may be limited: Down payment assistance programs might be limited to specific participating lenders or available only for certain loan types.
  • Potential tax and financial implications: Some aid may be considered taxable income, which can affect tax liability and eligibility for certain relief programs.

Alternative Ways to Get Help Buying a House

If you don't qualify for down payment assistance, there are other programs and resources that can help you navigate the homebuying process.

  • Low down payment programs: Consider taking advantage of government-backed mortgages or other low down payment loan programs.

  • Gifts from family: Some loan programs allow you to use gift funds for your down payment. Find out the guidelines: You may have to provide a letter stating the money is a gift and won't need to be repaid.
  • Employer assistance: Your employer may offer homebuyer assistance benefits in the form of a grant or loan.
  • Seller assistance: Some sellers are willing to pay a portion of homebuyer closing costs. If your seller is willing to negotiate, this can free up money that you can use for your down payment.
  • Personal or retirement savings: Consider delaying your home purchase while you save more money. Alternatively, you may take a penalty-free withdrawal from an IRA to make your down payment—just have a plan for repaying the money so you don't miss out on the funds in retirement.

Frequently Asked Questions

  • The time it takes to get down payment assistance varies depending on the program and your circumstances. Programs that involve a second mortgage may require an underwriting process which can extend the timeline. You can help the process by promptly completing the homebuyers education course, gathering documentation in advance and responding to inquiries quickly.

  • Down payment assistance can increase the time it takes you to get to closing. Delays in the application, approval, underwriting or funding stages can extend the closing timeline.

The Bottom Line

Saving up a down payment can be challenging, especially for first-time homebuyers. Down payment assistance programs help fill that gap by covering all or part of the cost.

Many programs have minimum credit score requirements, so checking your credit score early in the process is a smart move. Improving your credit score, if needed, will help put you in a better position to qualify for down payment assistance and more attractive home loans.