State Resources
Complete Guide: How to Get Down Payment Assistance
Are you worried about your financial capacity to afford a down payment on your first home?
Good news - first-time homebuyers have the opportunity to receive down payment and closing cost assistance. They can get it from either private organizations or government agencies.
We’ll walk you through the down payment programs that will help you get closer to your house.
What is Down Payment Assistance
Down payment assistance allows first-time homebuyers to cover the down payment if they don’t have the finances to cover it themselves. The required amount differs, and some mortgage programs don't demand a down payment.
Home Closing Cost Assistance
Mortgages and grants are also available at the federal, state, and local levels to help with the closing costs. All states have unique programs for first-time homebuyers.
Here's another lesser-known detail: assistance is also available for repeat homebuyers.
Usually, closing cost assistance is given by state or local housing commissions which are authorized by the HUD. However, private lenders and nonprofits can also assist.
While this aid is typically aimed at low and average-income homebuyers, there are exceptions to this rule. For instance, expensive cities have high-income limits to be eligible for closing costs and down payments.
Types of Down Payment Assistance
Down payment plans are commonly provided as mortgages and grants at the local and state levels. Funds may also be available from nonprofit organizations and the private sector in the applicants' local area.
Grants
This is the most useful type of down payment assistance. The reason is that down payment assistance grants offer funds that homeowners won't have to repay. In simple words, this money is a gift.
But keep in mind that some programs titled as grants might make a second lien on your property. While there’s nothing inherently wrong with this, it’s important to be aware of all the details. Make sure to thoroughly review the terms associated with any agreement.
Furthermore, ensure that the lender is aware of the grant. If the lender is unaware, you may end up with a silent second mortgage.
Forgivable Loans
Forgivable down payment assistance are loans that also don’t demand repayment, as long as you live in a home for some years.
Such mortgages have a zero interest rate. The lender will forgive these mortgages, but as mentioned earlier, homeowners must reside in the home for a specific number of years.
Generally, lenders set a 5-year time after which the mortgage will be forgiven. However, the forgiveness period can be elongated, such as 15 to 20 years.
And in case the applicants move before the forgiveness period finishes, they will have to repay the mortgage amount.
Let's take an example: if the lender has set a forgiveness period of 5 years and you happen to sell the property within 4 years, move before completing the full 5 years, or refinance the mortgage, there's a chance you may need to repay a portion or even the entire forgivable loan.
Deferred Payment Loans
Another option to consider is being eligible for a second loan with deferred payment. Typically, these loans are intended to cover the down payment and are of a sizable mortgage amount.
Plus, there’s no need to pay back this loan until your mortgage is paid off, refinanced, or the home is sold.
Deferred payment loans are never forgiven, which means you can't leave the property without paying back. Applicants typically cover the repayment of the mortgage via the proceeds from selling the property.
Who Qualifies for Down Payment Assistance
Above 3,000 down payment programs exist in the country. Most of these are tailored to first-time homebuyers.
For instance, federal programs ($25,000 Down Payment Toward Equity Act) help lower-income first-time homebuyers and might add extra eligibility requirements.
Similarly, the Good Neighbor Next Door program is restricted to EMTs, teachers, law enforcement members, and nurses.
Other plans might demand homebuyers to reside in the new residence for at least 5 years. At the local and state levels, down payment assistance providers often operate based on geography, specifically targeting buyers in particular neighborhoods, communities, and cities.
Keep in mind that down payment assistance programs are not made to replace the buyer's primary loan. Instead, these programs improve the buyer's loan to make home purchases affordable. So, to qualify for down payment assistance, the homebuyer needs to also be eligible for a loan.
Applying for Down Payment Assistance
Local Programs
Start by hunting down programs available in your vicinity. HUD offers a list of local down payment assistance programs for all states.
Check if there are any local programs offered in your county or city. Lastly, ensure that your mortgage lender is comfortable with the program.
National Programs
When it comes to national down payment assistance programs, there’s no complete national database for down payment plans. Some programs are automatically applied, like federal tax credits or property tax abatement for first-time buyers. Other programs demand an application to be claimed.
Before applying to any program, go through the terms and conditions to guarantee they match your financial aims. For instance, some down payment assistance plans demand homebuyers to fund with an FHA loan. Other providers might enforce residency criteria of 5 minimum years.
Down Payment Assistance Programs by State
Now, let's explore the various down payment assistance programs available in different states across the USA. Additionally, we will provide direct links so you can easily access all the relevant details.
- Alabama
Alabama Housing Finance Authority -
https://www.ahfa.com - Alaska
Alaska Housing Finance Corporation (AHFC) -
https://www.ahfc.us - Arizona
Arizona Department of Housing’s Home Plus Program -
https://homeplusaz.com - Arkansas
Arkansas Dream Down Payment Initiative (ADDI) -
https://homeloans.arkansas.gov/addi - California
California Housing Finance Agency (CalHFA)-
https://www.calhfa.ca.gov - Colorado
CHAC (Colorado Housing Assistance Corporation) -
https://chaconline.org - Connecticut
Connecticut Housing Finance Authority -
https://www.chfa.org - Delaware
Delaware State Housing Authority (DSHA) -
http://www.destatehousing.com - Florida
Florida Housing Finance Corporation -
https://www.floridahousing.org/home - Georgia
Georgia Dream Homeownership Program (GDHP) -
https://www.dca.ga.gov/safe-affordable-housing/homeownership/georgia-dream - Hawaii
Hawaii Home Ownership Center -
https://hhocmortgage.org/loan-products - Idaho
Idaho Housing & Finance Association -
https://www.idahohousing.com/homebuyers/down-payment-closing-cost-assistance - Illinois
Illinois Housing Development Authority (IHDA) -
https://www.illinois.gov/agencies/agency.ihda.html - Indiana
Indiana Housing and Community Development Authority (IHCDA) -
https://www.in.gov/ihcda - Iowa
Iowa Finance Authority -
https://www.iowafinance.com/homeownership/down-payment-programs - Kansas
Kansas Housing Resources Corporation (KHRC) -
https://kshousingcorp.org - Kentucky
Kentucky Housing Corporation -
https://www.kyhousing.org - Louisiana
Louisiana Housing Corporation -
https://www.lhc.la.gov - Maine
Maine State Housing Authority -
https://www.mainehousing.org/programs-services/homebuyer/home-loan - Maryland
Maryland Mortgage Program -
https://mmp.maryland.gov/Pages/default.aspx - Massachusetts
Mass Housing -
https://www.masshousing.com - Michigan
Michigan State Housing Development Authority (MSHDA) -
https://www.michigan.gov/mshda - Minnesota
Minnesota Housing Finance Agency (MHFA) -
https://www.mnhousing.gov - Mississippi
Mississippi Home Corporation (MHC) -
https://www.ms.gov/Agencies/mississippi-home-corporation - Missouri
Missouri Housing Development Commission (MHDC) -
https://mhdc.com/services/homeowners - Montana
Montana Housing -
https://housing.mt.gov/Homeownership/Homebuyers/Down-Payment-Assistance - Nebraska
Nebraska Investment Finance Authority (NIFA) -
https://www.nifa.org/homebuyers-renters/homebuyer-assistance - Nevada
Nevada Housing Division-
https://www.homeispossiblenv.org - New Hampshire
New Hampshire Housing -
https://www.gonewhampshirehousing.com/our-programs/mortgage-programs - New Jersey
New Jersey Housing and Mortgage Finance Agency -
https://www.theroadhomenj.com - New Mexico
New Mexico Mortgage Finance Authority -
https://housingnm.org/homebuyers/mortgage-programs - New York
State of New York Mortgage Association (SONYMA) -
https://hcr.ny.gov/sonyma - North Carolina
North Carolina Housing Finance Agency -
https://www.nchfa.com/home-ownership-partners/lenders/mortgage-product-options/nc-1st-home-advantage-down-payment - North Dakota
North Dakota Housing Finance Agency (NDHFA) -
https://www.ndhfa.org/index.php/homeownership-programs - Ohio
My Ohio Home -
https://myohiohome.org/downpaymentassistance.aspx
Ohio Housing Finance Agency (OHFA) -
https://ohio.gov/residents/resources/homebuyer-incentives - Oklahoma
Oklahoma Housing Finance Agency -
https://www.ohfa.org/homebuyers/downpayment
Rei Oklahoma -
https://www.reiok.org/programs/rei-down-payment - Oregon
Oregon Housing and Community Services (OHCS) -
https://www.oregon.gov/ohcs/pages/index.aspx - Pennsylvania
Pennsylvania Housing Finance Agency -
https://www.phfa.org/programs/assistance.aspx - Puerto Rico
Puerto Rico Housing Finance Authority -
http://www.gdb-pur.com/principalsubsidiaries/housing-finance-authority03.html - Rhode Island
Rhode Island Housing -
https://www.rihousing.com/extra-assistance - South Carolina
South Carolina State Housing Finance and Development Authority -
https://www.schousing.com - South Dakota
South Dakota Housing Development Authority (SDHDA) -
https://www.sdhda.org/homeownership/downpayment-assistance - Tennessee
Tennessee Housing Development Agency -
https://thda.org/homebuyers/down-payment-assistance - Texas
Texas State Affordable Housing Corporation (TSAHC) -
https://www.tsahc.org/homebuyers-renters/loans-down-payment-assistance
Texas Homebuyer Program -
https://thetexashomebuyerprogram.com - Utah
Utah Housing Corporation -
https://utahhousingcorp.org/homebuyer/programs/downPaymentAssistance
Community Development Corporation of Utah -
https://cdcutah.org/housing-services/downpayment-assistance Buy Utah Homes -
https://www.buyutahhomes.com/down-payment-assistance-utah - Vermont
Vermont Housing Finance Agency (VHFA) -
http://www.vhfa.org/homebuyers/loanprograms - Virginia
Virginia Housing Development Authority -
https://www.vhda.com/Homebuyers/Pages/DownPayment.aspx
Virginia DHCD -
https://www.dhcd.virginia.gov/dpa - Washington
Washington State Housing Finance Commission (WSHFC) -
https://www.wshfc.org - Washington DC
District of Columbia’s Home Purchase Assistance Program (HPAP) -
https://dhcd.dc.gov/page/hpap-eligibility-how-apply-and-program-details - West Virginia
West Virginia Housing Development Fund -
https://www.wvhdf.com/home-buyers/homeownership-program - Wisconsin
Wisconsin Housing and Economic Development Authority -
https://www.wheda.com/homeownership-and-renters/home-buyers - Wyoming
Wyoming Community Development Authority -
https://www.wyomingcda.com/homebuyers
Welcome Home Wyoming -
https://www.welcomehomewy.org
Navigating Down Payment Assistance: Let Us Help You We wanted to simplify your search for the most suitable assistance program. That’s why we have collaborated with a nationwide lender that specializes in down payment assistance programs.
Click here to learn more and discover the options that best suit your needs!
Alan Reed
Alan is a real estate investor based in Northeast Pennsylvania with experience renovating and operating everything from single-family rentals to strip malls and storage facilities.
June 04, 2023 (Updated April 22, 2024)