Down payment assistance programs: types, limits and how to apply

Down payment assistance programs give you money toward your down payment, the part of the price you pay up front, and often your closing costs, the fees to finish the purchase. Some give a grant you keep, some a loan forgiven if you stay long enough, and some a loan you repay when you sell. Before you accept, ask how long you must stay and whether it raises your interest rate.

What are the three kinds of help?

Some programs mix the kinds. North Carolina's help of up to 3% of the loan costs you nothing unless you sell, refinance or transfer the home before the end of year 15. From year 11, 20% of it is forgiven each year, so all of it is forgiven by the end of year 15. Texas's state agency offers up to 5% of the loan at 0% interest. You choose a 30-year loan repaid when you sell or refinance, or a 3-year loan that is then forgiven.

Who gives down payment help?

Most of it comes from state housing finance agencies, through lenders they approve. Cities such as Philadelphia run their own programs. Connecticut's agency also says some towns and employers give grants or loans, so ask your town's community development office and your employer's benefits office.

To find programs near you, the Consumer Financial Protection Bureau (CFPB) suggests a housing counseling agency approved by the U.S. Department of Housing and Urban Development (HUD). Find one with HUD's counselor search. The CFPB also suggests the HOPE Hotline, which you can call 24 hours a day at (888) 995-4673. Our state guides give the details for Colorado, Connecticut, Michigan, New Jersey, North Carolina, Ohio, Texas and Washington.

What are the catches?

• You need the program's mortgage. New Jersey, Connecticut and Ohio give their help only with their own first mortgage, the main loan you take to buy the home, made through a participating lender. Pick a lender that takes part.
• You must stay and keep the mortgage. New Jersey forgives its down payment loan only if you live in the home for five years in a row and don't refinance, which means replacing your mortgage with a new one. Ohio makes you repay all of its down payment help if you sell within seven years.
• It can't pay for everything. New Jersey's help can't cover costs the seller usually pays. For appraisals dated October 5, 2026 or later, Connecticut's Time to Own can't be used when the appraised value, what an appraiser says the home is worth, is 10% or more above the price.
• Income and price limits. An income limit is the most your household can earn and still get the down payment help, and these vary by county or region. For one or two people, Ohio's limits run from $98,800 to $146,700 (July 1, 2026). Connecticut's are $129,500 in most towns (June 22, 2026), and New Jersey's run from $134,600 to $154,800 (June 17, 2026).
• Credit and class rules. Minimum credit scores include 620 for Colorado and for Texas's housing agency, and 640 for Michigan. Most of these programs also require a homebuyer class, and many classes are free.
• The money can run out. Connecticut says its Time to Own program is offered "for a limited time," so ask a lender whether it is taking new loans.
• A higher interest rate. Colorado's agency says higher interest rates apply when you take its assistance. Texas's housing agency, for example, has a separate rate for buyers who take no down payment help.

How can a higher rate cost more than the down payment help?

A higher rate costs you a little every month for as long as you keep the loan. Over enough years, it can cost more than the down payment help was worth.

Say you buy a $250,000 home with 3% down, so you borrow $242,500 for 30 years. At a made-up rate of 6.50%, your monthly payment for the loan alone is $1,532.76. At 7.00%, it is $1,613.36, or $80.60 more each month. That adds up to about $6,770 over seven years and about $9,670 over ten. A grant of 3% of the price would be $7,500, so in this example the higher rate costs more than the grant after about 7 years and 9 months.

This leaves out taxes, insurance and any deferred loan you may have to repay. Before you choose, ask your lender for the monthly payment with the down payment help and without it. Then compare the totals for the number of years you plan to stay.

How do you apply?

1. Find your state's programs on HUD's state pages: pick your state for its homebuying programs. Or ask a HUD-approved housing counselor which programs serve your area.
2. Pick a participating lender and ask for the monthly payment with and without the down payment help.
3. Take the required class and keep the certificate.
4. Check the limits for your county or region, and ask exactly what ends the forgiveness: selling, refinancing, renting the home out or moving.
5. Get the terms in writing before you sign: how much you get, how it is repaid or forgiven, and what rate comes with it.

The Federal Trade Commission warns that the government doesn't contact you out of the blue about grants, and no agency will ask you to pay a fee to get one. Start from the agency's own website, and never pay for a list of grants.

What should you do next?

Use our qualify check to see which open homes for sale fit your household's income, and browse open listings and open housing lotteries near you. Our guide to affordable homes for sale explains homes sold below market price. Our guide to first-time buyer grants explains the grants that exist and how to spot fake ones. To start with your own state, see our guide to first-time home buyer programs.