What is down payment assistance?

A down payment is the portion of a home's purchase price paid up front, rather than the part loaned to you by a bank or mortgage provider.

The median down payment for first-time homebuyers was 9% in 2024, according to the National Association of Realtors. Saving that much can be an obstacle to homeownership for many, but banks, government agencies and nonprofits all offer down payment assistance programs (DPAs) that can help close the gap.

Down payment assistance is any grant or loan that helps homebuyers put more cash down up front. It may come from a government agency, private lender or other organization.

These programs typically have eligibility requirements, such as a minimum credit score or a maximum purchase price. Some programs are specifically for homebuyers purchasing a home in a particular geographical area, working with a specific lender, or making less than a certain percentage of the area median income.

If you're already working with a lender, ask them what options are available.

There are several types of assistance, some of which don't have to be repaid and some of which do.

Grants

DPA grants do not have to be repaid, but they are often limited to first-time homebuyers with low to moderate incomes. They may come from private lenders or federal, state or local government agencies.

For example, the Maine State Housing Authority's First Home Loan Program offers up to $5,000 toward a down payment, closing costs, and prepaid escrow expenses for borrowers who meet specific income requirements and take a homebuyer education program before closing.

Freddie Mac has a database of local, regional and national DPA programs across the U.S.

Many commercial banks have grant programs, too: Bank of America will give qualified borrowers 3% of their home's purchase price, up to $10,000, toward a down payment.

Chase Bank's homebuyer grant offers up to $7,500, which needs to be used to purchase mortgage points. But any remaining funds can be put toward the down payment.

Forgivable loans

Many cities, counties and states offer forgivable loans to first-time homebuyers. Provided you stay in your home for a set number of years, you don't have to pay the money back. You may be required to work with a partner lender, however, limiting your ability to shop around.

The New York City Department of Housing Preservation and Development's HomeFirst down payment program provides qualified first-time homebuyers with a forgivable loan of up to $100,000 for a down payment or closing costs. Depending on the loan size, borrowers must use the home as a primary residence for 10 to 15 years to have their debt forgiven.

Your state housing agency website should have details on local programs or you can check Freddie Mac's DPAOne database. 

Low-interest, no-interest and deferred loans

Some DPA programs come in the form of loans with very low or zero interest. Others may allow borrowers to put off repaying the loan until the end of their mortgage term.

The Home Advantage program from the Washington State Housing Finance Commission allows buyers to take out a second mortgage to help with a down payment. The loan has a 0% interest rate and payment is deferred for 30 years.

If you don't meet the requirements for down payment assistance, most lenders offer mortgages with low down payment requirements.

SoFi also offers mortgages with 3% down for qualified first-time buyers. Borrowers may also earn a 0.25% rate reduction on a 30-year fixed-rate mortgage and up to $9,500 cash back if they buy their home through SoFi's Real Estate Center.

ONE+ by Rocket Mortgage is another low-down-payment option that allows qualified borrowers to put as little as 1% down. Rocket will add another 2% to the pot, starting you out with 3% equity.

Among other requirements, borrowers must make 80% or less of the area median income and have a credit score of at least 620.

Government-backed mortgages like VA loans, USDA loans and FHA loans typically have lower down payment requirements. They also have specific eligibility criteria, however, and the amount of your down payment will vary based on your credit score and other factors.

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