May 19, 2022

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Do You Need Down Payment Assistance For Your Mortgage?

FHA loans

If you want to buy a home and you worry about the down payment, you may be able to get help from a state or local down payment assistance program offered in your housing market. 

If you are considering an FHA mortgage, you should know that the FHA itself does not offer down payment help, but does recommend borrowers seek such programs to help lower the overall upfront cost of the mortgage.

What kinds of down payment help is available? There are many options depending on the state where you live and whether or not you have owned property recently. 

One issue that is common for many state-level down payment assistance programs? Being either a first-time homebuyer who has never owned a home before, OR being a former homeowner who has not owned property for a specified time (usually three years but this may vary depending on the state and the program).

Do not count yourself out of the running for down payment help just because you owned property in the past. What kind of help might be offered to you?

Down Payment Grants

Typically, a down payment grant may be offered to you on a conditional basis–one common condition is being required to use the home as your primary residence and for a minimum amount of time.

In such cases, if you don’t live in the home as your main address for the specified time period you may be required to repay some or all of the down payment grant.

Down Payment Loans

Some state programs offer a “silent second” or second mortgage loan specifically to cover down payment and closing costs (depending on the program). These loans may be listed as “forgivable” if the borrower meets program requirements like a minimum occupancy time similar to what’s mentioned above.

Closing Cost Grants

Some state-level down payment assistance programs may offer separate grants for closing costs. Grants generally are not meant to be repaid but may, like down payment grants, feature minimum occupancy requirements and other restrictions.

Closing Cost Loans

As with down payment loans, closing cost loans may also be offered in cases where the down payment assistance program in question separates the two.

These loans often function in a similar manner to down payment loans which may be forgivable after a certain amount of time has passed.

Down payment and closing cost assistance programs may feature need-based requirements such as income limits, purchase price caps, and more.

But not all do–it pays to research your options carefully as there may be more than one such program in your housing market. You can usually find state-level down payment assistance programs at the official site of your state government but you can also locate them online elsewhere.

Joe Wallace - Staff Writer

By Joe Wallace

December 9, 2021

Joe Wallace has been specializing in military and personal finance topics since 1995. His work has appeared on Air Force Television News, The Pentagon Channel, ABC and a variety of print and online publications. He is a 13-year Air Force veteran and a member of the Air Force Public Affairs Alumni Association. He was Managing editor for for (8) years and is currently the Associate Editor for

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