The down payment is a barrier that stands between many people and homeownership. For many people, coming up with a down payment seems like a daunting task that prevents them from attempting to buy a house. There are some down payment assistance programs available for would-be homebuyers, making it a little easier for some to purchase a home, especially for a first-time homebuyer. There are grants and no-interest loans available in most states and cities to help first-time homebuyers pay their down payment or closing costs.

How Down Payment Assistance Programs Work

These programs usually come from nonprofit, federal, state, city, or county agencies, and they are not always well known. The programs are frequently available alongside a mortgage, and most of them intended for first-time homebuyers.

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A down payment grant gives you the funds you need for your down payment, and possibly your closing costs, and they do not have to be repaid.

Zero-Interest Loans

Sometimes the loans are forgivable, usually after a certain period of time. It does not require repayment as long as you still own and live in the house when that period is over.

There are also deferred-payment loans, that often do not require any payments until the mortgage is refinanced, the house is sold again, or the mortgage reaches the end of its term.

Low-Interest Loans

These loans have to be repaid over a set period of time, but they make it easier to purchase a home because you pay for your down payment over the course of several years, instead of all at once.

Matched Savings Program

These are good if you already have some money saved for your down payment, but not enough for the whole thing. With a matched savings program, they will make a matching contribution for whatever you put into a dedicated account.

Whether they are matching you dollar for dollar or a different ratio is different depending on the program you are using.

Qualifying For Assistance Programs

These programs have different qualifications, depending on the programs and your area, and both you and the house you want to buy have to qualify for the program.

Some of the qualifications for you include your household income, credit score, and cash reserves. Over half of the programs are only for first-time buyers, which is usually defined as someone who has not owned a home for at least three years. The majority of these programs require you to take a homeowner's education course, which can usually be taken online. You also may need to make some contribution of your own money to the purchase, depending on the program you are using.

For the home to qualify, it has to be to your primary residence and there is usually a price limit for the home.

If you are a veteran, you may qualify for the VA loan benefit, which offers loans with zero down payments, no program required.

Where You Can Find Programs

There are many lists online that have some of the programs. The FHA has a current list of down payment assistance programs on its website that it has researched, which has the programs broken down by state so you can easily find the programs available in your state. There may be some other available in your area that are not listed there, since there are so many available on a city or county level.

Todd Wilkinson is the Founder and Owner of FonHome Realty.  FonHome is a customer-centric brokerage where our clients are in control and our experienced agents are respected for providing the positive and exciting experience the real estate transaction should be. Todd is an accomplished real estate investor with an undergraduate degree in Financial Economics and a Masters’s degree in Business Administration.  Todd has held senior management and executive-level positions with the world’s two largest retailers and a successful startup venture.  Todd has served terms on the University of Arkansas Advisory Board and is actively involved with the St. Theresa School in Kenilworth.  Todd opened his own brokerage after feeling underserved in his personal experiences with real estate transactions and wanted a firm whose mission was on serving the fiduciary responsibilities guaranteed to the Buyer and Seller.  Contact Todd today for a free Comparable Market Analysis for your home or for advice on beginning your search for a new home at