Down Payment Assistance Programs: What Options Are There, How Can You Apply, & Who Qualifies

Down payment assistance programs are designed to help would-be home buyers that are unable to cover the upfront costs of purchasing a home. There are a number of programs that will cover some, or all, of the down payment; and may also offer help with closing costs. Typically, the money is paid out at closing and handled by the lender.

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Understanding the nuances of each down payment assistance program is valuable for those that are looking for help and may qualify. The assistance can come from many different sources – federally, state, county, city, and even nonprofit agencies. Many of these programs aren’t always well-publicized. The range of down payment assistance programs available may vary based on where you plan to buy a home. In the state of Texas, for instance, the Department of Housing and Community Affairs offers an assistance program that covers up to 5% of the down payment and closing costs for eligible buyers.

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Generally, down payment assistance programs take one of three forms:

• Down payment grants

• Forgivable second mortgage programs

• Matched savings programs