Help is Available for a Down Payment


One of the biggest hurdles that homebuyers can face is the down payment, which is defined as the amount of money paid at the start of the purchasing process.

The down payment for a home makes up a significant portion of the overall price.

You pay the money upfront and the mortgage takes care of the rest, but the exact amount can vary.

Thankfully, a number of assistance options are available to those that have a hard time dealing with this expense.

Down payment assistance, how it works, and how you can use it

People often overlook the wide variety of assistance options they can benefit from.

Some of these options can be a huge help when it comes to making this leap in your life.

Purchasing a home can be a challenge, from finding one that fits your finances to closing the deal on a property that works within your family’s needs and lifestyle.

Of the many assistance options out there, you may want to consider:

  • Forgivable Mortgage Loans
  • Low-Interest Loans
  • Matched Savings Programs
  • Deferred-Payment Loans
  • Grants

Forgivable Mortgage Loans

How can you view this loan? Well consider it a second mortgage.

The real difference is that the buyer doesn’t need to pay the money back as long as the borrower stays on the property for a certain amount of time.

Aside from the repayment being not a requirement as long as the terms are met, the interest rate is 0%.

The amount of funds you can receive is often enough to cover the entirety of the down payment.

If you get a forgivable mortgage loan, the lender will usually agree to forgive the loan after you have lived in the home for 5 years.

This means that after 5 years, you as a homebuyer don’t have to pay back a single cent!

However, each lender might have different rules about how long you have to live in the home before the loan is forgiven.

So it’s important to look into these rules before you decide to get a forgivable mortgage loan.

Low-Interest Loans

Once you’re in the process of finalizing your first mortgage, you’ll often get the opportunity to take out a second one.

In general, these types of loans require a repayment every month, but they do come with low-interest rates.

At times, your second mortgage loan may have no interest rate at all.

This is beneficial because it can result in savings over the course of the loan.

Matched Savings Programs

These programs are also called Individual Development Accounts.

As the name suggests, these are used for individual development, be it buying a home, starting a business, or saving for education.

To participate in such a program, people typically have to open a special savings account and make regular deposits into the account.

The program will then match the deposits.

For every dollar that a person saves, the program will add an additional dollar to their savings.

The funds from this account a person can use towards the cost of the down payment.

Deferred-Payment Loans

This is another loaning opportunity to look into if you require help with gathering funds for a down payment.

As the name suggests, the program allows you to make deferred payments.

What this means is that you can repay the second loan at a later time.

This can be until you move to a different location, refinance the initial mortgage, pay the first loan back or sell the property.

Most commonly, homeowners that choose deferred payment loans pay them back with a portion of the money they get from selling the property.


One way you might be able to get help with the down payment is by getting a grant.

The money you receive is considered a gift. Why is that even important? Well that’s because you don’t have to repay it!

While this does sound too good to be true, it’s completely real and valid, although not every opportunity is the same.

At times, the grant provider will make a second lien on your home.

A second lien is a claim that someone has on your property in addition to a first lien.

That’s why it is important to spend some time understanding all the terms of the contract.

Knowing the conditions of the agreement is crucial when accepting assistance.

Some other options worth considering

In addition to the options mentioned above, there are other options to consider:

  • Federal Housing Administration Loans
  • Veterans Affairs Loans

FHA Loans

This type of loan is a good deal for anyone looking for a significantly lower down payment.

On average, the down payment for a home is around 6% of the total price, but with FHA loans you can find opportunities that will only ask for 3.5%.

That being said, the FHA loan program has a fairly strict set of requirements you have to meet.

Nevertheless, the fact that you can gain access to a significantly cheaper down payment may make it worth your while.

VA Loans

A VA-loan is available thanks to the United States Department of Veterans Affairs (VA).

One big benefit of this loan is the fact that it comes with no down payment requirement at all.

While the terms may vary based on the lender, it’s possible to get a mortgage without making a down payment.

How long does getting support usually take?

While you may be eager to receive assistance and carry on with your homebuying process, you must remain patient.

The time it takes to get support for your down payment can depend on a number of factors.

They include the type of assistance you applied for, the type of loan, and the institution you’re borrowing it from.

This is why maintaining communication with the assistance provider is important in determining how long it’ll take for you to receive support.

Where to start?

You can find these and many more down payment support opportunities by contacting your local and state government agencies as well as the US Department of Housing and Urban Development.

Another way to learn more is by getting in touch with local housing counselors approved by the HUD.

Final word

The down payment you’ll be dealing with when buying a home can be massive.

Setting aside a large amount of money can be a challenging task for the average American family, let alone someone going through financial struggles.

This is where support programs come in, helping these households put together the funds for a down payment.

Some of these loans can be seen as a gift, as you don’t have to repay them, while others have to be repaid in full.

It all varies on the type of assistance you choose, so make sure you do your research before jumping in.

All in all, dealing with a down payment has been made much easier with these opportunities, and you’ll want to look into them if you’re planning on becoming a homeowner.