Facing a large down payment is a big concern for most home buyers, especially when that amount can equal 3% – 20% of the purchase price.

However, it’s often possible to get down payment assistance when applying for FHA loans. They can make the home buying process — especially for first-time home buyers — more affordable.

Understanding these programs and all the options available in 2025 could save you thousands of dollars on your mortgage loan and make your homeownership dreams come true.

Check your FHA eligibility. Start here (Dec 21st, 2024)

What is down payment assistance?

Down payment assistance (DPA) is money typically provided by various government and community agencies in the form of grants or low-cost loans, to assist buyers in covering the upfront costs of a down payment for their home purchase.

Is there down payment assistance for FHA loans?

The Federal Housing Administration (FHA) offers many down payment assistance programs for buyers seeking a mortgage through its loan program. The FHA is part of the U.S. Department of Housing and Urban Development (HUD), which oversees housing affordability programs.

FHA down payment requirements 2025

Typically, the minimum FHA mortgage down payment is 3.5% for borrowers with a credit score of at least 580. It’s possible to get an FHA Loan with a minimum credit score of 500 but you’ll need to make a down payment of at least 10% of the loan amount.

Who qualifies for down payment assistance?

Most DPA programs are geared toward first-time borrowers or lower-income home buyers, as HUD and other community organizations typically focus on homeownership opportunities for people who need financial assistance. A first-time buyer is usually considered to be someone who never owned a home or hasn’t owned one for the last 3 years.

Check your FHA eligibility. Start here (Dec 21st, 2024)

How does down payment assistance work?

Each program has specific criteria to qualify for assistance, which can include physical location, occupation, credit history, and income. Typically, the home must be intended as a primary residence.

Some programs do require the homebuyer to also contribute money to their down payment, which can sometimes be gifted to them. Depending on the funds available, down payment assistance can range between $10,000 to $60,000.

Types of down payment assistance

Down payment assistance grants

Down payment assistance (DPA) grants typically don’t require repayment and can be used toward your down payment or for closing cost assistance.

Down payment assistance loans

DPA loans are like a second mortgage that you will make monthly payments on, alongside your first mortgage payments. Typically, these are low-interest loans — or may even be interest-free, making them more accessible than a regular mortgage.

Down payment assistance deferred loans

As with the DPA loans above, these deferred-payment loans are like a second mortgage, however, they only need to be paid if the homeowner moves, sells, or refinances.

Down payment assistance forgivable loans

These are second mortgages that are forgiven over a set number of years (typically five but sometimes up to 15 or 20). Repayment is only required for these forgivable loans if you move, sell, or refinance before the loan is forgiven in full.

Matched savings program

Matched saving programs allow the borrower to deposit money into an account that is matched by a bank, government agency, community organization, nonprofit, or housing finance agency. The institution matches whatever buyers deposit, and then buyers can ultimately use the total funds to make their down payment.

Beware of mortgage relief scams

According to the Federal Trade Commission, mortgage relief scammers typically promise to immediately fix your housing situation but are really trying to get money from you. Some of the tactics they use include:

• Asking for an upfront fee. The Mortgage Assistance Relief Services (MARS) rule makes it illegal to request an up front fee prior to delivering services. When they do ask for these fees that typically indicates a scam.
• Not disclosing information. If the institution isn’t upfront with information, including the total price tag for their services, misrepresenting their job title, not stating the rights you have, or the consequences if their services don’t resolve your issue.
• Pressure tactics. If the institution is insisting that you work directly with them, ignore your lender, and pay with either a cashier’s check or wire transfer which makes it difficult to get your money back.

FHA down payment assistance FAQ

Can you borrow money for an FHA down payment?

Yes, but the source of the down payment is documented by FHA mortgage lenders. The money cannot be from payday advances, credit cards, or “gifts” disguised as loans from family members.

How can I avoid a down payment on an FHA loan?

No, all new FHA loans require a down payment. Sometimes the amount may only be 3.5% of the purchase price but will depend on the borrower’s credit and could increase to 10%. Other loan types, including VA or USDA mortgage programs, may allow you to buy a home without making a down payment.

How can I get money for a down payment?

FHA accepts down payments from sources including checking, savings accounts, IRAs, the sale of personal property, savings bonds, a gift fund, 401K or other investments.

How much do I need to make to buy a $300k house with an FHA loan?

Based on a 3.5% down payment and a 5% interest rate, the annual household income needed for a $300k house would be $92,650 per year.

Can you get down payment assistance with an FHA loan?

While the FHA doesn’t offer down payment assistance, local government and community agencies do offer several down payment programs, or alternatively, gifted money can be used.

Can you get down payment assistance with an FHA 203k loan?

Yes, using the same sources as you would for a FHA home loan such as available government or community programs, or gifts from family.

How long does it take to get down payment assistance?

Generally, it could take weeks to process the down payment assistance paperwork and often depends on the documentation needed by each organization and their typical turnaround time.

The bottom line: FHA down payment assistance is available

If you’re looking to buy a home but are intimidated by the upfront cost of a down payment, there may be assistance available that can help you purchase the home of your dreams without waiting years to save up the cash.

An informed FHA loan officer can help you understand your options.

Check your FHA eligibility. Start here (Dec 21st, 2024)