Loans Buy a home Down payment assistance
Down payment assistance: loans and grants
Most down payment assistance is a second loan, secured by a lien on your home and repaid when you sell or refinance. Some is a grant. Before anyone applies, we compare your options with and without it.
New to this loan? Start here: Down payment assistance: what it really costs A 3-minute lesson
Who it fits
Buyers with the income and credit to carry a mortgage, but not enough saved yet for the down payment and closing costs. Before assistance, it helps to know how little some loans already ask for:
- VA: no down payment with full entitlement.
- USDA: no down payment in eligible rural areas, within income limits.
- Conventional: as little as 3% down, and family gifts can cover it.
- FHA: 3.5% down with a 580 or higher credit score.
What to compare
Assistance helps when you need it to buy now and its cost stays small. Four numbers show whether it does:
- How much more the payment is each month with assistance than without it.
- What you would owe on the second loan when you sell or refinance.
- How long until the extra payments add up to more than the help.
- Whether a refinance later also means paying the second loan off.
The rules that matter
- Income and price limits set by each program, often by county.
- A home you live in. If you move out or rent the home, the second loan can come due.
- A homebuyer class for many programs.
- Some of your own money toward the purchase, for some programs.
- Approved lenders only. A program’s assistance comes through lenders approved for it, so the program also narrows the lender list.
In Southwest Colorado, assistance comes from statewide programs of the Colorado Housing and Finance Authority, from some local programs and from some employers. Income and price limits vary by county, and some are lower than the statewide figures. We price each program that fits beside your options without assistance, so you can see the difference before you apply.
Calculators and guides
- Down payment assistance: what it really costsThe lesson, step by step
- CHFA loans: what down payment help really costsCompare before you take assistance
- Budget BusterWhat everyday extras cost in a year, and how fast a down payment builds when some stop.
- What down payment help really costsHelp at closing against what it adds over time.
Common questions
Is down payment assistance free money?
Usually not. Most of it is a second loan repaid when you sell or refinance. Even a grant can come with a first mortgage that costs more each month. Compare the total cost, not only the cash to close.
Do I have to be a first-time buyer?
Not always. Many programs are for first-time buyers, and most set income and price limits. We check which programs you qualify for before you apply.
Can I use assistance with a VA or USDA loan?
VA and USDA already allow no down payment, so assistance there usually goes toward closing costs. Some programs pair with them and some do not.
What happens when I sell or refinance?
A second loan is usually due in full then, paid from the sale or the new loan. A forgivable loan may be partly due if you sell or move out before the forgiveness period ends.
Can family help instead?
Yes. Gifts from family are allowed on conventional, FHA, VA and USDA loans with a gift letter and a paper trail, and a gift places no lien on your home.