Down Payment Assistance Programs by State: Grants and Forgivable Loans (2026)

Find programs in your state

Start with the state where the property will be located. Use the official state housing finance agency, local housing department or HUD's homebuying-program directory to identify currently funded programs. For every result, verify the program administrator, geographic coverage, assistance type, maximum benefit, income and purchase-price limits, first-time-buyer definition, eligible first mortgage, education requirement, repayment triggers and date last updated.

Program availability and funding can change. Confirm the current terms with the official administrator and the participating first-mortgage lender before including assistance in a purchase budget.

Grants vs loans: four assistance structures

The word “grant” should appear only when the official program documents define the assistance that way. A loan with no current monthly payment is still a loan when a balance remains payable later.

What assistance can cover

Depending on program rules, funds may be available for:

• Part or all of the required down payment;

• Eligible closing costs;

• Prepaid taxes or insurance;

• Interest-rate reduction or other approved loan costs;

• A combination of permitted purchase expenses.

Assistance generally cannot be assumed to cover every item on the Loan Estimate. Ask the administrator and first-mortgage lender to identify the permitted uses in writing.

Eligibility rules to verify for your state and county

Household income

Programs can use household income, qualifying income or another defined calculation. The people whose income must be counted can differ from the borrowers shown on the first mortgage.

Verify:

• Applicable county or metropolitan area;

• Household size;

• Income-measurement period;

• Included and excluded income;

• Current published limit.

First-time-buyer status

Many programs use a definition based on whether the buyer has owned a principal residence during a stated lookback period. Some waive the first-time-buyer rule for targeted areas, veterans or other eligible groups. Current renter status alone does not establish eligibility.

Property and occupancy

Common conditions can include:

• Property located inside the program area;

• Purchase-price limit;

• One-unit primary residence;

• Eligible condominium, manufactured home or multi-unit rules;

• Move-in deadline;

• Continued primary-residence occupancy.

First mortgage and participating lender

Assistance usually operates with an approved first-mortgage structure. The program may require:

• A specific FHA, VA, USDA or conventional product;

• A participating lender;

• A fixed-rate mortgage;

• Maximum debt-to-income or minimum-credit standards;

• Completion of homebuyer education or counseling.

The first mortgage and the assistance should be reviewed as one financing package.

How forgiveness actually works

A statement such as “forgiven after five years” can describe several schedules:

• The full balance is forgiven at the end of year five;

• A percentage is forgiven each month or year;

• Forgiveness begins only after an initial period;

• The balance is forgiven only if every occupancy and compliance condition is met.

Ask for the promissory note, deed of trust or mortgage, program agreement and forgiveness schedule before treating the assistance as a permanent grant.

Three examples showing why the structure matters

Example 1: true grant with eligible-cost limits

A program awards $10,000 with no repayment when its conditions are met, but permits the funds only for down payment and approved closing costs. The buyer still needs separate funds for inspections, moving and any required reserves.

Example 2: five-year forgivable loan

A buyer receives $15,000 with no monthly payment. The balance is forgiven over five years while the home remains the buyer's principal residence. Selling or refinancing after year two may leave part of the balance payable.

Example 3: deferred second mortgage

A buyer receives $20,000 with no current monthly payment. The complete balance becomes due when the home is sold, refinanced, transferred or paid off. The assistance reduces today's cash requirement while creating a future obligation.

These examples are illustrations. The signed program documents control the actual result.

Compare assistance using the complete mortgage package

For every program, record:

An assistance package can reduce upfront cash while using a first mortgage with different pricing than a separately available loan. Compare the combined monthly payment, upfront funds and future repayment obligations.

Questions to ask the program administrator

1. Is funding currently available and reserved before or after contract acceptance?

2. Is the assistance a grant, forgivable loan, deferred loan or amortizing second mortgage?

3. Which event can trigger repayment?

4. How is household income calculated?

5. Is first-time-buyer status required, and how is it defined?

6. Which lenders and first-mortgage products are eligible?

7. Which closing items may the funds cover?

8. Is homebuyer education or HUD-approved counseling required?

9. What happens after a sale, refinance, transfer, rental conversion or early payoff?

10. Are recapture tax or shared-appreciation provisions involved?

Use housing counseling as an independent resource

HUD-participating housing counseling agencies can provide prepurchase counseling and homebuyer education. Availability, language support and fees vary; HUD states that participating agencies must disclose permitted fees and waive them when the client cannot afford them.

Use HUD's official search rather than relying on an unverified directory:

• Find a HUD-participating housing counseling agency

• Learn about HUD housing counseling