What You Need to Know When Getting Help with a Home Down Payment

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When it comes to buying a home, there’s not just the mortgage rate and listing price to worry about. You also have to cover the home down payment—and if you don’t have much (or any) in savings, this could be the trickiest part of your purchase altogether.

Though you certainly don’t need to put 20 percent down like the old wives tale says, you can expect to need at least 3 to 5 percent of the sales price. A typical FHA down payment, for example, is 3.5 percent, meaning on a $200,000 mortgage, you need a down payment of $7K.

But what if you don’t have enough for even that? Are there other options for coming up with your home’s down payment? Or maybe eliminating that cost altogether? Here are the options you have:

Low home down payment programs

There are several loan types that can offer you extremely low home down payments—or in some cases, even no down payment at all. VA loans, for example, require zero down payment, though you have to be a military member, veteran, or related to one. USDA loans also require no down payment if you buy in certain rural areas of the country. Freddie Mac’s Home Ready program requires just 3 percent down.

Down payment assistance programs

Many states, cities, counties and even local nonprofit organizations offer down payment assistance programs. These can sometimes even be used toward closing costs—another big expense for soon-to-be homeowners. Typically, down payment assistance programs operate like debt-free loans; you won’t need to pay them back right away, but there will be a plan for how you’ll do so in the future.


You may also be able to get grants to put toward your down payment through certain state and federal programs. The big benefit of these is that they’re treated like gifts—you don’t have to pay them back at any time.

If you’re looking to buy a home but are worried about having the cash for a down payment, look into programs in your specific area. Check your state’s department of housing affairs, look to your city or county housing department, or research statewide nonprofits and private programs that can provide you the help you need. Homeownership is in reach no matter what your budget is; you just have to know where to look.

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Aly Yale

Aly J. Yale is a freelance writer focusing on real estate, mortgage, and the housing market. Her work has been featured in Forbes, Bankrate, The Motley Fool, Business Insider, The Balance, and more. Prior to freelancing, she served as an editor and reporter for The Dallas Morning News. She graduated from Texas Christian University's Bob Schieffer College of Communication with a major in radio-TV-film and news-editorial journalism. Connect with her at AlyJYale.com or on Twitter at @AlyJwriter.