Down payment assistance is increasingly helping mid-income buyers borrowers bridge the gap between affording a monthly mortgage and saving enough cash to buy a home.
Need help coming up with a down payment? For many buyers, that help already exists. More than 2,600 down payment assistance programs are available nationwide, offering financial support that goes well beyond first-time or low-income buyers. According to Down Payment Resource, there are currently 2,624 programs across the U.S., with an average benefit of about $18,000 — a meaningful boost for buyers struggling to accumulate upfront cash.
While many people assume these programs are only for first-time buyers, that’s no longer the case. About 38% of programs are open to repeat buyers, and roughly 10% have no income limits at all. Most assistance programs are administered by state or local housing agencies, though some are offered through private employers. Every state has at least one program, with California leading the nation at 348 programs.
Historically, down payment assistance was designed for low- to moderate-income households, typically those earning no more than 80% of an area’s median income. Around 2020, however, affordability challenges spread well beyond that group. As home prices rose faster than wages, income limits began to expand — and in some cases disappear entirely — says Down Payment Resource CEO Rob Chrane. “As more and more people have become impacted by the high cost of housing,” he notes, assistance “has almost become mainstream.”
Some buyers use these programs strategically to preserve savings, keeping more cash in the bank rather than tying it up in a home purchase. Others, according to Miki Adams of the Cedar Band Corporation Mortgage Agency, truly need the help. “It’s for people who don’t have the ability to save for a down payment,” she says. “It’s a real struggle.”
Here’s a closer look at the types of assistance available and how they work:
Second mortgages:
These loans sit behind the primary mortgage and are commonly used to cover down payments or closing costs. They come in several forms. A “hard second” requires immediate monthly payments with interest. A “soft second” defers payments for a set period and may be partially or fully forgiven. A “silent second” requires no payments until the home is sold, refinanced, or the loan matures.
Examples include Alexandria, Virginia’s Flexible Homeownership Assistance Program, which provides $20,000 to $50,000 as a zero-interest deferred loan, and New York City’s Bronx HOME program, offering up to $40,000 with incremental forgiveness. In Indianapolis, EdgeFund offers second mortgages of up to 30% of a home’s purchase price at 0% or 2%, depending on location.
Grants:
Grants are direct monetary awards with no repayment requirement and no lien on the property. In Long Beach, California, the city’s First-Time Homebuyer Assistance Program provides $25,000 to qualified buyers earning up to 200% of the area median income, with no home price cap.
Mortgage credit certificates:
These programs provide federal income tax credits to qualifying buyers. In Escambia County, Florida, first-time buyers can receive mortgage credit certificates equal to 20% of their annual mortgage interest, usable each year they occupy the home.
Combined assistance:
Many buyers can layer multiple programs together. While $18,000 is the national average benefit, some programs offer significantly more. San Francisco’s Down Payment Assistance Loan Program provides up to $500,000 for eligible buyers earning up to 200% of the area median income. The loan carries zero interest, deferred repayment and shared appreciation, and demand is so high that access is determined by lottery.
Most down payment assistance programs apply to more than just single-family homes. Nearly all allow condominium purchases, and about 30% also support buyers of duplexes, triplexes and four-plexes. Some even apply to half-duplex properties with separate ownership.
These programs also work with a variety of loan types, including government-backed mortgages. The Cedar Band Corporation Mortgage Agency partners with more than 200 lenders nationwide to offer 3.5% to 5% second mortgages for borrowers using FHA loans. These loans may be repayable or forgiven after 42 months of on-time payments. Panorama Mortgage Group runs a similar program, forgiving its 3.5% second mortgage after 36 months, with minimum credit scores as low as 600.
Income limits vary widely by location. In some California counties, eligibility extends above $300,000 in household income. In Denver, the cap is $210,150, while statewide programs in Washington exceed $200,000. For many middle-income buyers, these thresholds mean assistance is well within reach — if they know where to look.
