Your Guide to Down Payment Assistance Programs and Low Down Payment Options

Buying a home is no small feat. With rising home prices, higher interest rates, and a persistent shortage of affordable listings, many buyers find themselves up against the same major barrier: saving for a down payment.


According to Bankrate’s 2025 Home Affordability Report, 81% of hopeful homeowners cited down payments and closing costs as significant hurdles. 


To help address affordability concerns, there are thousands of lending options available to help ease that burden—many of which are underused simply because people don’t know they exist.



Down Payment Assistance Programs 


In early 2025, Zillow reported that nearly 5 million unique users are searching for down payment assistance programs. 


And as of the end of 2024, there are nearly 2,500 active down payment assistance programs across the country. 


Down payment assistance is currently available in all 3,143 U.S. counties, and more than 2,000 counties offer 10 or more programs. These initiatives are designed to reduce the financial barriers to homeownership—especially for first-time, low- to moderate-income, or underserved buyers.


What You May Expect of Down Payment Assistance: 

  • Average assistance: $18,000
  • Can reduce loan-to-value ratios by up to 6%


Down Payment Assistance May Be Used For:

  • Down payment or closing costs
  • Buying down your interest rate
  • Prepaid expenses (like taxes and insurance)
  • Reducing or eliminating private mortgage insurance (PMI)


Some initiatives even allow buyers to combine multiple down payment assistance programs to maximize support. 


Eligible Property Types:

  • Single-family homes
  • Manufactured homes
  • Multifamily homes (1–4 units)



FHA Loans – 3.5% Down


FHA loans are ideal for first-time buyers or those with lower credit scores. The minimum down payment is just 3.5%, and you can use gift funds to cover it.


Who can gift funds for an FHA loan?

  • Family members
  • Employers or labor unions
  • Close friends with a documented relationship
  • Charitable organizations
  • Government agencies


FHA loans also allow higher debt-to-income ratios and require less stringent credit history than conventional loans.



VA Loans – 0% Down


Only 30% of eligible Veterans are aware they can buy a home with no down payment using a VA loan. 


VA loans are a fantastic benefit for eligible Veterans, active-duty service members, and certain surviving spouses.


Key Benefits:

  • Zero down payment (with full entitlement)
  • No PMI required
  • Competitive interest rates
  • May offer lower closing costs


Buyers are able to choose to put money down voluntarily to reduce their loan costs over time.



USDA Loans – 0% Down


USDA loans are designed to promote homeownership in rural and some suburban areas. 


USDA Program Highlights:

  • 100% financing available
  • Lower interest rates
  • More favorable terms than FHA or conventional loans
  • Flexible credit requirements



Closing Thoughts


Your down payment doesn't need to be a dealbreaker. Whether through local down payment assistance programs or federal loan options like FHA, VA, or USDA loans, there are multiple paths to affordable homeownership in 2025.


What are you waiting for? Give us a call to discover the best down payment options for your needs. 


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