Three Government Programs That Can Help You Buy a Home With Little or No Down Payment

Buying a home in today's market is harder than ever. Home prices are near record highs, and mortgage rates have more than doubled since the pandemic. To make matters worse, wages haven't kept up with rising home prices.

According to Harvard University's Joint Center for Housing Studies, home prices compared to income reached their highest levels in 39 markets across the country in 2024—up from just 19 markets in 2019.

What Are Down Payment Assistance Programs?

Down payment assistance programs (DPAs) are designed to help people who want to buy a home but struggle to save enough for a down payment. These programs provide loans or grants to cover part or all of your down payment.

"A down payment continues to be the biggest hurdle for first-time buyers trying to enter the housing market—especially while home prices have continued to rise faster than wages," said Chloe Shubin, vice president of operations and strategy at Griffin Funding, a mortgage lender.

There are more than 2,600 of these programs available at the federal, state, and local levels. However, each program has different requirements, so it's important to research which ones you qualify for.

Three Programs That Can Help

1. National Homebuyers Fund

This nationwide program helps buyers cover their down payment or closing costs. You can receive assistance of up to 5% of your home loan amount. For example, if you're buying a home with a $400,000 loan, you could get up to $20,000 in assistance.

Key benefits:

• You don't have to be a first-time homebuyer
• Works with several types of mortgages, including FHA and conventional loans
• Income limits are more flexible than many other programs
• Some options require a minimum credit score of just 640
• Allows a debt-to-income ratio of up to 45%

2. Chenoa Fund

The Chenoa Fund is another national program that offers down payment assistance of 3.5% to 5% of your mortgage amount. It works with Federal Housing Administration (FHA) loans and Fannie Mae mortgages.

Key benefits:

• No income limits
• You don't have to be a first-time homebuyer
• Provides support for up to 18 months after you buy your home through Money Management International, a nonprofit organization
• Includes educational materials and monthly support to help you succeed as a homeowner

The Chenoa Fund assistance is set up as a second mortgage, meaning you'll have your primary mortgage plus a smaller loan from Chenoa.

3. Dream for All (California Only)

This program is specifically for California residents. It offers assistance equal to 20% of your down payment or closing costs, with a maximum of $150,000.

Eligibility requirements:

• You must be a "first-generation" homebuyer (meeting specific criteria set by the California Housing Finance Agency)
• Your income must fall within the program's limits, which vary by county
• Applicants enter a drawing, and winners receive vouchers for their home purchase

How repayment works:
This is a "shared appreciation" loan, which means you repay the loan amount plus 20% of any increase in your home's value when you sell or refinance.

Finding the Right Program for You

Since these programs vary by state and local area, it's important to explore all the options available where you live.

"The most suitable DPA programs vary by state and local market, so prospective buyers should evaluate the options available in their area rather than relying on a single national program," said Lisa Lund, a broker and owner at Lund Mortgage Team.

The Bottom Line

Many people have the income and credit history to qualify for a mortgage but simply don't have enough savings for a down payment.

These programs can bridge that gap and help more families move from renting to owning their own home.

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Need help with your down payment? Find resources and assistance here!