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FHA Down Payment Assistance: Everything You Need To Know

March 28, 2024 5-minute read

Author: Kevin Graham


Loans backed by the Federal Housing Administration (FHA), don’t require you to be perfect. Because of this, FHA loans can be the best option if you’re building up your credit or you’ve had blemishes in the past. They also allow for down payments as low as 3.5%.

But even with a lower down payment requirement, you may still find it hard to get the funds needed to pay it. If you can afford the monthly payment, but the upfront cost is an issue, you may be able to use down payment assistance on FHA loans.

Can You Get Down Payment Assistance With An FHA Loan?

The down payment requirements for an FHA loan vary depending on your qualifying credit score. If your median credit score is in the range of 500 – 579, you need a 10% down payment. But most lenders, including Rocket Mortgage®, require a median FICO® Score of at least 580. At 580 or better, the minimum down payment is 3.5% of the purchase price.

Home buyers with mortgages backed by the FHA can qualify for and use down payment assistance toward their purchase. However, the FHA doesn’t offer this type of program directly to borrowers.

FHA loans offer one path to affordable housing. Down payment assistance can further that objective.

See What You Qualify For


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How Does FHA Loan Down Payment Assistance Work?

When you want to apply for a down payment assistance (DPA) program with an FHA loan, you apply for the program with a third-party organization. If you meet the requirements, that organization can approve your assistance. At that point, you can apply the assistance to your down payment and closing costs for an FHA loan.

Many DPA programs are intended to level the playing field for certain types of home buyers, such as first-time home buyers. When you’re applying, one of the first things to look at is the requirements involved.

FHA Down Payment Assistance Requirements

Most DPA programs have specific qualification requirements, including:

  • First-time home buyer status: You must be a first-time home buyer. However, that doesn’t necessarily mean you’ve never owned a home before. Program requirements may vary, but often, qualifying as a first-time home buyer just means that you haven’t owned residential property in the 3 years prior to your closing date. FHA also specifically waives this waiting period for certain situations. It may be waived if you’ve only owned a home that wasn’t attached to a permanent foundation. You may also get a pass if you had a home that wasn’t built to code and bringing it to code would be more expensive than constructing a new home. Finally, there’s also an exemption if you’re a single parent or displaced homemaker who only previously owned a home jointly with a spouse.
  • Credit score: Many programs may require you to have a certain minimum qualifying credit score. This may or may not be the same as FHA credit score requirements.
  • Household income: Because many programs are targeted at low or moderate-income borrowers, you may be asked to share income information. This documentation includes things your lender may already be asking for such as pay stubs, W-2s, 1099s, tax returns or bank statements.
  • Homeownership course: Many of these programs require you to take some sort of homeownership course that is intended to get you ready to handle everything home buying and homeownership can throw at you. Make sure you read the requirements carefully because you may be required to take a certain course or one that has a specific certification.
  • Lender requirements: Beyond the requirements of your DPA provider, lenders are also going to have requirements around assistance they will and won’t accept and from whom. For example, many lenders, including Rocket Mortgage, don’t accept DPA that requires a lien from the DPA provider to take precedence over the mortgage being offered by the lender. We also don’t take programs that require us to be a participating lender.
  • FHA requirements: The FHA requires that those providing any form of down payment assistance that requires a second lien be an approved nonprofit.

Although it’s called down payment assistance, funds can also be used to cover closing costs. This is important because they can typically range anywhere between 3% – 6% of the purchase price.

Find out if an FHA loan is right for you.

See rates, requirements and benefits.

Types Of FHA Down Payment Assistance Programs And Loans

There are many different types of down payment assistance offered to help with a home purchase. Just be aware that many lenders, including Rocket Mortgage, may not accept all forms of DPA. It’s best to speak with a Home Loan Expert to determine what assistance is accepted. Here are several of the most common types of assistance:

  • Grants: A grant is money offered without any conditions under which you have to pay it back. You may consider this the most desirable because it’s a freebie if your application is approved.
  • Loans: You can also get a loan as DPA. In this case, the assistance is a second mortgage. Whether the assistance needs to be paid back depends on the loan type. Certain DPA can be fully forgiven if you meet conditions like living in the home as your primary residence for a given number of years or a certain amount of time working for an employer. Loans that aren’t fully forgiven need to be repaid at some point, commonly when you pay off the house, refinance or sell. DPA listed as a deferred loan has immediate payments that start toward paying back the assistance.
  • Matched savings: Matched savings programs involve an entity matching the savings of home buyers, often up to a certain amount. Typically, these are set up through state or local housing finance agencies. Rocket Mortgage doesn’t accept these funds.

Where Can You Get Down Payment Assistance With An FHA Loan?

When it comes to down payment assistance, your REALTOR® or other experienced real estate agent may be able to help you find providers in your area. Be sure to speak to your Home Loan Expert or loan officer about the types of programs they accept and who they accept DPA from. The Department of Housing and Urban Development (HUD) maintains a nonprofit directory.

Local Programs

The first place to look is at the city, county and state level. Although we don’t accept DPA from state housing finance agencies, we do take second lien assistance from municipalities. Grants are always an option as well.

HUD Database

In addition to its roster of approved nonprofits, HUD also maintains a state-level directory of home buying resources. This may include DPA options among other resources, although the programs are going to vary based on your location.


In many cases, banks, credit unions and online lenders will fund a loan that could be used toward your down payment. It’s just important to know that this will be a separate payment on top of your mortgage. It’s also included in your debt-to-income ratio. You should also be prepared to disclose documentation on the loan.

Employer Assistance

You may also be able to get assistance through your employer. These loans are often fully forgivable if you work for your employer for a certain amount of time. Be sure you understand the conditions. If not fully forgiven, there may also be stipulations that the loan is to be paid back upon a certain event or it may be a deferred loan with immediate periodic payments.

The Bottom Line

Down payment assistance may be used to help with the down payment and closing costs associated with an FHA loan. Although many programs are specifically available for first-time home buyers, you should be aware that there are many options created to assist underserved borrowers in many categories.

Down payment assistance can come in many forms. It may be a grant with no payback requirement at all. Other assistance may be forgivable under certain circumstances. Still, other programs require assistance to be paid back after certain events happen. A deferred DPA loan has periodic payments that begin immediately.

Now that you understand your DPA options, feel free to start the mortgage process with confidence!

Get approved to buy a home.

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Kevin Graham

Kevin Graham is a Senior Blog Writer for Rocket Companies. He specializes in economics, mortgage qualification and personal finance topics. As someone with cerebral palsy spastic quadriplegia that requires the use of a wheelchair, he also takes on articles around modifying your home for physical challenges and smart home tech. Kevin has a BA in Journalism from Oakland University. Prior to joining Rocket Mortgage, he freelanced for various newspapers in the Metro Detroit area.