Down Payment Assistance Programs 2026: Free Money for Homebuyers

Down payment is the #1 barrier to homeownership for most Americans. What most buyers don't know is that over 2,000 down payment assistance (DPA) programs exist at the federal, state, county, and city level — offering grants, forgivable loans, and deferred payment assistance.

Types of Down Payment Assistance

• Grants: Money that never has to be repaid. Typically 1–5% of purchase price.
• Forgivable second mortgages: Loans that are forgiven if you stay in the home 3–10 years.
• Deferred payment loans: No payments required until you sell, refinance, or pay off the first mortgage.
• Matched savings programs: State matches your savings contributions 1:1 or 2:1 up to a limit.

Major DPA Programs to Know in 2026

• Chenoa Fund — National program offering 3.5% down assistance for FHA loans
• Freddie Mac BorrowSmart — Up to $2,500 for income-eligible borrowers
• Fannie Mae HomePath Ready Buyer — 3% closing cost assistance
• State Housing Finance Agency programs — Every state has one; most offer 2–5% DPA
• HUD-approved Good Neighbor Next Door — 50% discount for teachers, firefighters, EMTs, law enforcement

Income Limits and Eligibility

Most DPA programs have income limits (typically 80–120% of area median income) and require the property to be a primary residence. Many are specifically designed for first-time buyers (defined as not having owned in the past 3 years), but some serve repeat buyers in targeted areas.

How to Find Programs in Your Area

• Search downpaymentresource.com — the most comprehensive database
• Contact your state Housing Finance Agency directly
• Ask your lender — many specialize in DPA-compatible loans
• Check city and county websites — local programs often have the best terms
• HUD-approved housing counselors can identify programs you qualify for