9 Down-Payment Programs That Could Make You a Homeowner in 2026
Owning a home as part of the “American dream” isn’t just ancient wisdom that worked for your boomer grandparents. People who buy their first homes before age 30 see a 22.5% higher net worth by age 50, according to Realtor.com’s Generational Wealth Report.
But getting started can feel out of reach, especially if you don’t have family who can help. Roughly 20% of first-time homebuyers get a gift or loan from family or friends to afford the down payment, according to National Association of Realtors research.
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If you don’t have generational wealth to help you on your path to homeownership, here are nine down payment programs that could make a difference.
1. FHA Loans
If you had to name one first-time homebuyer program, this is probably the one you’ve heard of. But how do FHA loans through the Federal Housing Administration work? An FHA loan requires just 3.5% down and can be used to purchase a single-family home or a house with up to four units – so you can buy your first home and investment property in one. FHA loans typically have lower income and looser credit requirements, making it even easier to qualify.
2. USDA Loans
The U.S. Department of Agriculture backs several no-money-down mortgages to help support revitalization in rural communities. Housing Direct loans help low- or very-low-income households and typically offer 33-year terms with payment assistance. The Housing Guaranteed loan program, on the other hand, works with a variety of lenders to provide no-money-down, 30-year fixed-rate mortgages to moderate-income buyers.
3. VA Loans
The Veterans Benefits Administration works with private lenders to guarantee mortgages for veterans, service members, and eligible spouses. A VA loan typically requires no down payment, limited closing costs, and no Private Mortgage Insurance (PMI), removing several barriers to homeownership.
4. National Homebuyers Fund Down Payment Assistance
The National Homebuyers Fund offers down payment or closing-cost assistance for up to 5% of the mortgage amount. Paired with an FHA loan requiring just 3.5% down, this grant can put homeownership within reach. Residents of California may be able to secure down payment assistance for up to 7% of the loan amount through NHF and the Golden State Finance Authority (GSFA).
5. HUD Good Neighbor Next Door
For pre-K through 12th-grade teachers, law enforcement officers, firefighters and emergency medical technicians can buy a home for 50% off the listing price in revitalization areas through the Good Neighbor Next Door program. Professionals must directly serve the area where the home is located and live in the home for three years.
6. Conventional 97
Fannie Mae, a government-sponsored entity focused on expanding access to homeownership, backs Conventional 97 loans that allow first-time homebuyers to put down just 3% as long as the loan-to-value ratio (LTV) stays at 97%. You must not have owned a home in the past three years, must live in the home as your primary residence, and have a credit score of at least 620. A homeownership education course is required, as well. You can apply through a traditional mortgage lender, including a bank or credit union.
7. Fannie Mae HomeReady
Fannie Mae’s HomeReady program waives the first-time homebuyer requirement and offers 97% LTV loans to qualified buyers who may have non-traditional income sources, such as rental properties. Down payment and closing costs may come from gifts, grants and other programs. As with Conventional 97, buyers may need to take a homeownership course.
8. Freddie Mac Home Possible
Like Fannie Mae, GSE Freddie Mac also has low down payment programs for low-income home buyers. Home Possible requires just 3% down with flexible funding from gifts, grants, secondary financing, employer-assistance programs or even sweat equity.
9. Bank-Sponsored Programs
Chase, Bank of America and other banks and credit unions offer first-time homebuyer grants of up to $10,000, along with 3% down mortgages. The grants may apply to FHA, VA, or other loans. Income restrictions and minimum credit requirements may apply. It pays to ask prospective lenders about programs available.
This article was provided by MoneyLion.com for informational purposes only and should not be construed as financial, legal or tax advice.
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