The Quick Read: Yes, usually. Several lender-arranged assistance options carry no income limit, and none of them requires you to be a first-time buyer. The catch is that they still sit on top of a government-backed first mortgage, and they work only for a home you will live in. Each one also has its own credit and structure rules.
What Does “Outside Government Programs” Actually Mean?
It means outside the income-tested programs run by states, cities, and counties. It does not mean outside the rules of the loan underneath. Your first mortgage is still an FHA, USDA, or HUD-184 loan, and that loan decides what the assistance can look like.
Think of it as three layers:
1. Public, income-tested programs. These are state and local programs with income caps and often a first-time-buyer test.
2. Lender-arranged assistance. These are options placed through wholesale lenders alongside a government-backed first mortgage. This is the layer most high earners can use.
3. The first mortgage. FHA, USDA, or HUD-184. It sets the minimum investment, the property rules, and the underwriting.
Lendmire is a mortgage broker. It arranges these down payment assistance programs through wholesale lenders, and the lenders do the underwriting and approval. Everything here is subject to program guidelines and full underwriting.
Here is the part most high earners miss. Public programs gate on income because their funds are limited. Many lender-arranged options skip that gate on most structures, though each has other tests. You may be shut out of the city program and still be a fit for a different option.
Do You Earn Too Much? Myth Versus Reality
Not necessarily. “I earn too much” is a common reason buyers never ask. It is also only partly true.
An income cap is usually a percentage of the area median income, which is the midpoint household income for your county. In a high-cost county, the cap can sit well above what you would guess. A household that looks wealthy in a small town can land under the cap in an expensive metro.
Among the options Lendmire arranges, only the grant has an income test. The rest do not. Here is how each one handles income:
- Grant: household income at or below 140% of area median income, unless you fall into a qualifying category.
- Forgivable second: no income limit, except USDA’s own limit when the first mortgage is USDA.
- Repayable second: same as above.
- Refinance-cost second: same as above, and it applies only to refinances.
So a high earner has two practical routes. One is a category exemption on the grant. The other is a second lien with no income test.
The Four Shapes of Assistance (and Which Care About Income)
Across the wholesale programs Lendmire places files with, assistance comes in four shapes. Each is a percentage of price or value, not a fixed dollar promise. Each is subject to program guidelines.
| Option | What it is | Credit floor | Income test |
|---|---|---|---|
| Grant | 2% or 3.5% of price, nothing to repay | 620 | 140% of AMI or a category |
| Forgivable second | 3.5% of lesser of price or value | 640 | None (USDA’s own if USDA) |
| Repayable second | 3.5% or 5%, a real loan | 660 | None (USDA’s own if USDA) |
| Refinance-cost second | 1% to 3.5% of balance, FHA refi | 660 | None |
AMI means area median income. The credit floor is the lowest representative score among borrowers on the loan.
Two points before the details. First, the grant is the only one that pairs with FHA first mortgages alone. The forgivable and repayable seconds also pair with USDA and HUD-184. Second, the 3.5% in the seconds lines up with the FHA minimum investment on purpose. The assistance can cover that minimum on its own.
The Grant: Nothing to Repay, With a Category Door
The grant is released at closing. It has no lien, no payment, and no interest. It is 2% or 3.5% of the purchase price, applied toward your FHA minimum investment. It pairs with an FHA first mortgage of one to four units at 96.5% loan-to-value. There is no high-balance first lien. It is not offered in Washington.
A high earner clears the income test through a category instead. Any one of these works:
- A first responder: police, fire, public safety, paramedic, or EMT. Current, former, or entering service all count.
- An educator.
- Medical personnel, such as a nurse, doctor, phlebotomist, or hospital worker.
- A civil servant at the federal, state, or local level.
- Military personnel, including retired, volunteer, or unpaid service.
- A first-time buyer, meaning no ownership interest in a residence in the three prior years.
- A buyer purchasing in an underserved census tract.
Notice that first-time status is one category among several. It is not a requirement. A repeat buyer who teaches or nurses can qualify.
The grant also requires a homebuyer education course. You pay for it up front, and the cost is credited back at closing. The grant cannot be combined with any other assistance program.
The Second Liens: Where Most High Earners Land
If you are not in a category, the second liens are the likelier fit. Each is a loan secured behind your first mortgage. Be clear on that, because it changes the math.
Forgivable second. It is 3.5% of the lesser of price or appraised value. It carries no interest and no monthly payment. The balance is forgiven after 36 or 60 on-time first-mortgage payments, with no 90-day delinquency. The credit floor is 640. It pairs with FHA, HUD-184, or USDA first mortgages on one- to two-unit homes, and manual underwriting is allowed.
Repayable second. It is 3.5% or 5% of the lesser of price or value. At 5%, the extra 1.5% goes toward closing costs and prepaids. It carries interest and a monthly payment. It amortizes over 30 years, with a balloon due in year 10. The credit floor is 660, and high-balance first mortgages are allowed. Manual underwriting is not.
A balloon means the remaining balance comes due at once. Plan for it before you sign.
Neither second requires a first-time buyer. Neither needs homebuyer counseling. Co-borrowers can blend scores when the main earner makes at least 60% of household income and holds the higher score. The blended floors are 660 for the forgivable second and 670 for the repayable second. An automated underwriting approval is required.
What Does It Really Cost?
Nothing here is free, and the cost shows up in different places. The grant costs you a category or an income test. The forgivable second costs you time. You must stay in the home and keep paying the first mortgage. The repayable second costs you a monthly payment and a year-10 balloon.
Run three plain scenarios, using percentages only:
- A dual-income couple in a high-cost metro. They earn well above the area median and are not in a category. The grant is out. A forgivable or repayable second can still cover the FHA minimum investment.
- A nurse moving up from a condo. She is a repeat buyer, not a first-timer. Her profession is a category, so she can use the grant and owe nothing back.
- A buyer with thin savings and a strong paycheck. The repayable second at 5% can cover the minimum investment plus part of the closing costs. His monthly budget has to carry the second payment.
Pricing on the first mortgage and the second is set by the wholesale lender, so it is not quoted here. Compare the full Loan Estimate for each structure.
Now compare each option to simply paying more up front. Paying more keeps your loan balance lower and avoids a second lien. Using assistance keeps more cash in your account. Cash reserves matter if your emergency fund is thin. Which one wins depends on your savings, your job stability, and how long you plan to stay.
What Sits Underneath: The First Mortgage Rules
The assistance does not change the first mortgage. For FHA, the minimum investment is 3.5% of the lesser of price or appraised value, with a representative score of 580 or higher. The assistance options carry higher credit floors than that.
Other FHA facts you will feel:
- Upfront mortgage insurance: 1.75% of the base loan, and it can be financed into the loan.
- Annual mortgage insurance: it varies by loan size and loan-to-value. Above 90% loan-to-value, it lasts for the life of the loan. At or below 90%, it lasts 11 years.
- Loan limits: one-unit FHA limits for 2026 run from $541,287 to $1,249,125, depending on the county.
If you are a high earner in an expensive area, check your county’s limit early. The grant does not allow high-balance first mortgages. The repayable second does.
What Underwriters Check Beyond Income
Income is the smallest part of the file for most high earners. The lender looks at several other things.
Debt-to-income. This is your monthly debts compared to your gross income. FHA manual underwriting uses 31/43 ratios. Automated approvals commonly allow more, and the assistance options follow the automated finding. A repayable second adds a payment to your debts. A forgivable second generally does not, though that depends on program terms.
Credit. Your floor depends on the option, as the table shows. Check your score before you pick a structure.
Student loans and other debts. Student debt counts in debt-to-income even when you earn well. Lendmire’s article Does a High Earner With Student Debt Still Need Down Payment Assistance covers that tradeoff.
Household makeup. On a USDA first mortgage, household income counts, not just the borrowers’ income. A high-income household in a pricier county can run over USDA’s cap. USDA states that applicants must meet an income test and personally occupy the home. Adding assistance does not raise that cap.
The property. Second liens cover single-family detached or attached homes, condos, and PUDs. Unique property types are excluded. Minor non-structural repairs up to $5,000 can be held back in escrow at 150% of the estimate.
Other Money Sources: Gifts, Family, and Employers
You can also fund a down payment without a program. Here is how the common sources compare.
| Source | Counts as a lien? | Key condition |
|---|---|---|
| Family gift | No | Signed gift letter, no repayment |
| Gift of equity | No | Family members only |
| Forgivable second | Yes | Occupancy and on-time payments |
| FHLB set-aside grant | Not counted | Program-specific rules apply |
HUD says any financing that creates a lien against the property is secondary financing. It adds that a lien is not a gift, even when it carries no payment or is forgiven. HUD also notes that Federal Home Loan Bank set-aside grants are not counted as secondary financing. That is why the forgivable second is a loan until it is forgiven.
A family gift needs a signed and dated letter. It must name the donor, the relationship, and the amount, and it must state that no repayment is required. Employer help varies. Ask your lender to confirm that it is allowed before you count on it.
Nothing stacks. The Lendmire assistance options cannot be combined with another assistance program. A mortgage credit certificate is not allowed with the second liens.
Who Should Skip This Route?
Assistance is not for everyone. Skip it, or at least slow down, in these cases:
- You have plenty saved. If you can put down 20% without strain, a conventional loan may be a cleaner path.
- You plan to move within a few years. A forgivable second only forgives after 36 or 60 on-time payments.
- You cannot absorb a second payment. The repayable second adds one and ends in a balloon.
- You want an investment or second home. Assistance covers owner-occupied primary residences only.
Deciding between a cash cushion and a larger loan with no second lien is a real toss-up for many buyers. The extra cash feels good at closing, and the tradeoff lands later. Some high earners prefer a larger loan with no second lien. Others want the cash cushion. Both are reasonable. Weigh it before you decide.
What About USDA and HUD-184 First Mortgages?
The forgivable and repayable seconds also pair with these loans. The rules differ in ways that matter.
On USDA, the income cap applies no matter where your down payment help comes from. USDA publishes limits by county. Check yours before you plan around this loan.
On HUD-184, the Section 184 program is for members of federally recognized tribes. HUD says the borrower should check with their tribe or state housing finance agency for assistance. The program guarantees loans but does not provide the assistance itself. A lender-arranged second can fill that gap.
How to Apply: A Step-by-Step Path
Here is the usual order of operations:
1. Check your goal. Confirm the home will be your primary residence.
2. Pull your credit. Know your representative score and your co-borrower’s.
3. Match a shape to your file. Category buyers look at the grant first. Everyone else looks at the seconds.
4. Pick the first mortgage. FHA, USDA, or HUD-184, depending on the property and your situation.
5. Complete the application. The broker places the file with a wholesale lender.
6. Finish homebuyer education if you use the grant. The cost is credited back at closing.
7. Get the automated underwriting finding. The lender then reviews the full file.
Ask your broker these questions:
- Which shape fits my situation?
- Does the second add a monthly payment to my debts?
- When does the balloon come due, if there is one?
- What happens if I sell or refinance early?
A broker arranges the file and compares structures. The lender underwrites and approves it.
Key Terms Defined
Area median income (AMI): The midpoint household income for your county. Income caps are set as a percentage of it.
Second lien: A loan secured by your home that sits behind your first mortgage. If you default, the first mortgage gets paid first.
Forgivable: A balance that is wiped out if you meet set conditions, such as staying current for a set number of payments.
Balloon payment: A large lump sum due at the end of a loan term, after smaller payments that did not pay off the full balance.
Representative credit score: The score a lender uses to qualify the loan, usually the middle of three bureau scores.
Automated underwriting (AUS): Software that reviews your file and returns a finding the lender uses to decide whether to approve.
Frequently Asked Questions
Is there an income limit on down payment assistance?
It depends on the option. The grant has a 140% of area median income test unless you fall into a qualifying category. The forgivable and repayable second liens carry no income limit, except USDA’s own limit on a USDA first mortgage. Programs change, so confirm before you apply.
Do I have to be a first-time buyer?
No. Repeat and move-up buyers qualify for every option. First-time status is only one of the grant’s qualifying categories. The three-year definition applies there, and it covers a homemaker or single parent whose only past ownership was with a former spouse.
Can I use assistance on a rental or second home?
No. Assistance covers an owner-occupied primary residence only. A vacation home or a rental does not qualify.
Is down payment assistance really free?
No. The grant has nothing to repay, but it carries eligibility tests and a required homebuyer course. The forgivable second is a loan until it is forgiven. The repayable second is a real loan with a payment and a year-10 balloon. Urban Institute research found that nearly nine in ten public programs are second mortgages, so the pattern is common.
Does a second lien hurt my chances of approval?
It can change your debt-to-income. A repayable second adds a monthly payment, so it counts. Another option is Lendmire’s piece on whether a high earner with student debt should skip down payment assistance.
If you are buying a primary home and want to see whether a down payment assistance option fits your file, Lendmire can help you compare the grant, forgivable and repayable structures alongside an FHA, USDA or HUD-184 first mortgage.
About Lendmire
Lendmire — NMLS# 2371349 — is a mortgage broker that arranges FHA, USDA and HUD-184 home purchase financing with grant-style, forgivable and repayable down payment assistance options in 16 states through wholesale lenders. Every option is subject to the lender’s guidelines and full underwriting. Scotsman Guide named Lendmire a Top Mortgage Workplace in both 2025 and 2026.
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References
1. USDA Rural Development – Single Family Housing Guaranteed Loan Program
2. HUD FHA Connection – Secondary Financing Background
3. Urban Institute – Expanding Down Payment Assistance Awareness
This article is part of Lendmire’s down payment assistance program — full qualification details, guidelines, and scenarios live on the program page.
Related reading: Should a High Earner With Student Debt Skip Down Payment Assistance? · How Repeat Buyers Find Down Payment Assistance Programs · How Much Down Payment Assistance High Earners Can Get With Student Debt
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
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Required disclosures. Lendmire (NMLS# 2371349) operates as a licensed mortgage broker, not a direct lender or depository. The discussion in this article is general in nature and should not be relied upon as financial, legal, or tax advice — every investment scenario is unique and should be reviewed by a qualified professional. Any loan inquiry is subject to lender underwriting, and this article is not a commitment to lend or a guarantee of approval. Mortgage rates, loan terms, and program guidelines vary by borrower, property, and state, and may change without notice. Equal Housing Opportunity. Verify licensure at NMLS Consumer Access.