The Quick Read: It depends on the assistance option, not on the mortgage itself. Across the programs Lendmire arranges, help runs from about 1% to 5% of the price or value, depending on the option. Some of it is nothing to repay. Some of it is a real second loan. Credit score, income, and the first mortgage you pair it with decide which option you get.
Notice what that answer leaves out: a dollar figure. Nobody can honestly promise you one before they know the home price and your file. The amount is a percentage, and the percentage changes with the option.
Who Actually Sets the Amount?
FHA, USDA, and HUD Section 184 do not hand you the money. They are mortgage insurance or guarantee programs. They set the rules for how outside help can be used, and the assistance itself comes from somewhere else.
HUD’s Section 184 handbook is blunt about it. The program does not directly lend, provide down payment assistance, or give grants to borrowers. USDA’s program lists no required down payment as a benefit. On USDA, help usually goes toward closing costs or a voluntary down payment.
So the real sources are state housing agencies, local governments, tribes, nonprofits, family, and the wholesale programs a broker places files with. The Urban Institute reports that more than 1,600 programs offer assistance nationwide. It also describes a database of 2,200. The counts differ, but the message holds: well over a thousand programs exist, and many buyers never learn they might qualify.
Lendmire’s down payment assistance programs pair a grant, a forgivable second, or a repayable second with an FHA, USDA, or HUD-184 first mortgage. These are arranged through wholesale lenders, subject to program guidelines and full underwriting. Lendmire is the broker, not the lender.
The Four Shapes of Assistance
Across the wholesale programs Lendmire places files with, assistance comes in four shapes. Each uses a percentage of price or value. The table puts them side by side.
| Shape | Amount | Repayment | Credit floor |
|---|---|---|---|
| Grant | 2% or 3.5% of price | Nothing to repay | 620 |
| Forgivable second | 3.5% of lesser of price or value | Forgiven after 36 or 60 on-time payments | 640 |
| Repayable second | 3.5% or 5% of lesser of price or value | Monthly payment, balloon in year 10 | 660 |
| Refinance-cost second | 1% to 3.5% of balance | Same terms as repayable second | 660 |
Credit floors are the lowest representative score among all borrowers on the file. Here is how each one works.
The grant: nothing to repay
The grant is 2% or 3.5% of the purchase price, aimed at the FHA minimum investment. It is released at closing. No lien, no payment, no interest.
It pairs with FHA first mortgages only, at 96.5% loan-to-value (the first loan is 96.5% of the lesser of price or appraised value). That covers the standard FHA purchase, certain FHA repair-escrow loans, and both 203(k) renovation loans, on one to four units. The grant is not offered in Washington.
A homebuyer education course is required. You pay for it up front, and the cost is credited back at closing.
The forgivable second: a loan that disappears
This is a second mortgage of 3.5% of the lesser of price or appraised value. It carries no interest and no monthly payment. The lender forgives it after your first 36 or 60 on-time first-mortgage payments, depending on the version. A 90-day-or-worse delinquency breaks that.
It pairs with FHA, HUD-184, and USDA first mortgages, on one or two units. Manual underwriting is allowed. No homebuyer counseling is required.
Read “forgivable” literally. It is still a lien until the clock runs out. Sell or refinance early and you owe it.
The repayable second: a real loan
This one is 3.5% or 5% of the lesser of price or value. At 5%, it covers the 3.5% minimum investment plus 1.5% toward closing costs and prepaid items.
It is a genuine second loan, and Lendmire describes it that way. It bears interest, carries a monthly payment, and amortizes over 30 years with a balloon due in year 10. It comes with its own disclosures, including a balloon disclosure. There are no lender fees on the second, only prepaid interest and recording, settlement, and registration charges.
It pairs with FHA, HUD-184, and USDA first mortgages on one or two units. High-balance first liens are allowed. Manual underwriting is not.
The refinance-cost second
If you already own and want to refinance into FHA, a fourth option exists. It is 1% to 3.5% of the lesser of your current balance or appraised value, toward closing costs. Combined leverage can reach 104%. It applies to an FHA refinance on a one-unit owner-occupied home (up to four units are allowed), but never a streamline refinance and never to refinance an existing assistance loan.
Which Shape Fits Your Situation?
Think about what your file looks like, then match the shape.
A renter with thin savings. Say you plan to buy with FHA’s 3.5% minimum investment and have almost nothing saved. The grant at 3.5% of price could cover that entire minimum, with nothing to repay. At 2%, you would still bring the other 1.5% of price. Not bad, but not zero.
A public-service worker. Teachers, nurses, firefighters, and military members can qualify for the grant under a category, even if their income is above the area limit. More on that below.
A repeat buyer moving up. You are not a first-time buyer, and that is fine. Repeat buyers qualify for these options. The grant works through a category or the income test, and the second liens have no income limit of their own.
A buyer who needs closing-cost help too. Here the repayable second at 5% is the tool. It is also the most expensive money on the table, because it is a loan. Run that decision honestly. A buyer with a decent credit score and a modest budget might pick the forgivable second instead, accepting 3.5% and covering closing costs another way.
A buyer whose credit sits near the floor. Credit floors rise with each shape: 620, 640, 660. A 640 score opens the grant and the forgivable second. It does not open the repayable one.
One more mechanical point. The forgivable and repayable seconds are sized on the lesser of price or appraised value. If the appraisal comes in under your contract price, the assistance shrinks with it. Plan for that gap.
What Sits Underneath: The FHA First Mortgage
Assistance is a layer on top. The first mortgage still has to work. For FHA, the minimum required investment is 3.5% of the adjusted value. HUD’s glossary defines gifts as contributions of cash or equity with no expectation of repayment. It lists a government agency running a homeownership program as an acceptable source.
Practical facts you should know:
- The first loan runs to 96.5% of value.
- FHA charges an upfront mortgage insurance premium, which you can finance into the loan.
- It also charges an annual premium, which varies by loan size and leverage.
- One-unit FHA loan limits vary by county, so confirm current limits and insurance costs with a qualified local professional.
Underwriters then judge the whole package. Combined loan-to-value counts the first mortgage plus every second. The payments on both must fit your budget. The rules on combined limits differ by assistance source, whether government, an approved nonprofit, or family. That is one reason Lendmire works from wholesale programs with clear terms rather than guessing.
FHA’s manual-underwriting ratios are 31/43, and automated approvals often allow more.
Can Assistance Cover Closing Costs?
Sometimes. It depends on the option.
The grant and the forgivable second aim at the minimum investment. The repayable second at 5% adds closing costs and prepaid items. A closing-cost variant on an FHA first mortgage covers the down payment, closing costs, prepaids, and costs paid outside closing, on the same terms.
On USDA, where no down payment is required, assistance mostly lands on closing costs or the guarantee fee. The second mortgage goes into the underwriting system as a new debt, and its payment counts.
What if you do not need all of it? Then you take less or take a different shape. Assistance is for your actual cost to buy. It does not become cash back.
Property matters too. The second-lien options cover single-family homes, condominiums, and planned unit developments. The grant also covers up to four units. Minor non-structural repairs up to $5,000 can be held in escrow on the second-lien options, with 150% of the estimate set aside.
Who Qualifies? (Not Only First-Timers)
Here is the myth to retire: you do not have to be a first-time buyer. No option in the network requires it. Many public programs target low- and moderate-income first-time buyers, but some serve families who have owned before.
Qualification varies by shape:
- Grant: household income at or below 140% of the area median income, unless you fit a category. Categories include first responders, educators, medical workers, civil servants, military personnel, first-time buyers, and buyers in underserved census tracts. Meet any one.
- Forgivable and repayable seconds: no income limit beyond USDA’s own on a USDA first mortgage.
- All options: the home must be your owner-occupied primary residence.
That last rule is firm. Assistance does not fund a rental, a vacation home, or a second home. If a second home is what you are really planning, see Lendmire’s explanation of how a cash-out refinance can fund a second home down payment.
You cannot stack assistance either. No option combines with another assistance program. The grant also excludes FHA High Balance, FHA $100 Down, and a few other specialty FHA programs. A mortgage credit certificate is not allowed with the second liens.
One more quirk for second-lien buyers: blended scores. A lower-scoring co-borrower’s score can be averaged in when the primary earner makes at least 60% of household income and holds the higher score. The minimums become 660 for the forgivable option and 670 for the repayable one. Automated approval is required.
What’s the Catch?
There are several, and you should know them before you sign.
The second lien is a loan. Even the forgivable one stays attached to your home until it is forgiven. The repayable one needs monthly payments and a balloon in year 10. Plan the exit before you close: sell, refinance, or pay it off.
Seller money does not count. FHA’s permitted sources do not include the seller of the property. Gifts from family are fine, but the donor signs a letter and the paper trail must be traceable. On USDA, gifts cannot come from anyone with an interest in the sale, such as the builder or agent.
Not every nonprofit qualifies as a source. HUD treats government entities, approved nonprofits, and family gifts differently, and the paperwork differs too.
Later refinances get complicated. USDA’s draft guidance says assistance loans must be subordinated or paid in full in a new guaranteed refinance. A silent second follows you.
Public programs run out. Many cap assistance, limit income, or add recapture periods. Programs change, and each file is underwritten individually.
Tax treatment can depend on your situation; buyers should speak with a qualified tax professional before relying on any deduction or credit.
One more wry note: “unused gift money counts as reserves” is a popular belief that USDA does not share. Gift funds are excluded from its reserves calculation.
How to Work Out Your Own Number
You can estimate your range without a lender. Follow the steps.
1. Pick the first mortgage. FHA, USDA, or HUD-184. This sets which assistance shapes can pair with it.
2. Check your credit tier. Your lowest representative score decides which shapes are open: 620, 640, or 660.
3. Test the grant. Is your income at or below 140% of the area median, or do you fit a category?
4. Apply the percentage to price. Grant: 2% or 3.5% of price. Seconds: 3.5% or 5% of the lesser of price or value.
5. Subtract from your cost to buy. Compare the result with the 3.5% minimum investment, plus any closing costs the shape covers. The gap is your out-of-pocket cash.
6. Decide on the strings. Grant: nothing to repay. Forgivable: a clock. Repayable: a payment and a balloon.
The calculation is simple. The judgment is the hard part.
The Urban Institute found that use of government assistance among FHA borrowers tripled in the years it studied. Family help is also common. That tells you demand is real, and so is the gap between what people could use and what they know about.
Key Terms Defined
Minimum required investment: The cash, or cash equivalent, an FHA buyer must put into the purchase, at least 3.5% of the adjusted value.
Second lien: A second mortgage that sits behind your main mortgage and gets repaid, forgiven, or paid off according to its own terms.
Area median income: The middle household income for your area. Many programs set limits as a share of it.
Combined loan-to-value: The first mortgage plus all second loans, divided by the home’s value.
Balloon payment: A lump sum due at the end of a loan term, instead of being fully paid off through regular payments.
Recapture: A program’s right to take back assistance if you sell, refinance, or move out early.
Get Independent Advice First
Before you commit, talk to an HUD-approved housing counselor. The CFPB’s housing counselor locator lists counselors approved by HUD who can offer independent advice, often at little or no cost. Counseling also helps if a program requires homebuyer education.
Next Step
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. Reach the team at 828-256-2183. Eligibility and terms depend on program guidelines, credit approval, and full underwriting, and nothing here is a commitment to lend.
Frequently Asked Questions
What is the most down payment assistance I can get?
Among the options Lendmire arranges, the repayable second tops out at 5% of the lesser of price or appraised value. That covers the 3.5% minimum investment plus 1.5% toward closing costs. The grant reaches 3.5% of price. Public programs elsewhere set their own caps, and every file is underwritten individually.
Do I have to repay it?
It depends on the shape. The grant needs no repayment, and it creates no lien. The forgivable second is forgiven after 36 or 60 on-time first-mortgage payments. The repayable second is a loan with a monthly payment and a balloon in year 10. Read the note before you sign.
Can I use it on a second purchase or a move-up home?
Yes, if the home is your owner-occupied primary residence. No option requires you to be a first-time buyer. Repeat buyers qualify under the grant’s income test or a category, and the second liens carry no income limit of their own. Assistance never applies to a second home or a rental.
Can I combine two assistance programs?
No. None of these options can be combined with another assistance program. A mortgage credit certificate is also not permitted with the second-lien options. Pick the one that fits your credit, income, and budget best.
Does assistance work with USDA or HUD-184 loans?
The forgivable and repayable seconds pair with USDA and HUD-184 first mortgages. The grant pairs with FHA first mortgages only. The USDA second must sit behind the guaranteed loan, and its payment counts in underwriting. HUD’s Section 184 program does not give assistance itself, so help comes from other sources.
About Lendmire
Lendmire (NMLS# 2371349) is a mortgage broker licensed for consumer lending in 16 states. Lendmire arranges FHA, USDA and HUD-184 purchase loans with down payment assistance options through wholesale lenders; every file is underwritten by the lender under the applicable program guidelines. Scotsman Guide named Lendmire a Top Mortgage Workplace in both 2025 and 2026.
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References
1. USDA
2. HUD Section 184 Policy Handbook, Ch. II.B
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: Repayable Second Mortgage Terms Across Down Payment Assistance Types · Does a Grant or Second Mortgage DPA Raise Your Monthly Payment? · How A Repayable Down Payment Assistance Second Affects Your DTI?
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
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Disclosures. The information presented in this article is general market commentary, not financial, legal, or tax advice. Lendmire is a mortgage brokerage (NMLS# 2371349) — not a direct lender or depository institution — and loan placement is subject to lender underwriting. Nothing in this content represents a commitment to lend. Loan terms, pricing, and program availability vary based on borrower qualifications, property characteristics, and state of subject property, and are subject to change at any time. Lendmire complies with Equal Housing Opportunity requirements. Consumer access: nmlsconsumeraccess.org.