The Quick Read: The amount is a percentage of the home’s price or value, and student debt does not change that percentage. What student debt changes is your debt-to-income ratio, and that ratio decides whether you qualify at all. Three tests set your result: the assistance program’s income rule, the first mortgage’s treatment of your loans, and whether the layered structure fits the first-lien program. Across the wholesale programs Lendmire arranges, the assistance runs from 2% to 5% depending on the shape you choose.
What to Know First
- No dollar figure answers the question. Assistance is sized as a percentage of price or value. The options Lendmire arranges range from 2% to 5% on a purchase.
- Income caps are narrower than most high earners assume. Only the grant has an income test, and several categories of buyer skip it. The second-lien options have no income limit of their own.
- Student loans always count. Deferred, in forbearance or on a zero-payment plan, they still land in your ratio.
- You do not need to be a first-time buyer. Repeat and move-up buyers qualify for every option.
- It is for a primary home only. Assistance never applies to a rental or second home.
Lendmire’s down payment assistance programs layer one of four assistance shapes on top of an FHA, USDA or HUD-184 first mortgage. Lendmire is a mortgage broker and arranges these through wholesale lenders. Everything below is subject to program guidelines and full underwriting. This is not a commitment to lend.
How Much Can You Actually Get?
Expect between 2% and 5% of the price, and sometimes a share of the loan balance on a refinance. The size depends on which of four shapes you pick, and each one has different strings attached. Here is the full lineup.
| Shape | Size | Repayment | Credit floor |
|---|---|---|---|
| Grant | 2% or 3.5% of price | Nothing to repay | 620 |
| Forgivable second | 3.5% of price or value | Forgiven after 36 or 60 on-time payments | 640 |
| Repayable second | 3.5% or 5% of price or value | Monthly payments, balloon in year 10 | 660 |
| Refinance-cost second | 1% to 3.5% of balance | Same terms as repayable | 660 |
A few notes on reading that table. The forgivable and repayable seconds are sized on the lesser of the purchase price or the appraised value. That matters when an appraisal comes in low.
The grant works toward the FHA minimum investment, which is 3.5% of the lesser of price or value. At 3.5%, it covers that whole requirement. At 2%, you cover the remainder.
The repayable second at 5% is built as the 3.5% minimum investment plus 1.5% toward closing costs and prepaid items. That is often a strong option that reaches into closing costs on a purchase.
The refinance-cost second is a different animal. It helps with the closing costs of an FHA refinance, and combined leverage can run to 104%. It is never used on a streamline refinance or to refinance an existing assistance loan.
Credit floors apply to the lowest representative score among all borrowers on the file. On the second-lien options, a lower-scoring co-borrower’s score can be blended in under certain income conditions. The blended minimums run 660 for the forgivable and 670 for the repayable. An automated underwriting approval is required for that route.
One more point on size. Assistance cannot pay off student loans, credit cards or collections. It funds the purchase, not your existing debts.
Gate One: Will the Program Accept Your Income?
High earners are usually blocked by the assistance program’s income rule, not by the first mortgage. The grant is often a strong option, but it comes with an income test. It asks for household income at or below 140% of the area median income. A buyer above that line can still qualify through a category.
The categories are broad:
- First responders, current, former or entering service
- Educators
- Medical personnel, from nurses and doctors to hospital workers
- Civil servants at the federal, state or local level
- Military personnel, current, retired, volunteer or unpaid
- First-time buyers, meaning no ownership interest in a residence in the prior three years
- Buyers purchasing in an underserved census tract
That list is why “I earn too much” is the wrong stopping point. A well-paid nurse, teacher or veteran may clear the grant on category alone. So may a repeat buyer purchasing in a qualifying tract. A software engineer renting for years may qualify as a first-time buyer.
The forgivable and repayable seconds have no income limit of their own. The one exception is a USDA first lien, which carries USDA’s own household income limit. More on that in the edge cases.
Zooming out, public programs in general lean on caps. Research from the Urban Institute found that most programs in a national dataset have an income cap, and most also require first-time status. That pattern is why high earners hear “no” so often. The network Lendmire works with is built differently on both points.
Gate Two: How Student Loans Hit Your Ratio
Underwriters count every student loan, whatever its status, and they often count more than you actually pay. Federal rules for FHA require the lender to include student loans as a liability even when they are deferred or in forbearance. HUD Mortgagee Letter 2021-13 spells that out.
The payment used comes down to one of two figures. If your credit report shows a payment above zero, the lender uses that payment, or the actual documented payment from your servicer. If the reported payment is zero, the lender uses 0.5% of the outstanding balance, per HUD’s FHA guidance on student loan payments. USDA applies the same approach on its loans, as laid out in USDA’s Chapter 11 ratio rules.
Read that twice, because it catches high earners off guard. A graduate on an income-driven plan with a reported payment of zero still carries a counted payment. The larger the balance, the larger that counted payment. A six-figure balance can add a heavy monthly debt to your ratio without a dollar leaving your account.
If your actual documented payment is lower than the credit-report figure, expect to provide servicer letters. They should show the payment, the loan status, the balance and the terms.
Notice what this does and does not do. It does not shrink your assistance. A 3.5% second is still 3.5%. It shrinks how much house your ratio can support, and if the ratio fails, no assistance option rescues the file.
For FHA, manual underwriting ratios sit at 31/43. Automated underwriting approvals commonly allow more, and the assistance options follow the automated finding. USDA publishes its own ratio limits, and a waiver path exists for stronger files. Treat all of these as guideline ranges, not promises.
Gate Three: How the Layers Get Underwritten, Step by Step
The first mortgage and the assistance are underwritten together, in a set order. Here is how a typical file moves.
1. Pick the first lien. FHA is the base for all four shapes. The forgivable and repayable seconds also pair with USDA and HUD-184. The grant pairs with FHA only.
2. Pick the assistance shape. The grant suits buyers who want nothing to repay. A second lien suits buyers who cannot use the grant or need more.
3. Run the assistance program’s tests. These are the credit floor, the income test or category for the grant, occupancy, and homebuyer education where the grant requires it.
4. Count the student debt. The underwriter uses the reported payment, the documented payment, or 0.5% of the balance.
5. Add the housing payment. A repayable second adds a monthly payment to your ratio. A grant adds none. A forgivable second adds none, because it carries no interest and no monthly payment.
6. Check combined leverage. FHA looks at the first mortgage plus any second liens against value. A lien that carries no payment still counts in that math.
7. Assemble documents. Expect the credit report, servicer letters, pay records, the assistance note and deed of trust, and a counseling certificate where required.
Step five is where the shapes diverge for a high earner carrying student debt. The grant and the forgivable second keep your ratio lighter. The repayable second raises it. A buyer sitting near the ratio ceiling may find the repayable second pushes the file over, while the forgivable second fits.
One more difference matters at the margin. The forgivable second allows manual underwriting. The repayable second does not. A file that needs a human look at compensating factors has a narrower path with the repayable shape.
Which Shape Fits Which Buyer?
Start from your situation, then work backward. These are the patterns that come up most.
You qualify by category and want the lightest ratio. The grant is the cleanest fit. There is no lien, no payment and no interest. It also requires an HUD-approved homebuyer education course, which you pay for up front and which is credited back at closing. It pairs with FHA first liens up to 4 units, but not with high-balance FHA loans, and it is not offered in Washington.
You are over the grant’s limits and have no category. The forgivable second is the next stop. At 3.5%, it takes the 36-payment or 60-payment forgiveness schedule. It needs a 640 score, and it covers 1-2 unit homes.
You need help beyond the down payment. The repayable second at 5% reaches closing costs. It needs a 660 score and carries the heaviest ratio impact. It also allows high-balance first liens, which matters in expensive counties where FHA limits climb. FHA one-unit limits run from $541,287 to $1,249,125 depending on the county.
You are refinancing an FHA loan. The refinance-cost second covers closing costs. It needs a 660 score and an FHA 203(b) refinance.
Your credit sits near a floor. The grant has the lowest floor at 620. A score below the floor of any option means the assistance is off the table, so credit work comes first.
Honestly, for many high earners the decision is a toss-up between the grant and the forgivable second. The grant is lighter. The forgivable second is more widely available, because it has no income test and accepts manual underwriting.
Where the General Rule Breaks
The rule “assistance size is a percentage, student debt only hits the ratio” holds in nearly every file. These edge cases are where it bends.
The zero-payment income-driven plan. The real payment is zero, but FHA and USDA still count 0.5% of the balance. The documented-payment route helps only when the payment is above zero. Buyers on these plans are routinely surprised.
USDA and household income. USDA is the one first lien with an income cap. Per USDA’s Chapter 5 guidance, income from all adult household members counts toward the county limit, even those not on the loan. A strong earner can be a good credit risk and still be ineligible. Only applicants on the note count in the debt ratios.
HUD-184. This first lien has no income limit, but you must be an eligible tribal member buying in an eligible area. The lender still reviews your income against your debts under HUD’s guidance for that program. No assistance shape here changes that review.
Forgiveness is not a grant. A forgivable second is a lien until the forgiveness date. Selling or refinancing early can trigger repayment. Build that into your plans. If you expect to move within a few years, the 36-payment schedule beats the 60-payment one.
The repayable second is a real loan. It has interest, a monthly payment, a 30-year amortization and a balloon in year 10. It gets its own disclosure. Plan for how you will handle that balloon, whether by selling, refinancing or paying it off.
Stacking. No option combines with another assistance program. A mortgage credit certificate is not allowed with the second-lien options.
A rental or second home. Assistance is for owner-occupied primary residences only, so the answer there is no.
Four Myths That Cost High Earners Options
“I make too much, so I am out.” Only the grant has an income test, and categories bypass it. The second-lien options carry no income limit.
“Deferred loans do not count.” They do. See the federal rules above.
“I must be a first-time buyer.” No option requires it. The three-year first-time definition is one of seven ways to meet the grant’s test.
“The assistance can pay off my debts.” It cannot. It funds the purchase only. Paying down debt before you apply is a separate decision, and it is a real tradeoff against keeping cash for closing.
What Your File Needs
A clean file saves rework. Gather these before you talk to a lender.
- Your most recent credit report and a list of every student loan
- Servicer letters showing payment, status, balance and terms, if your documented payment is below the reported one
- Pay records for the household income the program counts
- A homebuyer education certificate if you pursue the grant
- Photo ID and standard purchase documents
Your 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. Lendmire arranges consumer mortgages in 16 states through wholesale lenders, and you can reach the team at 828-256-2183.
Key Terms Defined
Debt-to-income ratio (DTI): Your monthly debts divided by your monthly gross income. Lenders use it to judge whether you can carry the payment.
Area median income (AMI): The middle household income for a county or metro area. Programs set limits as a percentage of it.
Combined loan-to-value (CLTV): The first mortgage plus any second liens, divided by the home’s value.
Forgivable second: A second lien with no interest and no payment that is erased if you make enough on-time first-mortgage payments.
Repayable second: A second loan with interest, a monthly payment and a balloon due in year 10.
Grant: Assistance with nothing to repay, released at closing without a lien.
Frequently Asked Questions
Can I get assistance if I earn well above the area median?
Yes, in most cases. The grant’s 140% test can be skipped through a qualifying category, and the forgivable and repayable seconds have no income limit of their own. USDA first liens are the exception, because they carry a county income cap that counts every adult in the household.
Do income-driven repayment plans lower the payment my lender uses?
Only when the reported or documented payment is above zero. A plan showing a zero payment still counts as 0.5% of your balance on FHA and USDA files. Servicer letters can document a lower real payment when the credit report overstates it.
Does a repayable second hurt my chances more than a forgivable one?
Yes, it can, because the repayable second adds a monthly payment to your ratio, while the forgivable second adds none. The repayable shape also does not allow manual underwriting. Buyers close to the ratio ceiling often fit the forgivable option better.
Can I use assistance to pay off my student loans before closing?
No. Assistance funds the down payment and, on the repayable 5% option, closing costs and prepaid items. It cannot retire installment loans, cards or collections.
Can I use any of these on a second home or rental?
No. Every option is limited to an owner-occupied primary residence.
Investors who want the broader program framework can review how DSCR loans work.
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
3. HUD Mortgagee Letter 2021-13
This article is part of Lendmire’s down payment assistance program — full qualification details, guidelines, and scenarios live on the program page.
Related reading: Can a High Earner Get Down Payment Assistance From a Private Source? · Can You Get Down Payment Assistance With No Occupancy Requirement? · Can a High Earner Get Down Payment Assistance in Any State?
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.