The Quick Read: No. Income is one test among several, and only some options use it. Across the wholesale programs Lendmire places files with, the grant has an income test or a list of qualifying categories. The forgivable and repayable second liens carry no income limit of their own. Repeat buyers qualify too.
What Actually Decides Whether You Qualify?
Three layers decide it: the first mortgage, the assistance option, and your file. Income can show up in the first two. It is rarely the whole story.
The first mortgage is the loan that pays for most of the house. In this lane it is an FHA, USDA or HUD-184 loan. The assistance sits behind it or beside it.
The assistance option is the second layer. Lendmire is a mortgage broker, not a lender, and it arranges down payment assistance programs with those first mortgages through wholesale lenders. Everything here is subject to program guidelines and full underwriting.
Your file is the third layer: credit score, property type, occupancy, and paperwork. Assistance applies to an owner-occupied primary residence only. It does not apply to a second home, a vacation home, or a rental.
Here are the four shapes the assistance takes:
| Shape | Size | Income test | What happens to it |
|---|---|---|---|
| Grant | 2% or 3.5% of price | 140% of area median, or a category | Nothing to repay |
| Forgivable second | 3.5% of price or value | None of its own | Forgiven after 36 or 60 payments |
| Repayable second | 3.5% or 5% of price or value | None of its own | A loan with a monthly payment |
| Refinance-cost second | 1% to 3.5% of balance | None of its own | Same terms as repayable |
Each size is a percentage of the home’s price or value (or, for the refinance-cost option, of your loan balance). It is never a dollar promise. Your credit score, the property, and the first mortgage set what a file can actually receive.
How Does Each Shape Treat Income?
Only the grant uses an income test, and even that test has side doors. The seconds skip it.
The grant. You get 2% or 3.5% of the purchase price toward the FHA minimum investment. You owe nothing back. It is released at closing, with no lien, no payment and no interest. The credit floor is 620. You must complete an HUD-approved homebuyer education course. You pay for the course up front, and the cost is credited back at closing. It pairs with FHA first mortgages only, and it is not offered in Washington.
The forgivable second. This is 3.5% of the lesser of price or appraised value. It carries no interest and no monthly payment. It is forgiven in full after the first 36 or 60 on-time payments on your first mortgage. The credit floor is 640. It has no homebuyer counseling requirement.
The repayable second. This one is a real loan. It runs 3.5% or 5% of the lesser of price or value. At 5%, it also covers closing costs and prepaid items. It has interest, a monthly payment, a 30-year amortization, and a balloon due in year 10. The credit floor is 660. It comes with its own loan disclosure, separate from your first mortgage. Treat it like any other debt.
The refinance-cost second. If you already own and are refinancing into an FHA loan, this covers 1% to 3.5% of the balance toward closing costs. Combined leverage can reach 104%. It follows the repayable terms.
The forgivable and repayable seconds pair with FHA, USDA and HUD-184 first mortgages. If the first mortgage is USDA, that program’s own income limit still applies. The second adds none.
Does the Grant Really Require Low Income?
Not strictly. The grant has an “any one of these” test, and the income leg is generous.
The income leg is household income at or below 140% of the area median income. That figure reaches well past what most people call low-income. It is set by county, so the same paycheck can qualify in one place and miss in another.
You can also skip the income test by fitting one qualifying category:
- A first responder, such as police, fire, public safety, paramedic or EMT. Current, former and entering service all count.
- An educator.
- Medical personnel, from nurses and doctors to phlebotomists and hospital or Red Cross workers.
- A civil servant at the federal, state or local level.
- Military personnel, whether current, retired, volunteer or unpaid.
- A first-time homebuyer.
- A buyer purchasing in an underserved census tract.
Notice the shape of that list. A teacher earning well above the income line still qualifies. So does a nurse in a high-cost county. So does a buyer who has owned before but lives in a targeted tract.
Do You Have to Be a First-Time Buyer?
No. Nothing in the network requires it. Repeat buyers and move-up buyers qualify.
“First-time buyer” is one category on the grant’s list, and it is narrower than people assume. It means no ownership interest in a residential property in the three years before you apply. A homemaker or single parent whose only past ownership was with a former spouse can also count. Many buyers who sold a house years ago re-qualify without knowing it.
The assistance still has to fund a primary residence. It cannot stack with another assistance program, and a mortgage credit certificate is not permitted with the second-lien options.
What About the First Mortgage’s Income Rules?
FHA sets no borrower income cap, while USDA does. USDA’s guaranteed loan program serves low- and moderate-income households in eligible rural areas, with income no higher than 115% of the area’s median household income.
HUD-184 is the loan for Native American borrowers. HUD’s Section 184 handbook is explicit that the program itself does not provide down payment assistance or grants. The assistance in the forgivable and repayable seconds comes from a separate program layered under the HUD-184 first lien. A tribe or other source can also fill the gap.
FHA is the common base. It asks for a minimum down payment, which means the first mortgage covers nearly all of the price. The upfront mortgage insurance premium is a percentage of the loan and can be financed into it. Annual mortgage insurance is added on top, scaled by loan size and leverage. FHA’s one-unit loan limits vary by county.
Public programs run by state housing agencies work differently. Many buyers also miss a key point: qualifying for an agency’s first mortgage does not automatically qualify you for its assistance. So “down payment assistance” is a label on many different products. Some are needs-based. Some are not.
| Targeting model | Who it is built for | What to expect |
|---|---|---|
| Needs-based | Lower-income households | Strict income caps by county |
| Moderate-income | Middle-income buyers | Higher caps, often price limits too |
| Broad eligibility | Buyers regardless of income | Credit and property rules instead |
| Group-specific | Teachers, first responders, others | Occupation or location is the test |
You can tell which model you are looking at from the first page of the program rules. If the page leads with an income chart, it is needs-based or moderate-income. If it leads with a job list or a map, it is group-specific.
Why Does Everyone Link This to Low Income?
Because much of the public money is aimed there. Assistance often comes from public agencies with a housing mission, and those agencies set income and price caps to match. Caps also vary because funding sources and local costs vary.
That history stuck. But the network options above were built with a wider door. A buyer with a decent salary and thin savings is a common profile, and so is a buyer who earns well and simply does not want to drain their cash.
How Do Income Limits Get Measured?
When a program does use an income cap, the same few questions decide the outcome.
Limits usually scale with county and household size. A larger household typically gets a higher cap. Programs set their own rules on which income counts and whether it is gross or net, so read the provider’s written definition rather than guessing. Ask whether the cap counts everyone in the home or only the people on the loan.
Self-employed buyers add one more wrinkle: how income is documented. The assistance options follow the automated underwriting finding, so documentation can matter as much as the number itself.
Key Terms Defined
Area median income (AMI): the middle household income for a county or region. Programs use it to set income caps by percentage.
Second lien: a loan recorded behind your first mortgage. If you sell or refinance, the first mortgage gets paid before it does.
Forgivable: a second lien that shrinks to zero if you make the required on-time payments on your first mortgage.
Balloon: a large lump sum due at a set point. On the repayable second, it comes due in year 10.
Combined loan-to-value (CLTV): your first mortgage plus any second lien, divided by the home’s value. It shows your total leverage.
Primary residence: the home you live in as your main address. Assistance is limited to it.
What Do Three Buyer Pictures Look Like?
These are scenarios, not promises. Each stays in percentages and plain words.
The renter with solid pay and thin savings. Say a buyer earns above the area’s grant income line and has no qualifying job category. She is not a first-time buyer under the three-year rule because she sold a condo two years ago. The grant is likely out. The forgivable second could fit: no income test, a modest credit floor of 640, and it is forgiven after on-time payments. She weighs a 36-month or 60-month schedule against staying put.
The teacher moving up. A buyer who already owns qualifies for the grant through the educator category, whatever the paycheck. He owes nothing back, takes the homebuyer course, and the grant funds part of his 3.5% investment. His credit score has to reach 620 and the property must be his primary residence.
The buyer who needs closing-cost help too. If cash is tight on both the down payment and the closing costs, the repayable second at 5% can cover both. The tradeoff is real. It is a loan with a monthly payment that counts in qualifying, and it has a balloon in year 10. That fits someone who expects a refinance or sale within that window. It fits worse if the monthly budget is already stretched.
What If You Think You Earn Too Much?
Run this short check before you give up.
1. Identify the first mortgage. FHA has no borrower income cap, while USDA does. 2. Check the grant’s categories. A job or tract may cover you even if income does not. 3. Look at the second-lien options. They carry no income limit of their own. 4. Check the credit floors: 620 for the grant, 640 for the forgivable second, and 660 for the repayable second. Some second-lien files use a blended score when a co-borrower’s lower score is averaged in. AUS approval is required. 5. Confirm the property is a one-to-two unit primary residence for the seconds. The grant also allows up to four units.
If the answer is still no, public programs may serve different income bands, so ask a local housing agency. Some federal and regional programs reach moderate-income buyers too.
What Should You Ask a Loan Officer?
Bring these questions:
- Which of the four shapes can I use with my first mortgage?
- Does an income test apply, and does a category exempt me?
- What are the credit floors for the option I want?
- Is this a grant, a forgivable loan, or a repayable loan? What triggers repayment?
- Does the second have a monthly payment, and does it count in my qualifying?
- Do I need homebuyer education, and when do I pay for it?
- Is the property type eligible?
Ask for the terms in writing, including how forgiveness works. Programs change, so confirm the current terms before you commit.
Frequently Asked Questions
Do I have to be a first-time buyer to get down payment assistance?
No. None of the network’s options requires it. The three-year first-time definition is only one of the grant’s qualifying categories. Move-up and repeat buyers qualify, as long as the home is their primary residence and the file meets program guidelines.
Can I earn too much for down payment assistance?
Only for some options. The grant looks at income, set at 140% of area median, unless you fit a qualifying category. The forgivable and repayable seconds have no income limit of their own. USDA’s loan applies its own cap on a USDA first mortgage.
Is the assistance a gift I never pay back?
Not always. The grant is nothing to repay once it is released at closing. The forgivable second is forgiven only if you make the required on-time payments. The repayable second is a loan with interest, a monthly payment, and a balloon in year 10.
Does the assistance change my first mortgage?
Yes, in a few ways. The first mortgage stays in first position, and the second lien is recorded behind it. A repayable second adds a monthly payment that the lender counts when qualifying you. Subject to lender guidelines, combined leverage can be higher than the first mortgage alone suggests.
Can I use assistance on a rental or second home?
No. It funds an owner-occupied primary residence only.
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. Consumer lending is licensed in 16 states, and the grant is not offered in Washington. This is not a commitment to lend, and every file is underwritten individually.
Investors who want the broader program framework can review how DSCR loans work.
About Lendmire
Lendmire, NMLS# 2371349, is a mortgage brokerage with consumer lending licenses in 16 states. Down payment assistance options are arranged alongside FHA, USDA and HUD-184 first liens through wholesale lending partners, and each application is reviewed individually by the lender. 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 – Section 184 Policy Handbook, Chapter 2 Section B
This article is part of Lendmire’s down payment assistance program — full qualification details, guidelines, and scenarios live on the program page.
Related reading: Does Down Payment Assistance Have an Income Limit? · Down Payment Assistance vs Gift Funds From Family · Can You Get Down Payment Assistance While Still Owning a Home?
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
- Mortgage Loan Originator · NMLS# 1129696 · Verify on NMLS Consumer Access
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Important disclosures. Lendmire (NMLS# 2371349) is a licensed mortgage brokerage. Lendmire is not a direct lender, depository institution, or financial advisor. All loan inquiries are subject to lender underwriting; this article does not constitute a commitment to lend. Rates, terms, and program guidelines are subject to change without notice and vary by borrower profile, property type, and state. Information in this article is general in nature and is not financial, legal, or tax advice. Equal Housing Opportunity. NMLS Consumer Access: nmlsconsumeraccess.org.