Current down payment assistance guidelines, updated from one source.
One source feeds every down payment assistance page Lendmire publishes; the Merced, CA figures below refresh when the program sheets are updated.
Of the purchase price
The largest option is a repayable second lien that covers your down payment and can reach closing costs and prepaids too; the smaller options cover the 3.5% FHA minimum down payment, in whole or, on the lowest tier, in part.
Covers the FHA down payment, in whole or in part
This covers the 3.5% FHA minimum down payment in whole or, on its lower tier, in part, and is forgiven at closing: no lien on the home, no monthly payment, no interest. It opens on the area income limit or on a qualifying category.
On the forgivable and repayable options
Most of the options carry no income limit, so a higher-earning household qualifies the same as anyone else; only the nothing-to-repay option looks at income, at 140% of the area median, or at a qualifying category.
Credit score to start
This is the lowest score that opens an option here — the nothing-to-repay option; the forgivable second liens start a little higher and the repayable options higher still, so a stronger score opens more choices.
| Option | Assistance | What you repay | Credit · mortgage · units |
|---|---|---|---|
| Grant-style assistance — nothing to repay | 2% or 3.5% of the price | Nothing — released at closing | 620+ · FHA 203(b), FHA repair escrow, FHA Limited 203(k), FHA Standard 203(k) · 1–4 units |
| Forgivable second lien — three-year | 3.5% of the price | Nothing after 36 on-time mortgage payments | 640+ · FHA 203(b), FHA Limited 203(k), HUD-184, USDA · 1–2 units |
| Forgivable second lien — five-year | 3.5% of the price | Nothing after 60 on-time mortgage payments | 640+ · FHA 203(b), FHA Limited 203(k), HUD-184, USDA · 1–2 units |
| Repayable second lien — thirty-year amortization, ten-year balloon | 3.5% or 5% of the price | Second lien, 30-year amortization, balloon in year 10 | 660+ · FHA 203(b), FHA Limited 203(k), HUD-184, USDA · 1–2 units |
| Closing-cost repayable second lien | 3.5% or 5% of the price | Second lien, 30-year amortization, balloon in year 10 | 660+ · FHA 203(b) · 1–2 units |
| Refinance-cost second lien (repayable) | 1% to 3.5% of the balance | Second lien, repaid | 660+ · FHA 203(b) · 1–4 units |
Current down payment assistance snapshot · updated September 7, 2026 · six options offered in California · no option requires a first-time buyer · no option combines with another assistance program · owner-occupied primary residences only.
Program figures are refreshed from one guideline source and change when it changes. The nothing-to-repay option is not offered in every state; the forgivable and repayable options are second liens; no option combines with another assistance program; all are for owner-occupied primary residences. The rate in the calculator is an editable market benchmark, not a quote, and the payment shown is an illustrative estimate; no fee or lender identity appears on this page. Lendmire is the broker, not the lender, and is not affiliated with FHA, USDA, HUD, or the federal government. Lendmire, LLC — NMLS #2371349. Equal Housing Opportunity.
What down payment assistance is — and how the options differ.
First-time home buyer programs are not one program; they are a family of down payment assistance options paired with a government-backed first lien, and the right one for a Merced, CA buyer depends on credit, the first lien, the property, and whether the help needs to reach closing costs.
For the program overview, see Lendmire’s down payment assistance program, or the statewide guide at Down Payment Assistance in California.
Assistance covers the FHA down payment
Every purchase option for a Merced buyer is sized on the price (or the lesser of price and value), not on a fixed sum: the smaller options cover the minimum investment, in whole or, on the lowest tier, in part, and the larger repayable option covers it and reaches closing costs and prepaid items too; the refinance option is sized on the balance.
Four shapes: grant, forgivable, repayable, refinance
The options differ in what they cost to carry: a nothing-to-repay option released at closing; forgivable second liens with no interest and no payment, released after an on-time payment period; a repayable second lien, amortized with a balloon, that reaches closing costs; and a refinance-cost option for an existing FHA loan.
Credit floors, mortgage programs, and unit counts
Two-borrower files can qualify on a blended score on the second-lien options when the higher earner has the higher score and an automated approval is in hand; every borrower still needs a score of their own, and the first lien and the unit count place the file as the options table shows.
Eligibility without a first-time-buyer rule
No option requires a first-time buyer. The nothing-to-repay option asks for one qualifying category — income at or below the area limit, a community-service occupation, a first purchase, or an underserved tract — and a homebuyer education course; the second-lien options ask for neither.
This is the whole test: the price sets the minimum investment, the option covers it, and the larger option leaves room for closing costs. The tool below applies it to your numbers and adds the FHA payment estimate.
Where Merced’s first-time and moderate-income buyers shop — and how the assistance fits.
Census estimates give the backdrop for a down payment assistance file: where Merced, CA’s renters live, what a median home costs, and what a median household earns.
Read the figures as backdrop. The renter share says how many households the program could serve; the median value says how far the minimum investment sits from a typical price; the two together describe where the program closes most files.
Data sources: U.S. Census Bureau — ACS 5-Year (2024) housing and population estimates, including tenure, home values, gross rents, and household income.
Distinct Merced submarkets, distinct property rules.
The metropolitan market around Merced splits into distinct pockets; a lender underwrites the home in front of it, but the pocket sets the expectations.
Condominiums close to work
Condominiums are often the entry point in Merced, and the assistance follows the first lien: the building needs FHA approval, or a single-unit approval, before the down payment help can attach to it. Median household income in Merced sits near $63,122 on the latest Census estimate.
Older neighborhoods and renovation loans
Renovation purchases in Merced qualify for the assistance on the price before repairs, which lets a buyer take on a home that needs work without also finding the minimum investment. The median owner-occupied home value in Merced runs near $372,600 on the latest Census estimate.
Manufactured homes on owned land
For Merced buyers looking at manufactured housing, the assistance is available on owned land, with single-width homes reaching only the option that accepts them. On a home at Merced’s median value, the FHA minimum investment comes to about $13,000 — the figure the assistance is built to cover.
New construction and infill
New construction in Merced works with the program; the appraisal and the builder’s timeline set the pace, and the assistance closes with the first lien like any other purchase. About 54% of Merced’s households rent — roughly 15,122 renter households, the pool the program exists for.
Small multi-unit homes, owner-occupied
A buyer who lives in one unit of a Merced duplex can use the program on the whole building; the nothing-to-repay option, which reaches four units, makes a house-hacking purchase reachable with the minimum investment covered. Merced itself counts a population near 92K.
Townhomes and attached homes
In Merced, a townhome in a planned development pairs cleanly with the program; the association’s rules and dues are read alongside the first lien, and the assistance covers the down payment. Median gross rent in Merced is about $1,393 a month — the payment many renters already carry.
Read the submarkets as orientation. The file’s figures come from the first lien, the option, and the program’s rules.
Four ways Merced buyers put down payment assistance to work.
How Merced buyers put the program to work depends on the first lien, the property, and what the help needs to cover; these four paths cover most files.
Pair the assistance with a USDA or HUD-184 mortgage
In USDA-eligible areas around Merced, the forgivable and repayable options pair with a no-down-payment first lien (the separate closing-cost option is FHA only); HUD-184 first liens pair the same way.
Buy a home that needs work with a renovation mortgage
A Merced buyer taking on a fixer pairs a limited renovation first lien or, on the nothing-to-repay option, a standard one with the assistance; the help is figured on the purchase price, and the loan covers price plus repairs.
Buy a first home with the down payment covered
A Merced buyer with the income for the payment but not the cash to close uses the assistance to cover the FHA minimum investment, a grant with nothing to repay, and keeps savings for the move.
Cover closing costs too on the larger option
When the minimum investment is covered but closing costs and prepaids remain the hurdle, the repayable option in Merced, CA reaches both; the balance above the minimum investment goes toward the closing.
Size the assistance on a Merced price before requesting a quote.
This tool applies the program to a Merced scenario: the price sets the minimum investment, the option and your cash set the down payment, and the FHA loan, mortgage insurance, and payment follow at the benchmark rate shown. Every field is editable; the rate is a market reference, not a quote.
Merced FHA payment with assistance
A Merced scenario to start from — adjust the price, the option, your own cash, the term, and the rate to see the assistance and the payment.
Editable benchmark: 7.28% as of October 1, 2026 · Freddie Mac 30-year average via FRED®. A conventional market reference, not an FHA loan quote.
Illustrative starting assumptions: a $375,000 price near Merced’s median owner-occupied home value, the strongest assistance option offered in California applied against the FHA minimum investment, a thirty-year term at the current Freddie Mac benchmark, property taxes and insurance estimated for California (U.S. Census Bureau). Every field is editable.
Illustrative estimate only — not a Loan Estimate, approval, quote, or commitment to lend. The rate field carries the weekly Freddie Mac thirty-year conventional benchmark, a market reference and not an FHA loan quote; your rate is set by the lender at lock. FHA mortgage insurance follows HUD’s published schedule for the term, leverage and loan size entered; taxes, insurance and dues are editable estimates; closing costs are not included; a repayable second lien adds its own payment, which is not shown here. Consumer mortgage lending licensed in sixteen states. Lendmire is not affiliated with or acting on behalf of FHA, USDA, HUD, or the federal government.
Same buyer, three very different closings.
The right structure for a Merced, CA buyer depends on savings, credit, the first lien, and whether the help needs to reach closing costs.
Assistance on an FHA loan, your own down payment, or assistance on a USDA or HUD-184 loan.
Covers the FHA minimum investment as a percentage of the price in four shapes — the lightest a nothing-to-repay option released at closing, the largest a repayable second lien that reaches closing costs and prepaids — with credit floors in the low six hundreds and no first-time-buyer rule.
Paying the minimum investment yourself keeps the closing simplest — no second lien, no category, no course; the trade is the months or years of saving that the assistance replaces. For the first lien itself, see Lendmire’s FHA loan program.
Where the property is USDA-eligible or the buyer qualifies for HUD-184, the forgivable options and the ten-year repayable option carry the Merced file; the separate closing-cost option is FHA only. For the USDA first lien, see the USDA loan program.
Assistance fits the buyer short of cash to close; the plain purchase fits the buyer with savings; the USDA and HUD-184 pairing fits eligible properties and borrowers — Lendmire places the Merced, CA file where it reads best.
What to prepare for a Merced scenario review.
What a down payment assistance review usually starts with.
This is a general preparation guide, not a universal checklist. The selected lender may request additional information based on the mortgage, the assistance option, the property, and the eligibility category. Nothing here is legal or tax advice.
Local details that can change the loan.
The assistance is the easy part; the rules around it are where Merced, CA files stall. These are the ones that most often change a file’s shape.
Use these checks to keep the Merced file clean and fundable.
The checks below keep a Merced assistance file on track, and each one comes from the option’s own terms rather than from a lender’s preference.
- Know the option: confirm the option is offered in the state.
- Confirm the category: settle which category applies before the application is signed.
- Take the course: schedule a HUD-approved course early.
The option decides what you owe afterward
The same minimum investment can be covered three ways on a purchase in Merced, CA, and the difference is entirely in what happens after closing: nothing, nothing if the first lien stays current, or a second loan that comes due; the options table shows what is offered.
The eligibility category for the nothing-to-repay option
The nothing-to-repay option opens on any one of four categories — household income at or below the area limit, a community-service occupation, a first purchase, or a property in an underserved census tract — plus a homebuyer education course; the second-lien options need none of these.
Homebuyer education on the nothing-to-repay option
The nothing-to-repay option requires a HUD-approved homebuyer education or pre-purchase counseling course, online or in person; the buyer pays for it up front and the cost is credited back at closing. The second-lien options do not require it.
Property type and unit count select the option
The property itself can move a Merced, CA file: a fourplex, a single-width manufactured home, or an unapproved condominium project each changes which option can attach, so the address is read before the option is promised.
No stacking with other assistance
No option may be combined with another down payment assistance program in Merced, CA, and the nothing-to-repay and forgivable options do not combine with a high-balance first lien; one assistance option, one first lien, one closing.
From a Merced pre-approval to keys with the assistance in place.
Four steps take a Merced, CA assistance file from a first read to funding; the first one is the one most buyers skip.
Pick the option
The first step is the option: which ones the credit opens, which the first lien allows, and which costs the least to carry for a Merced, CA buyer — settled before anything is ordered.
Get the mortgage approved
The first lien’s approval carries the file; the assistance is arranged alongside it, with the eligibility category and the education certificate in hand where they apply.
Clear the property
Property review runs in parallel with the first lien; the Merced home is checked against the option’s rules and the first lien’s, from the unit count to the association package.
Close both loans together
Final underwriting reads the whole Merced, CA file against the first lien’s rules and the option’s; the loan funds with the assistance in place and the second lien, where there is one, recorded behind it.
A brokerage that pairs the assistance to the loan.
An assistance file rewards preparation, and preparation is what a brokerage built for first-time and moderate-income buyers provides.
The option, matched to the buyer
A Merced scenario is placed on the right option first — the credit tier, the first lien, and the category — and the rest of the file is then built to fit it, before anything is ordered.
The mortgage, matched to the property
FHA, USDA, or HUD-184 is chosen with the Merced property — its address, its unit count, its type — so the assistance option that pairs with it is the one that attaches.
The right wholesale program
Assistance programs differ across wholesale lenders in what they offer and where; Lendmire places a Merced, CA file where its credit, its first lien, and its property read best, subject to lender program eligibility.
Trusted by first-time buyers & families alike.
Merced down payment assistance FAQs
The questions a Merced, CA buyer asks before requesting an assistance review, answered plainly.
Do I have to be a first-time homebuyer?
No — and that surprises most Merced buyers. The program has no first-time requirement; owning a home before does not close a single option, and being a first-time buyer is simply one of the doors into the nothing-to-repay option.
Is there an income limit?
Income limits apply to one option only — the nothing-to-repay grant — and only for buyers outside its categories. Everything else on this page is open at any income, which is why higher-earning Merced households use it.
What first-time home buyer programs are available in Merced?
Four shapes paired with a government mortgage: a nothing-to-repay option released at closing; forgivable second liens with no interest and no payment, released after an on-time payment period; a repayable second lien with a balloon that also reaches closing costs and prepaids; and a refinance-cost option for an existing FHA loan. The options table on this page shows what is offered in California.
Do I have to pay the assistance back?
It depends on the shape a Merced, CA buyer takes. Two carry nothing to repay: the nothing-to-repay option where it is offered, and the forgivable second liens, released after the on-time payment period. The repayable options are loans, paid back with interest and a balloon.
What credit score do I need?
A Merced buyer’s credit tier decides which options are open — the options table on this page shows the floor for every option offered in California.
What does Lendmire do on a Merced first-time home buyer file?
Reads the options offered in California against the credit, the first lien, the property, and the category; chooses the wholesale program that carries the fit; packages the first lien and the assistance together; and manages both liens through closing. Lendmire is the broker, never the lender, and is not affiliated with FHA, USDA, HUD, or the federal government.
Do I need a homebuyer education course?
Only the nothing-to-repay option requires it; the certificate is part of that file.
What if my mortgage is above the county loan limit?
Above the county limit, the repayable options carry the assistance; below it, every option is available. The price and the limit are settled before the option is chosen.
Can I use the assistance on a second home or a rental?
The assistance is for the home you live in; rentals and second homes are financed other ways.
Which mortgages can the assistance be used with?
Government first liens only: FHA for every option, USDA and HUD-184 for the forgivable and repayable second liens (the closing-cost repayable option, the one that also reaches prepaid items, is FHA only).
Ready to size the assistance on a Merced home? Start with the price.
No credit pull, no commitment: an initial review places your Merced purchase on the right option and tells you what to gather.
This guide covers Merced — for the statewide options, categories, and property rules, see Down Payment Assistance in California, part of Lendmire’s down payment assistance program.
Nearby markets in California: Turlock · Madera · Modesto · Fresno · Manteca · Clovis · Tracy · Gilroy
Related programs: FHA Loans · USDA Loans · FHA 203(k) Rehab Loans