The Quick Read: Repeat buyers find assistance by searching on the program’s rules, not the “first-time buyer” label. Nobody has to be a first-time buyer for the options Lendmire arranges. They pair with an FHA, USDA or HUD-184 first mortgage on a primary home. Which one fits depends on your credit, income, and how long you plan to stay.
Key Takeaways
- Owning before does not shut you out. Repeat and move-up buyers qualify for all four assistance shapes covered here.
- Assistance is a percentage of price or value. Some shapes carry nothing to repay, and others are real loans.
- The home must be your owner-occupied primary residence. Never a rental, vacation home or second home.
- Nothing stacks with another assistance program.
- Funding opens and pauses, so the search is about finding what is open for your first mortgage type.
Why Repeat Buyers Assume They Are Shut Out
The phrase “first-time buyer” is attached to most assistance marketing. Many repeat buyers read it literally and stop looking. That is the most expensive mistake in this search.
The label is set program by program. The federal consumer-finance regulator notes that many state, local and nonprofit programs focus on low- and moderate-income first-time buyers, but some are available to families who have previously owned a home. It also says many programs can be paired with a regular FHA loan.
Even where a program does use the label, the definition is looser than most people think. HUD’s long-standing definition counts you as a first-time buyer if you had no ownership in a principal residence during the three years before the purchase. A buyer who sold a home several years ago may already qualify on that basis alone. Each program sets its own version, though, and some require every borrower to meet it.
What Down Payment Assistance Actually Is
It is money that covers part of your down payment, closing costs, or both, layered on top of a government-backed first mortgage. The first mortgage is the “first lien.” The assistance either sits beside it as a second lien or arrives as a grant with no lien at all.
The public sources of this money are state housing finance agencies, local governments, tribes and nonprofits. These programs generally take the form of forgivable grants, zero-interest deferred “soft second” loans, or fully amortizing second loans. Grant programs can run out of funds faster than loan programs, because loan programs are replenished by repayments.
One thing to clear up early: FHA, USDA and HUD-184 do not hand you the money. They insure or guarantee the first mortgage. The assistance comes from a separate source layered on top.
Across the wholesale programs Lendmire places files with, there are four shapes. Lendmire is a mortgage broker, so it arranges these through wholesale lenders and does not lend itself. Lendmire’s down payment assistance programs page lays out the full menu. The sections below walk through how each one works.
The Four Shapes, Side by Side
| Shape | Size (% of price) | Repay? | Credit floor |
|---|---|---|---|
| Grant | 2% or 3.5% | Nothing to repay | 620 |
| Forgivable second | 3.5% | Forgiven after 36 or 60 payments | 640 |
| Repayable second | 3.5% or 5% | Yes, balloon in year 10 | 660 |
| Refinance-cost second | 1% to 3.5% of balance | Yes, same as repayable | 660 |
All figures are subject to program guidelines and full underwriting. Assistance percentages apply to price or value, never to a fixed dollar promise.
The grant
The grant is 2% or 3.5% of the purchase price, applied toward the FHA minimum investment. It is released at closing. No lien, no payment, no interest. It pairs with FHA first liens only, including the standard 203(b) and the 203(k) renovation products, at 96.5% loan-to-value on one to four units.
This is the shape with an income test, and it is the one repeat buyers misread. Your household income must be at or below 140% of area median income, unless you fall into a qualifying category. The categories include first responders, educators, medical workers, civil servants, military personnel, first-time buyers, and buyers purchasing in an underserved census tract. Any one of these opens the door without the income test.
An HUD-approved homebuyer education course is required. You pay for it up front and the cost is credited back at closing. The grant is not offered in Washington.
The forgivable second
This one is a loan that disappears if you behave. It is 3.5% of the lesser of price or appraised value, with no interest and no monthly payment. It is forgiven in full after 36 or 60 on-time first-lien payments, depending on the version. You cannot have a delinquency of 90 days or more.
It pairs with FHA, USDA and HUD-184 first liens on one to two units. There is no income limit beyond USDA’s own on a USDA first mortgage, and manual underwriting is allowed.
Consumer explainers warn that people sometimes call this a “grant.” It is not. It is only free if you stay long enough, and a sale or refinance before forgiveness can trigger repayment of the unforgiven part.
The repayable second
This is a real second loan, and Lendmire describes it that way. It is 3.5% or 5% of the lesser of price or appraised value. At 5%, it also covers closing costs and prepaid items: the 3.5% minimum investment plus 1.5% toward closing costs.
It bears interest, carries a monthly payment, amortizes over 30 years, and has a balloon due in year 10. It comes with its own loan disclosure and a balloon disclosure. That monthly payment counts in your debt-to-income picture. It pairs with FHA, USDA and HUD-184 first liens on one to two units, and high-balance first liens are allowed. Manual underwriting is not.
The refinance-cost second
This one is for people who already own. It covers 1% to 3.5% of the first-lien balance toward closing costs on an FHA 203(b) refinance, with combined leverage up to 104%. It is never used for a streamline refinance or to refinance an existing assistance loan. Same repayment terms as the repayable second. It applies to one-unit owner-occupied homes. Final terms depend on lender guidelines, property type, leverage, and the borrower’s complete credit picture.
How the First Lien and the Assistance Are Underwritten
An underwriter reviews the first mortgage and the assistance together. The steps look like this.
Step 1: The first lien sets the base. FHA requires a minimum investment on the lesser of price or value, which means first-lien leverage sits very high. FHA also charges an upfront mortgage insurance premium on the base loan, which can be financed. Annual mortgage insurance varies by loan size and leverage tier. FHA one-unit loan limits for 2026 vary by county.
Step 2: The assistance fills the gap. Your 3.5% investment is the number the assistance targets. The grant and the seconds cover that piece, and the 5% repayable version reaches into closing costs.
Step 3: Credit is tested at the higher floor. The FHA base floor is lower than the assistance floors. A 580 score may work for FHA alone, but the assistance options carry their own credit floors, shown in the table. For the second-lien options, a lower-scoring co-borrower’s score can be blended in when the primary wage earner earns at least 60% of household income and holds the higher score. The blended minimums are 660 for forgivable and 670 for repayable, and an automated underwriting approval is required.
Step 4: The repayment test. Combined payments on both liens, plus housing expenses, must fit your reasonable ability to repay. Underwriting guidance has long reflected this principle and has also called for disclosure of the source, amount and repayment terms of the assistance. A silent second with no payment adds nothing to monthly obligations. A repayable second does.
Step 5: Disclosure and paper. The assistance source, amount and terms go in the file. Expect the program application, the second-lien note and mortgage, and a homebuyer education certificate where required.
The USDA and HUD-184 Variations
USDA guaranteed loans allow assistance as long as the guaranteed loan stays in first-lien position. Because assistance funds are not your own money, they are excluded from the conventional credit test. USDA’s Chapter 16 handbook allows junior liens when they will not interfere with repayment and have been considered in underwriting. It also lets you pay the upfront guarantee fee from personal funds, seller concessions or eligible gift assistance.
USDA’s FAQ adds an exception worth knowing: combined loan-to-value generally cannot exceed market value plus the guarantee fee, except where a soft second for down payment or closing costs causes the overage. That is why a USDA buyer with assistance can end up with combined financing above the home’s value without breaking the rules.
HUD-184 is the loan guarantee for eligible Native American borrowers. Section 184 does not itself lend or provide down payment assistance. Tribes and state agencies supply the help. The forgivable and repayable seconds can pair with an HUD-184 first lien, subject to program guidelines.
Where the Rules Bend or Break
Occupancy. It has to be your primary home. Not a second home, not a vacation property, not a rental. If you plan to keep your old place as a rental, that is fine, but the new purchase must be where you live. Assistance on the rental is never available.
No stacking. You cannot combine one assistance option with another. A mortgage credit certificate is not allowed with the second-lien options. The grant also cannot go with FHA High Balance, the $100 Down product, 203(h), Good Neighbor Next Door, or One-Time Close.
A later USDA refinance. USDA’s Chapter 6 says assistance loans cannot be rolled into a new guaranteed refinance. They must be subordinated to the new loan or paid off. Plan for that if a refinance is likely.
Property type. The grant covers one to four units, an FHA-approved condo, or a PUD. The seconds cover single-family detached or attached homes, condos and PUDs. Unique property types are excluded.
Repairs. On the second-lien options, minor non-structural repairs up to $5,000 can be handled by holdback. The lender escrows 150% of the estimate, and the deadline for completing the work depends on the program and lender.
Funding and lender lists. Programs open, pause and run out. Some require a participating lender. That is a big reason to ask a broker which options are live right now.
Credit reporting. Assistance loans can appear on your credit report, so expect that with the seconds.
A Search Process That Works for Repeat Buyers
Start from your situation, not from a list of programs.
1. Pin down your ownership date. Count three years back from your intended purchase date. That tells you whether the first-time definition already covers you.
2. Check your category. If you serve in the public sector, in education, medicine, or the military, the grant income test may not apply to you.
3. Choose your first mortgage family. FHA, USDA or HUD-184. The assistance has to match it.
4. Decide how you feel about a loan. If a balloon in year 10 worries you, lean toward the grant or forgivable shape. If you want closing cost help as well, the 5% repayable version covers that.
5. Look at the local layer too. State housing finance agencies, city programs and tribes run their own help. Some describe themselves as serving “first-time and move-up” buyers. Many cap how much they give, or add recapture periods. Because nothing stacks, you pick one path.
6. Talk to a counselor. HUD-approved housing counseling agencies offer pre-purchase counseling and education workshops, and HUD’s counseling page lists how to reach one.
7. Ask a broker what is open now. Lists go stale. A broker who places these files weekly knows which structures are active.
Your Current Home, Sale Timing, and Cash
Repeat buyers have a wrinkle first-timers do not: an existing home. Two questions come up constantly.
First, can you use assistance before selling? The short version is that the new home must be your primary residence, and the timing of the old sale affects how the file is underwritten.
Second, does a past ownership history count against you? It generally does not.
Sale proceeds can reduce how much help you need. Some repeat buyers use proceeds for part of the investment and assistance for the rest. Each file is underwritten individually, so the combination depends on the program and your numbers.
What Repeat Buyers Should Weigh
Picture three buyers.
A move-up buyer sold more than three years ago and earns well above the area median. The grant’s income test would block her, but if she works as a nurse, the medical-worker category opens it. She would compare the grant against a forgivable second.
A buyer who plans to move again in two or three years should think hard about the forgivable second. Leaving before 36 or 60 payments means repaying the unforgiven part.
A buyer with limited closing cash, who intends to stay a decade, may find the 5% repayable second works. It covers closing costs, but he must accept the monthly payment and the year-10 balloon.
There is no universal winner. The right pick depends on how long you stay, your credit, and your monthly budget.
Key Terms Defined
First lien: The main mortgage, which gets paid first if the home is sold or foreclosed.
Second lien: A loan recorded behind the first mortgage, often used for assistance.
Forgivable loan: A second lien with no payment that is wiped out after you make enough on-time first-mortgage payments.
Balloon: A lump-sum payment due at the end of a loan term, here in year 10.
Area median income: The midpoint household income for your area, used for program income tests.
Blended score: A credit score averaged across co-borrowers under the second-lien options.
Frequently Asked Questions
Do I have to be a first-time buyer to get assistance?
No. None of the four options described here requires it. The grant has a first-time category, but it is only one of several ways to qualify. Other programs vary, and some are open to prior owners.
Can I use assistance if I still own my current home?
It depends on the file. The new home must be your owner-occupied primary residence. Keeping the old home as a rental is a separate matter, and the assistance applies only to the home you will live in. A lender reviews the timing and both properties.
Can I stack assistance with another program?
No. Nothing combines with another assistance program, and a mortgage credit certificate is not permitted with the second-lien options. You choose one structure.
Is the assistance a gift?
Only the grant has nothing to repay. The forgivable second is a loan that is forgiven after 36 or 60 on-time payments. The repayable second is a real loan with a monthly payment and a balloon in year 10.
How do I know a program is still open?
Ask a broker or lender who places these files now. Funding opens, pauses and runs out, and published lists go stale. An HUD-approved counselor can also point you to local options.
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. Programs are arranged through wholesale lenders, subject to program guidelines and full underwriting, and nothing here is a commitment to lend.
About Lendmire
Lendmire (NMLS# 2371349) is a mortgage brokerage serving home buyers in 16 states. Down payment assistance programs are arranged with FHA, USDA and HUD-184 first liens through wholesale lending channels; Lendmire brokers the financing and the lender underwrites each application. Scotsman Guide named Lendmire a Top Mortgage Workplace in both 2025 and 2026.
Investors who want the broader program framework can review how DSCR loans work.
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References
1. USDA
2. HUD
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 You Get Down Payment Assistance With No Occupancy Requirement? · Repeat-Buyer Down Payment Assistance vs First-Time-Only Grant Programs · How to Find Down Payment Assistance as a High Earner With Student Debt
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
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Legal disclosures. Lendmire (NMLS# 2371349) is a state-licensed mortgage brokerage that arranges financing through wholesale lender relationships. Lendmire is not a direct lender, depository institution, or registered financial advisor. The discussion above is general informational content about real estate financing — it is not financial, legal, or tax advice, and readers should consult licensed professionals for guidance on their individual circumstances. Loan inquiries are subject to lender underwriting; this article does not represent a commitment to lend. Loan terms, rates, and qualification standards vary by borrower, property, and state, and are subject to change at any time. Equal Housing Opportunity. NMLS Consumer Access: nmlsconsumeraccess.org.