Types of down payment assistance
Grants (free money)
Some programs provide outright grants that never need to be repaid. Typically offered by state housing finance agencies, cities, and counties. Amounts range from $2,000 to $20,000.
Forgivable second mortgages
The most common DPA structure. You receive a second mortgage for the down payment. Stay 5-10 years and it is forgiven entirely. Sell or refinance early and you repay a prorated amount.
Deferred-payment second mortgages
No monthly payments. Repaid when you sell, refinance, or pay off the first mortgage. Some at 0% interest.
Employer assistance
Many large employers offer homebuyer assistance. Check with HR. Common in healthcare, education, and government.
Zero down payment options
- VA loans -- zero down for eligible veterans and active-duty members
- USDA loans -- zero down for homes in eligible rural/suburban areas. 3-year wait after Ch. 7.
How to find programs in your area
- Search your state housing finance agency -- every state has one. Google "[your state] housing finance agency down payment assistance."
- Check HUD's directory at hud.gov for state and local programs
- Ask your lender -- FHA specialists know which DPA programs work locally
- Contact HUD-approved counseling agencies (free) to walk through available programs
Using gift funds
- Acceptable: family members, employers, labor unions, charitable organizations, government agencies
- Not acceptable: home seller, real estate agent, or any interested party
- Required: signed gift letter stating amount, relationship, and that no repayment is expected, plus bank statements showing the transfer
The down payment does not have to come entirely from savings. Between DPA grants, forgivable loans, gift funds, and zero-down programs (VA/USDA), most post-bankruptcy buyers have multiple pathways. Talk to a HUD-approved housing counselor (free) to identify every program you qualify for.