A for sale sign is seen in front of a house in a Spring Branch neighborhood in Houston, Monday, Oct. 27, 2025. (Kirk Sides/Houston Chronicle via Getty Images)
Zillow Home Loans launched a down payment assistance program Wednesday to help homeowners who finance their home purchase with an FHA loan.
Big picture view:
The assistance program will be available to eligible buyers in 43 states and Washington, D.C. The states in which it is not eligible are Arizona, Delaware, Florida, Massachusetts, New York, Rhode Island and Virginia.
Eligible home buyers can receive up to 3.5% of the purchase price, which covers the full FHA minimum down payment, as a second loan with no interest and no monthly payment due.
The loan does not have an income cap or a first-time-buyer requirement.
After five years of on-time payments on the primary mortgage loan, the down payment assistance loan is automatically forgiven.
What they're saying:
Eric Wilson, Zillow's senior vice president and general manager of mortgages, says buyers tell the company that the down payment is what’s holding them back, something they also hear from agents.
"This program helps us serve more qualified buyers by giving them a simple way to clear that hurdle, with their mortgage and down payment assistance handled in one place," he said. "For buyers who can afford the monthly payment, we can now cover the full minimum down payment."
Zillow says that while many renters already manage housing costs that are near what a regular mortgage payment would amount to, pulling together the additional cash needed for a down payment can be a nearly-impossible task.
For those who are able to piece together the funds for a down payment, a recent Zillow study found that 70% will use savings, about 30% will rely on a gift from family or friends, more than 25% sell stocks or other investments and more than 20% tap retirement savings.
Some buyers use down payment assistance options from state and local housing agencies, nonprofits, employers or lenders. That assistance can include grants, forgivable loans, deferred-payment loans or low-interest second loans. Many of those options also limit eligibility to first-time buyers, set income limits or serve only certain areas.
The Fine Print:
The loans will cover up to 3.5% of the purchase price or appraised value, whichever is lower. Buyers can then add up to 6.5% of their own funds for a down payment of 10%.
If the buyer makes five years of on-time mortgage payments and lives in the home for five years, the loan is forgiven. However, repayment would be due in full if the buyer moves out, sells or refinances before year five.
The home loan will still require FHA mortgage insurance and the primary FHA mortgage loan has a standard interest rate and monthly payment.
Homebuyers can check their availability at Zillow’s FHA Down Payment Assistance website.
The Source: The information for this story was provided by Zillow. This story was reported from Orlando.