Is down payment assistance free money I never have to pay back?
Written by the Warens Financial Group education team · Reviewed by Franklin Warens, Mortgage Broker, NMLS #1249423
It depends on the program and the option you choose. Some down payment assistance is a true grant you never repay. Much of it, including City of Houston HAP assistance and one option from TDHCA and TSAHC, is a forgivable second lien that is only forgiven if you stay in the home for a set number of years.
Move, sell, or refinance before the forgiveness period ends, and some or all of the assistance can come due. TDHCA and TSAHC also offer a repayable second lien option, with no monthly payment but a balance due at sale, refinance, or payoff of the first mortgage. Your loan officer reviews the exact structure of any assistance before you accept it.
This answer is part of our guide Down Payment Assistance Programs Houston Buyers Can Use.
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More questions
- What is the difference between TDHCA and TSAHC down payment assistance?
- How much is the City of Houston Homebuyer Assistance Program worth?
- Can I combine down payment assistance with an FHA loan in Houston?
- Are there income limits for Texas down payment assistance programs?
- Do I need a homebuyer education course to get down payment assistance in Texas?
- Do I have to be a first-time buyer to get down payment assistance in Houston?
Educational content only; not financial, legal, or tax advice, a commitment to lend, or an offer of credit. Program requirements vary by lender and change over time; eligibility depends on your full financial profile. Warens Financial Group, NMLS #2532048. Franklin Warens, Mortgage Broker, NMLS #1249423. Equal Housing Opportunity.
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