Down Payment Assistance: How Grant Money Can Help You Buy a Home

Buying a home in North Texas and worried about coming up with the down payment? Good news — there's a type of assistance that can hand you real money toward your down payment or closing costs, and you never have to pay it back (as long as you stay in the loan long enough). Let's break down exactly how it works, in plain English.

What Is This, Really?

Think of it as a bonus grant that rides along with your regular home loan (either FHA or a Conventional loan). It's not a second loan and not extra debt — it's a gift toward your purchase.

• It's stacked on top of your FHA or Conventional loan
• The money can be used for your down payment, closing costs, or both
• You don't get any leftover cash back in your pocket — it goes straight toward the purchase
• It only works for a home you're going to live in (your primary residence), not investment properties

Does It Change My Interest Rate?

No. This grant doesn't touch your interest rate. Your rate is still based on your loan program, credit, and market conditions — the grant is simply extra money layered on top to help you get into the home.

Where Is It Available?

Just about everywhere in the country — including here in the Dallas-Fort Worth area. The only places it's not offered are Washington state, Guam, Puerto Rico, and the U.S. Virgin Islands.

How Much Money Are We Talking About?

The grant is a percentage of whichever is lower — the sales price or the appraised value.

FHA loans:

Conventional loans:

The One Catch: Recapture

This is the part people ask about most, so let's make it simple:

• If you sell or refinance before making 6 monthly payments, the grant amount gets added back into your payoff amount
• Once you've made 6 payments, that requirement disappears completely — the grant is fully yours, no strings attached

Do You Qualify? Quick Checklist

FHA:

• 1–2 unit home, and it has to be your primary residence
• Loan amount at least $55,000
• Financing up to 96.5% of the home's value
• Credit score as low as 640
• Household income under 160% of the HUD median income for your area

Conventional:

• 1–4 unit home, primary residence
• Loan amount at least $50,000
• Financing up to 97% (or up to 105% combined with an eligible affordable second loan)
• Typically 640 credit score
• Household income under 160% of HUD median income (or 80% AMI for HomeReady/Home Possible programs)

Income Limit Waived?

Here's a detail a lot of buyers miss: that 160% income cap can be waived entirely if at least one buyer living in the home is:

• A first-time homebuyer, or
• An active or retired first responder, educator, medical professional, civil servant, or military member, or
• Purchasing in an underserved census tract

And no — you don't have to be a first-time buyer on every single file. That requirement only kicks in on Conventional loans above 95% LTV.

Bottom Line

If you've been holding off on buying because the down payment felt out of reach, this kind of grant could close that gap — without adding a second loan, without raising your rate, and without any cash-back tricks. The rules have some nuance (loan type, LTV, income caps), so the smartest move is running your specific numbers with a lender before you start shopping.