Zillow Introduces FHA Down Payment Aid for Eligible Homebuyers

Prospective homebuyers may have a new option to explore after Zillow introduced an FHA down payment assistance program for qualifying borrowers.

The real estate company said it will provide some buyers with assistance worth up to 3.5% of the purchase price, with the goal of helping them secure a mortgage. According to Zillow’s website, the program could move some people closer to homeownership sooner.

Still, the company notes that not every applicant will be eligible and says the offer may not be suitable for all buyers. It advises people to go over every available option with a qualified loan officer before deciding how to move forward.

For buyers who are struggling to save enough for the upfront cost of a home, the program could offer a useful path to purchasing a property.

Zillow’s Program Targets FHA Borrowers

The assistance is available only to borrowers who qualify for an FHA loan through Zillow Home Loans. The company says saving for a down payment keeps many buyers from purchasing sooner, and this program is meant to reduce that burden in some cases.

Zillow says the aid does not have to be repaid if borrowers meet the program requirements. One condition is that the homeowner must keep the same loan for five years before refinancing or selling. The company describes the help as a forgivable second mortgage with no interest and no monthly payments.

Who Can Apply

For the time being, Zillow says the program is offered only in select states and is not available in Delaware, Arizona, Florida, New York, Massachusetts, Virginia, or Vermont. It is open to both first-time buyers and people who have owned a home before, provided they meet the FHA and program requirements, including a minimum credit score of 640.

Fox 29 News reported on the announcement and shared details about it on Facebook. Some commenters responded with questions, including one person who asked whether the program was a good idea or a bad one.

“Lots of programs for first-time home buyers,” one commenter wrote. “Very much worth it to look into if you want to buy a house.”

As with any mortgage-related decision, whether this option makes sense will depend on a buyer’s finances, future plans, and how long they expect to stay in the home.