MW Home prices are so high that more than half of down-payment assistance programs are now open to buyers earning over $100K
By Aarthi Swaminathan
The number of down-payment assistance programs is on the rise as housing costs remain high
There's been an increase in the number of down-payment assistance programs across the country. Many now allow prospective buyers who earn over $100,000 to get funding.
Home prices and mortgage rates are not where most aspiring home buyers want them to be.
Yet there's still good news for people who have been shut out of the housing market: the number of down-payment assistance programs is on the rise, and a growing share are open to people of all income levels - even six-figure earners.
On Thursday, the average rate for the 30-year fixed-rate mortgage ticked up 1 basis point to 6.1%, according to a weekly report from Freddie Mac (FMCC). Elevated mortgage rates have been a sore spot for many home shoppers, who are also contending with ever-rising home prices.
But help is out there. Over the last year, the number of down-payment assistance programs that people can use to offset the cost of a down payment has been on the rise.
What's noteworthy for buyers now is that these programs have become more flexible about their income restrictions, and more now allow prospective buyers who earn over $100,000 to get funding, according to new data from Down Payment Resource, which tracks the availability of these programs.
More down-payment assistance programs are becoming flexible
Traditionally, down-payment assistance programs have mostly been available to people who make 80% of an area's median income or less. For instance, a family of four living in Columbus, Ohio, that makes 80% of the area's median income earns about $87,200; in Houston, it's about $80,900.
Today, earning at least six figures has become a prerequisite for most home buyers in the U.S. To buy a median-priced home at about $400,000, a prospective buyer would need to earn about $121,000 for the house to be considered affordable, meaning that the housing costs don't take up more than 30% of their gross income, according to the Federal Reserve Bank of Atlanta's Home Ownership Affordability Monitor.
The actual median household income in the U.S., on the other hand, is about $85,000.
First-time buyers offered a median down payment of 10% of a home's sale price in 2025, according to the National Association of Realtors - matching the highest level since 1989. On a $400,000 home, that's roughly $40,000. Repeat buyers offered a median down payment of about 23% of the home's sale price.
The average amount of funding that buyers got from down-payment assistance programs was $18,000 as of the latest count, Down Payment Resource said, and many programs also provide help with closing costs and reductions in mortgage-insurance costs.
In the fourth quarter of 2025, there were about 2,600 down-payment assistance programs nationwide, up 6% from a year ago, Down Payment Resource found. The company maintains a database of such programs in the U.S., and works with real-estate agents and mortgage lenders to match home buyers with available programs.
The rise in down-payment assistance programs, most of which are government-funded, is a reflection of how expensive buying a house has become.
"Affordability will remain the defining challenge for home buyers in 2026, and down-payment programs are one of the most practical tools lenders have to address it," Rob Chrane, founder and chief executive of Down Payment Resource, said in a statement.
More than half - 62% - of down-payment assistance programs now support buyers earning over $100,000. Additionally, 10% of these programs have no income limits at all, which is a 15% increase since last year, Down Payment Resource noted.
The majority of these down-payment assistance programs are available only to first-time buyers, but there has been a 3% increase in the number of programs open to repeat buyers.
The most common type of down-payment assistance, according to Down Payment Resource, is a second mortgage, or piggyback loan, which has grown in popularity as affordability has challenged home buyers.
Other down-payment assistance is aimed at helping certain groups of people become homeowners. For instance, a program in the Bay Area city of San Bruno, Calif., provides up to $140,000 in down-payment assistance, or 20% of the property's purchase price, to city employees who buy a home in San Bruno.
The program also has no limitations on income, and the second loan would be due upon the sale of the house or if the property is no longer the homeowner's primary residence. Recipients would also have to pay back the loan if they left their job with the city. The median home value in San Bruno is $1.25 million, according to Zillow (Z) data, down 0.4% from the previous year.
California has the highest number of down-payment assistance programs in the U.S., followed by Florida and Texas, according to Down Payment Resource.
Generally, down-payment funding for higher-income buyers "runs out the quickest," Pam Marron, a Palm Harbor, Fla.-based mortgage broker, told MarketWatch. In a given month, she helps about 10 to 12 buyers qualify for down-payment assistance.
But over the course of the last four months, in particular, "I have noticed a huge increase in the people that need down-payment assistance," Marron said. She's also seen an uptick in the number of mortgage-loan officers trying to get financial assistance for their buyers.
Down-payment assistance doesn't necessarily mean free money
To be clear, down-payment assistance is not necessarily free money. Though some programs offer grants or forgivable loans, many are structured as a second loan for the buyer.
In those cases, the buyer pays zero dollars up front, because they take out a loan for the down-payment amount in addition to a mortgage to cover the rest. Both of these loans will then be collected by the lender over time.
However, over half of down-payment assistance programs - about 1,035 of them - offer forgivable loans. Buyers don't need to pay these loans back as long as they meet certain conditions - for instance, the homeowner must live in the home they purchase for a set number of years.
If buyers meet that criteria, their second loan falls off partially or completely after a certain period, without any financial impact to them. Local mortgage brokers will be able to advise if potential buyers qualify for these programs.
Piggyback loans can evoke memories of the subprime mortgage crisis for some. But today's second loans are not the same variety, experts have told MarketWatch.
Though these programs can substantially bring down the cost of buying a house, that doesn't necessarily mean that they're fueling speculative home buying or encouraging people to take on risky loans that they can't pay back, Marron noted.
"Buyers who use these programs must meet certain requirements, just like other borrowers," Marron said. "They are meeting a minimum credit score to qualify. Their income has got to fly, just like any other borrower. We're just getting them money to help them get in."
Do you have questions about home buying that you would like to see covered in MarketWatch? We would like to hear from readers. You can write to us at readerstories@marketwatch.com. A reporter may be in touch to learn more. MarketWatch will not attribute your answers to you by name without your permission.
-Aarthi Swaminathan
This content was created by MarketWatch, which is operated by Dow Jones & Co. MarketWatch is published independently from Dow Jones Newswires and The Wall Street Journal.
(END) Dow Jones Newswires
February 02, 2026 11:41 ET (16:41 GMT)
Copyright (c) 2026 Dow Jones & Company, Inc.
Comments