Zillow Launches New Down Payment Assistance Program
The program helps FHA borrowers cover up to 3.5% of a home purchase price with a loan that is forgiven after five years.
Updated on Oct. 28, 2026 in Residential
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Zillow Home Loans has introduced a new down payment assistance program for FHA borrowers across 43 states and Washington, D.C. The initiative provides a second loan of up to 3.5% of a home purchase price to help cover upfront ownership costs.
Why it matters
High entry costs remain a primary barrier for many prospective homeowners, and this program aims to bridge that gap by offering non-interest bearing assistance. By removing the immediate burden of a portion of the down payment, the plan may help buyers secure financing while maintaining their existing savings.
The program offers a second loan of up to 3.5% of the purchase price, which can be paired with an additional 6.5% of the borrower's own funds for a 10% total down payment. To qualify, applicants must maintain a minimum credit score of 640.
The players
Zillow Home Loans
A mortgage lender that provides financing options for residential real estate purchases.
The details
This assistance functions as a secondary loan that requires no monthly payments and accrues no interest. The balance is completely forgiven after five years, provided the borrower remains in the home and makes timely payments. However, if the homeowner sells, refinances, or moves out before the five-year term concludes, the full amount must be repaid.
Timeline
Zillow Home Loans announced the program on October 28, 2026.
The second loan is eligible for forgiveness after five years.
Money Landscape
This program arrives as many buyers continue to navigate high upfront capital requirements for homeownership. It functions as a private-sector supplement to traditional FHA loan protocols, which have long served as a standard entry point for households with limited liquid cash.
Prospective buyers should review their current liquid savings and credit score to see if they meet the 640-minimum threshold for this program. Consult a qualified mortgage professional to determine if this secondary loan structure aligns with your long-term housing plans and risk tolerance.
The takeaway
This assistance program offers a pathway to homeownership by covering 3.5% of costs without monthly payments for five years. If you are considering a home purchase, discuss the implications of secondary loans and repayment triggers with a trusted financial professional.
Further reading
For more information on navigating the current housing market, visit Residential.
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Would you use a down payment assistance loan to help you purchase a home?
