Zillow Launches FHA Assistance Program to Help Homebuyers Cover Their Down Payments

Looking to buy a home? There may be a new advantage for certain qualifying homebuyers thanks to Zillow’s new FHA down payment assistance program. 

The real estate company announced the news recently, sharing that it would offer certain buyers up to 3.5 percent of the purchase price to help them qualify for a mortgage. The company’s website says that this could help some people on their path to homeownership sooner.

Of course, not everyone will qualify. Additionally, the company says the program may not be right for all homebuyers and suggests that people review all of the options with a qualified loan officer before deciding how to proceed.

However, this down payment assistance program sounds like it will be just what some folks need in order to purchase a home, especially those who are struggling to save up enough to qualify for a mortgage. 

Zillow’s New Program Helps FHA Borrowers

The new down payment program will only offer financial support to people who qualify for an FHA loan through Zillow Home Loans. “Saving up to buy a home delays over 50 percent of buyers,” the website says, noting that this assistance program could cut that upfront expense out of the equation in some situations.

Zillow says that homebuyers will not need to pay back the down payment assistance as long as they complete the program requirements, one of which states that the homeowner must keep the same loan for five years before refinancing or selling. “The down payment assistance through Zillow Home Loans is structured as a forgivable loan,” the website says. “It’s a second mortgage with no interest and no monthly payments.”

How to Qualify for Zillow’s New Program

For now, Zillow says the program is only rolled out to certain states, excluding Delaware, Arizona, Florida, New York, Massachusetts, Virginia, and Vermont. It’s available to both first-time homebuyers and those who have purchased a home before, as long as applicants meet the program and FHA qualifications, which include having a minimum credit score of 640.

Fox 29 News covered the announcement, sharing some of the details about it on Facebook. Several commenters asked questions about the program, including someone who wanted to know if this was a good idea or a bad idea. 

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

Of course, whether this is the right move for a buyer will depend on their own financial situation, as well as their long-term goals and how long they plan to stay in their home.