Zillow Home Loans will now help eligible buyers cover their FHA down payment

Eligible buyers can cover the full FHA minimum down payment with a second loan that is forgivable after five years if conditions are met.

Rhea-AI Summary

Zillow (Z, ZG) announced that Zillow Home Loans launched down payment assistance for eligible buyers financing home purchases with FHA loans.

The program offers up to 3.5% of the purchase price or appraised value, whichever is lower, through a second loan with 0% interest and no monthly payment. It is available in 43 states and Washington, D.C., without an income cap or first-time-buyer requirement. The second loan is forgiven after five years of on-time mortgage payments and owner occupancy, but is due in full if the buyer moves out, sells or refinances before year five. Buyers need a minimum 640 credit score and must qualify for the primary mortgage payment. FHA mortgage insurance applies.

Positive

• Minor pointZillow Home Loans launched assistance covering up to 3.5% of purchase price or appraised value, whichever is lower.
• Minor pointThe assistance loan carries 0% interest and no monthly payment.
• Minor point. Forward-looking: it has not happened yet and may not happen.Second-loan forgiveness follows five years of on-time mortgage payments and owner occupancy.
• Minor pointProgram access spans 43 states and Washington, D.C., without income caps or first-time-buyer requirements.

Negative

• Minor point. Forward-looking: it has not happened yet and may not happen.Assistance is due in full if the buyer moves out, sells or refinances before year five.
• Minor pointEligibility requires a minimum 640 credit score, a Zillow Home Loans FHA mortgage and a primary residence purchase.
• Minor pointPrimary FHA financing requires mortgage insurance, a standard interest rate and monthly payments under standard underwriting.

Key Figures

Down payment assistance: Up to 3.5% of the purchase price or appraised value, whichever is lower Second-loan interest and payments: 0% interest; no monthly payment Forgiveness period: Five years +4 more

Down payment assistance

Up to 3.5% of the purchase price or appraised value, whichever is lower

Second loan for eligible FHA buyers

Second-loan interest and payments

0% interest; no monthly payment

Program loan terms

Forgiveness period

Five years

Forgiven after on-time mortgage payments and owner occupancy

Early repayment condition

Due in full before year five

If the buyer moves out, sells, or refinances

Minimum credit score

640

Program eligibility requirement

Program coverage

43 states and Washington, D.C.

Availability

Buyer funds option

Up to 6.5% of own funds

Can be added toward a 10% down payment

Key Terms

fha loan, underwriting, owner occupancy, forgivable loans

4 terms

fha loan financial

"an FHA loan with Zillow Home Loans"

A FHA loan is a mortgage originated by an approved lender and insured by the U.S. Federal Housing Administration; the insurance protects the lender if the borrower defaults. It allows lower minimum down payments and more flexible credit standards than many conventional loans but requires the borrower to pay up‑front and ongoing mortgage insurance premiums and must meet FHA property, occupancy and loan‑amount limits.

underwriting financial

"qualifying for the full monthly mortgage payment under standard underwriting"

Underwriting is the process where a financial institution agrees to buy and then resell new stocks or bonds to investors. It matters because it helps companies raise money quickly and smoothly, while the bank takes on the risk of selling those securities at the agreed price. Think of it like a booker guaranteeing to sell all tickets for a concert before opening the doors.

View in glossary

owner occupancy financial

"on-time mortgage payments and owner occupancy"

The share or percentage of a property, building, or portfolio that is occupied and used by its owner rather than rented to unrelated tenants. In real estate and financial reporting, owner occupancy identifies space that generates no external rental income but may reduce operating vacancy and can affect comparisons of revenue, cash flow, and leverage because owner-occupied space is treated differently from leased space for income and valuation purposes.

forgivable loans financial

"grants, forgivable loans, deferred-payment loans or low-interest second loans"

Forgivable loans are loans that may be partially or fully cancelled if the borrower meets specified conditions, such as spending the money on certain activities or maintaining jobs for a set period. For investors, they matter because forgiven portions become non-repayable funding that can improve a company's cash position and reduce future liabilities, similar to receiving a conditional grant once the terms are satisfied.

AI-generated analysis. How Rhea-AI works. Not financial advice.

See more from StockTitan in Google Search and AI answers. Adds StockTitan as a preferred source · opens Google

Add on Google Not now

Qualified buyers can get up to 3.5% of the purchase price for their down payment, as a second loan with no additional interest or monthly payment

SEATTLE, Oct. 28, 2026 /PRNewswire/ -- Zillow Home Loans today launched down payment assistance for eligible buyers who finance their home purchase with an FHA loan. Buyers in 43 states and Washington, D.C., can receive up to 3.5% of the purchase price, which covers the full FHA minimum down payment, as a second loan with no interest and no monthly payment. The loan has no income cap or first-time-buyer requirement, and it's forgiven after five years of on-time payments on the primary mortgage loan.

Affording a home is a challenge for many right now, but frequently the biggest hurdle isn't the monthly mortgage payment, it's the cash needed up front. Many renters already manage housing costs that are close to the amount of a monthly mortgage payment but they haven't been able to save the lump sum needed to buy, or would prefer not to deplete their reserves. In a recent survey of more than 57,000 buyers and prospective buyers, Zillow^® found that people piece together a down payment from wherever they can:

• 70% use savings.
• About 30% rely on a gift or loan from family or friends.
• More than 25% sell stocks or other investments.
• More than 20% tap retirement accounts.

Some buyers use down payment assistance from state and local housing agencies, nonprofits, employers or lenders. That assistance can take the form of grants, forgivable loans, deferred-payment loans or low-interest second loans. Many programs are limited to first-time buyers, set income limits, or serve only certain areas, so the options available vary by buyer and location.

Helping clear the down payment hurdle

This new Zillow Home Loans program adds another option, one that doesn't require buyers to go through an extensive process with an additional entity.

How the program works

• Amount: Up to 3.5% of the purchase price or appraised value, whichever is lower; buyers have the option to add up to 6.5% of their own funds for a down payment of 10%.
• Structure: A second loan with 0% interest and no monthly payment.
• Forgiveness of second loan: Forgiven after five years of on-time mortgage payments and owner occupancy.
• Repayment: Due in full if the buyer moves out, sells or refinances before year five.
• Requirements: A minimum 640 credit score, an FHA loan with Zillow Home Loans, a primary residence purchase, and qualifying for the full monthly mortgage payment under standard underwriting.
• Also good to know: FHA mortgage insurance applies, and the primary FHA mortgage loan has a standard interest rate and monthly payment. There is no income cap or first-time buyer requirement. The program is available in 43 states and Washington, D.C., but not in Arizona, Delaware, Florida, Massachusetts, New York, Rhode Island, or Virginia.

Zillow listings continue to show state and local down payment assistance programs for which a buyer might qualify. Loan officers with Zillow Home Loans help buyers compare all of their low down payment options, including conventional loans with as little as 3% down and VA loans with 0% down for eligible veterans, so they can choose the best fit.

"Buyers tell us the down payment is what's holding them back, and we hear the same thing from agents about their clients," said Eric Wilson, Zillow's senior vice president and general manager of mortgages. "This program helps us serve more qualified buyers by giving them a simple way to clear that hurdle, with their mortgage and down payment assistance handled in one place. For buyers who can afford the monthly payment, we can now cover the full minimum down payment."

Buyers can learn more and check their eligibility at FHA Down Payment Assistance or by talking with a Zillow Home Loans loan officer.

About Zillow Group

Zillow Group, Inc. (Nasdaq: Z) (Nasdaq: ZG) is reimagining real estate to make home a reality for more and more people.

As the most visited real estate app and website in the United States, Zillow connects hundreds of millions of consumers with innovative technology, trusted agents and loan officers, and seamless digital solutions. With industry-leading tools and resources, Zillow supercharges real estate professionals so they can grow their businesses and deliver exceptional client experiences. For renters and housing providers, Zillow offers not only a robust marketplace but a set of end-to-end products and services to streamline applications, leases, payments and more.

Zillow's ecosystem spans the entire home journey — from dreaming and shopping to renting, buying, selling and financing.

Zillow Group's affiliates, subsidiaries and brands include Zillow^®, Zillow Premier Agent^®, Zillow Home Loans^®, Zillow Rentals^®, Zillow^® New Construction, Trulia^®, StreetEasy^®, Out East^®, HotPads^®, Follow Up Boss^®, ShowingTime^®, dotloop^® and Zillow^® Closing.

All marks herein are owned by MFTB Holdco, Inc., a Zillow affiliate. Zillow Home Loans, LLC is an Equal Housing Lender, NMLS #10287 (www.nmlsconsumeraccess.org). © 2026 MFTB Holdco, Inc., a Zillow affiliate.

(ZFIN)

 

View original content to download multimedia:https://www.prnewswire.com/news-releases/zillow-home-loans-will-now-help-eligible-buyers-cover-their-fha-down-payment-302921679.html

SOURCE Zillow Home Loans

FAQ

AI-generated questions and answers. How Rhea-AI works. Not financial advice.

How much FHA down payment assistance does Zillow Home Loans offer?

Eligible buyers can receive up to 3.5% of the purchase price or appraised value, whichever is lower, as a second loan with 0% interest and no monthly payment. Buyers may add up to 6.5% of their own funds for a down payment of 10%.

When is Zillow Home Loans' down payment assistance forgiven or repaid?

The second loan is forgiven after five years of on-time mortgage payments and owner occupancy. It becomes due in full if the buyer moves out, sells the home or refinances before year five.

Which states are excluded from Zillow Home Loans' FHA down payment assistance program?

The program is not available in Arizona, Delaware, Florida, Massachusetts, New York, Rhode Island or Virginia. It is available in 43 states and Washington, D.C.