Saving for a down payment can feel like the one thing between you and a home in Raleigh. You are not alone if cash at closing is your biggest hurdle. The good news: there are real programs here in Raleigh and Wake County that can help you lower or even eliminate the upfront down payment. In this guide, you will learn what assistance is available, how to qualify, and the exact steps to apply. Let’s dive in.
What down payment assistance means
Down payment assistance is money that helps you cover part of the upfront cost to buy a home. It may be a grant you do not repay, a second mortgage that is deferred or forgivable, or a low-cost loan that you pay back later. In Raleigh and Wake County, help comes from several places:
- State programs through the North Carolina Housing Finance Agency (NCHFA)
- City or county initiatives that use local or federal funds
- Federal mortgages with low or no down payment
- Nonprofits and community organizations
- Banks, credit unions, and sometimes employers
Each option has trade-offs. Some reduce the cash you need but add a small second loan. Others lower your down payment but still require closing costs. The right path depends on your income, credit, location, and timeline.
Raleigh and Wake County options at a glance
North Carolina Housing Finance Agency (NCHFA)
NCHFA is the primary hub for statewide down payment help used by Raleigh buyers. Programs are delivered through participating lenders and often pair a first mortgage with a second mortgage for down payment or closing costs. Many options are deferred or forgivable after you live in the home for a set period. Some buyers can also pair an NCHFA mortgage with a Mortgage Credit Certificate (MCC) that can reduce federal income tax liability. Income and purchase price limits vary by county and are updated often. Learn more and find participating lenders at the North Carolina Housing Finance Agency.
City of Raleigh homebuyer resources
The City of Raleigh may offer income-limited assistance or referrals to housing partners when funding is available. Program details can change based on annual budgets and federal grants. Check the city’s site for current offerings and eligibility in the Housing and Neighborhoods section.
Wake County programs and referrals
Wake County’s Housing & Community Development team connects buyers to counseling, referrals, and potential assistance when available. Explore county resources and current programs through Wake County Housing & Community Development.
Nonprofits and community partners
Local nonprofits can open another path to ownership. For example, Triangle Habitat for Humanity offers affordable homeownership with education and an affordable mortgage model. This is not direct cash assistance for a market purchase, but it can significantly lower overall costs for qualifying buyers.
Lender and employer benefits
Some banks and credit unions offer grants or special programs for eligible customers. Large Triangle employers may provide homebuyer benefits or relocation help. These programs vary widely. Ask your HR team and your lender if you qualify for any lender or employer assistance.
Federal loans with low or no down payment
These are not DPA dollars, but they can lower your required down payment and are widely used in the Raleigh area.
FHA loans
FHA loans often allow as little as 3.5% down for qualified borrowers. Your down payment can come from gifts or approved assistance programs. Get an overview from HUD’s FHA program information.
VA loans
Eligible veterans, active-duty service members, and certain surviving spouses may qualify for VA loans with no down payment and flexible underwriting. Learn more from the VA home loan program.
USDA loans
USDA loans offer 0% down for eligible buyers in designated rural or peri-urban areas. Some locations on the outskirts of Wake County or nearby counties may qualify. Check eligibility and program details at the USDA Single-Family Housing Guaranteed Loan Program.
Conventional 3% down options
Conventional programs like Fannie Mae HomeReady allow as little as 3% down for eligible buyers and often come with lower mortgage insurance options. Many DPA sources can be combined with these loans if your lender and the program approve. Freddie Mac Home Possible is a similar option; your lender can compare which fits you best.
Combining DPA with your mortgage
Many state or local DPA programs can be paired with FHA or conventional loans. Your lender will model the combined setup and explain how a second mortgage could affect your debt-to-income ratio, PMI, and monthly payment.
Who each path fits
NCHFA assistance
You want targeted down payment help, plan to live in the home, and can meet Wake County income and purchase-price limits. You are open to a second mortgage that may be deferred or forgivable.
FHA
You have a modest down payment or gift funds and prefer flexible credit guidelines with a well-known path to approval.
VA
You are eligible for VA benefits and want to avoid a down payment while keeping monthly costs competitive.
USDA
You are open to eligible rural or peri-urban areas and want 0% down with income and location rules.
Conventional 3%
You prefer a conventional loan structure with potentially lower mortgage insurance and have stable income for a 3% down option.
Eligibility basics in Wake County
Common requirements
- You will live in the home as your primary residence.
- First-time buyer status is common, often defined as no ownership in the past three years. Some exceptions exist for veterans and targeted areas.
- Income and purchase price limits apply and vary by program and county.
- Homebuyer education is often required, provided by HUD-approved agencies.
- Property types may include single-family homes, townhomes, and condos. Condos can require extra project approval.
- You may need to use a participating lender for state or local programs.
For counseling and class options, use HUD’s housing counselor search.
Documents you will likely need
- Recent pay stubs, W-2s, and tax returns
- Bank statements and asset verification
- Government-issued ID and Social Security numbers
- A signed purchase contract and property details
- Homebuyer education certificate, if required
How to apply in Raleigh: a step-by-step checklist
- Review your credit, savings, and income. Decide what monthly payment feels comfortable.
- Contact a participating lender for NCHFA or a lender approved for FHA, VA, USDA, and conventional 3% options. Ask about experience with DPA.
- Complete homebuyer education if your program requires it. Save your certificate.
- Get prequalified or preapproved. Have the lender model scenarios with and without DPA, including PMI and any second-mortgage terms.
- Shop for homes that meet program limits and property rules. Confirm condo eligibility where relevant.
- Submit your mortgage application and DPA application together when possible. Some programs require early fund reservations.
- Close on the loan. DPA funds are typically delivered at closing or recorded as a second mortgage.
- After closing, follow occupancy and resale rules if your DPA has forgiveness terms or recapture provisions.
Pitfalls and trade-offs to watch
- Participating lender requirement: Not every lender offers every program. You may need to switch to access certain funds.
- Second-mortgage impact: Even at 0% or deferred, a second loan can affect refinancing or proceeds at resale.
- Forgiveness timelines: If you sell or move before the required period, you may owe part of the assistance back.
- Taxes and MCCs: A Mortgage Credit Certificate can lower federal taxes. Speak with a tax professional about your specific situation.
- Condo and project rules: Some condos are not eligible for certain loan types. Verify before you go under contract.
- Closing costs: DPA may not cover all fees. Plan for remaining closing costs or negotiate seller concessions.
Make your plan with local guidance
You do not have to figure this out alone. A local guide can help you compare options, confirm eligibility in Wake County, and connect you with experienced lenders who work with DPA every day. If you are ready to explore the best path for your budget and timing, reach out to Jody Whitehurst for a friendly, no-pressure conversation about your next move.
FAQs
What is down payment assistance in Raleigh?
- It is grant or loan funding that helps reduce your upfront cash to buy a primary residence, often delivered through NCHFA, local programs, or nonprofits.
How do I find NCHFA participating lenders in Wake County?
- Visit the North Carolina Housing Finance Agency website and use their homebuyer resources to locate participating lenders in your area.
Can I combine NCHFA assistance with an FHA loan?
- Often yes, but it depends on program rules and your lender’s approval. Ask your lender to model both the first mortgage and any second-mortgage terms.
Are there 0% down options near Raleigh?
- VA loans offer zero down for eligible borrowers, and USDA loans can offer zero down in eligible rural or peri-urban areas near Wake County.
Do I have to be a first-time buyer to get help?
- Many programs use the “no homeownership in the past three years” test, with possible exceptions for veterans or targeted areas. Check the program page for current rules.
What documents will I need for DPA in Wake County?
- Expect pay stubs, W-2s, tax returns, bank statements, ID, a purchase contract, and a homebuyer education certificate if required.
