Zillow Home Loans announced the launch of a down payment assistance program on Wednesday. It offers eligible FHA buyers up to 3.5 percent of the purchase price as a second loan, enough to cover the full FHA minimum down payment, with no interest and no monthly payment.
The program is available in 43 states and Washington, D.C. It isn’t available in Arizona, Delaware, Florida, Massachusetts, New York, Rhode Island or Virginia.
The second loan is forgiven after five years of owner occupancy and on-time payments on the primary mortgage loan. It comes due in full if the buyer sells, moves out or refinances before then.
The 30-year fixed-rate mortgage averaged 7.32 percent as of Oct. 22, 2026, down from 7.40 percent the previous week, according to Freddie Mac. A year ago at this time, the 30-year FRM averaged 6.19 percent.
With rates that high, that refinance clause may matter more than the headline number. A buyer who wants to refinance in year three would have to pay off the assistance loan first.
Buyers need a minimum credit score of 640 and must qualify for the full monthly payment under standard underwriting. They also must get their FHA mortgage through Zillow Home Loans. FHA mortgage insurance still applies, and the primary loan carries a standard rate.
State and local down payment assistance programs often cap income, limit help to first-time buyers or restrict where buyers can purchase. Zillow’s version has none of those limits. Its pitch is that buyers won’t have to go through a separate agency to get the money.
Eric Wilson
Zillow listings will keep surfacing state and local down payment assistance programs buyers may be eligible for. On the lending side, Zillow Home Loans officers help buyers compare low-down-payment options, including 3 percent-down conventional loans and 0 percent-down VA loans for eligible veterans, the company said.
“Buyers tell us the down payment is what’s holding them back, and we hear the same thing from agents about their clients,” Eric Wilson, Zillow’s senior vice president and general manager of mortgages, said in a statement. “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.”
Zillow backed up the claim with its own survey data. Of more than 57,000 buyers and prospective buyers it surveyed, 70 percent used savings for a down payment. About 30 percent relied on gifts or loans from family or friends, and more than 20 percent tapped retirement accounts.
The launch also fits Zillow’s long-running effort to own more of the transaction. Zillow wants a buyer who finds a home on its site, tours it with a Zillow-connected agent and finances it through Zillow Home Loans. Tying the assistance to an in-house mortgage gives buyers a cash reason to choose Zillow’s lender.
For a company that has spent years trying to become a one-stop shop for buying a home, the down payment may be the most direct way yet to get buyers to finance with Zillow.
