Closing Cost Assistance (CCA) | Grants & Programs 2026

Closing cost assistance is money from a state or local housing agency, nonprofit, lender or seller that covers some of the fees due when you close on a home. It can come as a grant, a forgivable or deferred loan, or a credit at closing.

Closing costs typically run 2% to 5% of the purchase price, according to Freddie Mac. On a $350,000 home, that is about $7,000 to $17,500 in closing costs, separate from your down payment. The cash you still need at closing depends on assistance, credits and amounts already paid.

If you qualify, assistance lets you keep more of your savings for moving costs, repairs and reserves.

In this article (Skip to…)

• What is closing cost assistance?
• How does closing cost assistance work?
• Where to find closing cost assistance grants
• Types of closing cost assistance programs
• How to qualify for closing cost assistance
• Pros and cons of closing cost assistance
• How to apply for closing cost assistance
• Other ways to reduce closing costs
• Using down payment assistance for closing costs
• Low-down-payment mortgage options
• FAQs about closing cost assistance

What is closing cost assistance?

Closing cost assistance is financial help provided to home buyers to cover the expenses associated with closing a real estate transaction. These funds can come in the form of a closing cost assistance (CCA) grant, which does not need to be repaid, or a special assistance loan, which may have favorable terms such as no interest or deferred payments.

Buyers are typically responsible for paying various closing costs when purchasing a home, which can include fees such as appraisal, attorney, title insurance, loan origination, and other expenses related to the home purchase.

Closing cost assistance programs are intended to help buyers reduce their financial burden by providing funds or grants to offset some or all of these closing costs. The specifics and availability of such programs may differ depending on the location and program.

How does closing cost assistance work?

Generally, closing cost assistance is not a standalone program. It’s included as part of a down payment assistance (DPA) program. DPAs typically offer money that can be put toward your down payment or closing costs—whatever will help most with your home purchase.

Regardless, the funds can come to you in one of several ways. Each source offers different types of assistance, each with unique benefits and conditions that can affect your home buying process.

Closing cost assistance grants

Closing cost grants do not need to be repaid. Nonprofits and state and local programs offer them, often to first-time buyers or buyers with low to moderate incomes. Other programs offer forgivable loans: some or all of the balance is canceled after you meet the program’s requirements, but repayment may be required if you do not. For current options, see these grants for first-time home buyers.

Loan-based assistance options

Loan-based options are another common form of closing cost assistance, providing first-time home buyers with various ways to manage their upfront expenses.

Forgivable loans

A forgivable loan is a type of loan that does not have to be repaid if the homeowner remains in the house for a set period, effectively turning it into a grant. This option encourages homeowners to maintain their property as their primary residence for the duration of the term. It supports community stability and homeowner commitment.

No- or low-interest loans

Offered often as a second mortgage loan, this type of loan aids in covering closing costs and is repaid alongside the primary, or first mortgage. It’s designed with no or low interest to lighten the financial burden on the home buyer. State or local housing finance agencies usually provide these loans. They’re an attractive option for reducing the immediate out-of-pocket expenses involved in purchasing a home.

Deferred-payment loans

Some closing cost assistance programs offer deferred-payment loans, which do not require monthly payments. Instead, the loan is repaid when the home is sold, refinanced, or when the first mortgage is fully paid off.

This can provide immediate relief to homebuyers and allow them to focus on their mortgage payments without the added burden of additional loan repayments.

Matched savings programs

Matched savings programs add matching funds to money you save toward a home purchase. Terms vary by program, so confirm whether the match must be repaid and what costs it can cover before you enroll.

Lender credits

Participating lenders might provide lender credits to help with closing costs in exchange for a slightly higher interest rate on your home loan. This arrangement can minimize the amount needed at closing but results in a higher overall cost due to the increased interest over the life of the loan.

Seller contributions

You can negotiate for the seller to pay part of your closing costs, which lowers the cash you need at closing. Loan programs set different rules for seller-paid costs and concessions; see the limits by loan type under ‘Ask the seller to pay closing costs’ below.

Where to find closing cost assistance grants

Start with your state housing finance agency (HFA), which runs most statewide down payment and closing cost programs and can refer you to participating lenders. USA.gov points buyers to the National Council of State Housing Agencies’ HFA directory. A HUD-approved housing counselor can also point you to local programs, often at little or no cost.

To find out more about programs for which you might be eligible, you can also read through the following guides:

• Down payment assistance programs by state
• First time home buyer programs by state

Keep in mind that qualifying requirements for closing cost and down payment assistance grants vary by program. Income caps and maximum loan amounts are common.

But you don’t always have to be a first-time home buyer to get financial aid. Many programs are available to repeat buyers or former homeowners who haven’t owned property in the last three years.

Types of closing cost assistance programs

Closing cost help comes from four main places: federal loan rules, state and local agencies, nonprofits and private lenders, and the seller or lender at closing.

Many programs target buyers with low to moderate incomes, and some are open to repeat buyers. Check each program’s income, credit and property rules before you apply.

Each type of closing cost assistance has its own set of guidelines and requirements. The funds can typically be used for both down payments and closing costs, giving you more flexibility in how you allocate your savings.

Federal assistance programs

Federal support includes government-backed mortgages and funding for state and local homebuyer assistance. FHA, VA and USDA loans allow certain seller-paid closing costs, subject to program rules. Check your state or local housing agency for assistance, and be wary of unsolicited promises of ‘free money.’

State and local assistance programs

Most closing cost help comes from state housing finance agencies (HFAs) and city or county programs, usually as part of down payment assistance. It may be a grant, a forgivable loan or a deferred loan, and many programs require you to use the agency’s own first mortgage. These state programs show how terms differ:

Program terms as of October 2026. Funding and rules change often, so confirm current terms with the agency. Meeting a program’s minimum credit score does not guarantee approval; income, property and other underwriting requirements apply.

Nonprofit and private assistance programs

Private lenders and nonprofit organizations also provide closing cost assistance grants and programs. These can have a wide range of eligibility requirements and types of aid offered. Some might concentrate on helping particular communities, like veterans or single parents.

Seller concessions or lender credits

Lender-specific programs can also offer help with closing costs. These might include lender credits in exchange for a higher mortgage interest rate. Additionally, seller concessions can further reduce your burden by having the seller pay a portion of the buyer’s closing costs directly.

How to qualify for closing cost assistance

To qualify for closing cost assistance, you typically need to meet the program’s income limit, credit score minimum, and property and occupancy rules, and you may need to complete a homebuyer education course. Some programs require first-time buyer status; others do not.

Because there are so many closing cost grant programs available through state and local housing commissions, eligibility requirements can vary. But there are some general guidelines to remember.

Income limits

Most programs cap household income, often as a percentage of the area median income (AMI) for your county. For example, Fannie Mae’s HomeReady loan limits qualifying income to 80% of AMI, according to the Fannie Mae Selling Guide. Programs differ in whether they count household income or only qualifying borrower income. Limits vary by program, so check the published figure for your area.

Minimum credit score requirements

Many programs set a minimum credit score, and the figure varies by program and lender. For example, Florida Housing lists a 640 minimum for its homebuyer loan program, and the Ohio Housing Finance Agency requires 640 for conventional, USDA and VA loans and 650 for FHA loans. A higher score may also help you get better loan terms, but your loan-to-value ratio, loan program and lender also affect your terms.

Meeting the minimum credit score does not guarantee approval; income, property and other underwriting requirements apply.

Property requirements

Usually, the property must be a single-family home used as your primary residence. There may also be purchase price limits. This ensures the program benefits individuals and families seeking a home for personal occupancy, rather than investors. Some programs may also support the purchase of condominiums or townhomes under specific conditions.

Loan type

Some organizations offer specialized mortgage loan programs to be used alongside closing cost assistance and down payment grants. Compatibility varies, with some programs accommodating a wide range of loan types, from conventional loans to government-backed FHA, VA, and USDA loans. This flexibility allows applicants to choose the best loan product for their situation.

Homebuyer status

Some programs are open to repeat buyers; others are for first-time home buyers only. Fannie Mae generally considers you a first-time homebuyer if you are buying a home to live in and have had no ownership interest in residential property during the preceding three years. Exceptions apply to certain single parents and displaced homemakers. Many assistance programs use a similar three-year test, but check the program’s definition.

Homebuyer education

Many programs require a homebuyer education course before closing. CalHFA, for example, requires a certificate from an approved course, and Fannie Mae’s HomeReady requires homeownership education when all occupying borrowers are first-time buyers. Courses are offered online and in person, and some charge a fee.

U.S. residency

Citizenship and residency requirements vary by the assistance program and its accompanying mortgage. FHA removed its general non-permanent-resident eligibility category for case numbers assigned on or after May 25, 2025, while retaining eligibility for qualifying citizens of the Federated States of Micronesia, the Republic of the Marshall Islands and the Republic of Palau. Fannie Mae permits eligible lawful permanent and non-permanent residents. Check both the assistance program’s and lender’s requirements.

Documentation

To qualify for closing cost assistance, you’ll need to provide various documents. This typically includes:

• Tax returns
• W-2s, pay stubs, or other proof of income
• Bank statements
• Proof of U.S. residency

If you’re applying for a program that requires you to be a first-time home buyer, you may also need to provide proof that you haven’t owned a home in the past three years.

Pros and cons of closing cost assistance

The main benefit is less cash due at closing. The main drawbacks are program conditions, such as living in the home for a set period, repaying a deferred loan when you sell or refinance, or accepting a higher rate or price in exchange for lender or seller credits.

Benefits of closing cost assistance

One of the primary benefits of closing cost assistance is the financial relief it provides. By reducing the upfront costs of buying a home, these programs can make homeownership more accessible, especially for first-time or low-income buyers.

Additionally, they can enable buyers to maintain more savings for emergencies, home repairs, or to invest in home improvements.

Drawbacks of closing cost assistance

On the downside, many assistance programs come with conditions. For instance, some programs may require you to live in the home for a certain period of time or offer the assistance as a loan that gets repaid when the home is sold.

Also, some forms of assistance, like seller concessions or lender credits, might result in a higher purchase price or interest rate.

Before you apply, read the program’s repayment, occupancy and resale terms.

How to apply for closing cost assistance

You usually apply for closing cost assistance through a participating lender at the same time you apply for your mortgage, because many programs are paired with the agency’s own first mortgage.

Step-by-step application process

1. Research: Start by researching first-time home buyer closing cost assistance programs available in your area. This includes federal, state, local, and nonprofit programs. Determine if you meet the qualifying requirements, which often include income limits and the property being owner-occupied.
2. Gather your documents: Prepare all necessary documentation, such as proof of income, tax returns, bank statements, and other relevant information.
3. Submit an application: Apply for the assistance program either online or in person, depending on the program’s requirements. Fill out all required forms accurately, and attach your documents.
4. Follow up: After submitting your application, be sure to follow up. The approval process can take some time, but regular check-ins show your continued interest.

When to apply for closing cost assistance

The best time to apply for help with closing costs is as soon as you start thinking about buying a home. It’s best to start early because the process can take a while.

Assistance approval usually runs alongside your mortgage approval. If you’re approved, you’ll find out how much help you’ve been given and if there are any rules or requirements that come with it.

Here are some key points to remember:

• Start early: Begin researching and applying for assistance programs as soon as you decide to buy a home. Many programs have limited funds and operate on a first-come, first-served basis.
• Consider program deadlines: Some closing cost assistance programs have specific application periods or deadlines. Make sure you’re aware of these and apply accordingly.
• Coordinate with your mortgage application: If you’re wondering how to get money for closing costs, remember that many assistance programs need to be coordinated with your primary mortgage application. Apply for assistance around the same time you start the mortgage process.

Other ways to reduce closing costs

Closing cost assistance doesn’t have to come exclusively from a housing finance agency or local program. There are other ways to come up with the cash, too.

1. Ask the seller to pay closing costs

“It’s common for the home seller to pay for some or all of the buyer’s closing costs. This is most commonly seen by working the request into the buying offer,” says Reggie Graham, branch manager for Thrive Mortgage.

“At least request that the seller cover some of the closing costs, as it will allow the buyer to have more cash on hand for additional expenses that come with moving into a new home,” he recommends. “Work closely with your real estate agent, who can negotiate this into your purchase offer.”

Danielle O’Brien, broker and owner of Parkway Real Estate, explains how this approach works.

“Essentially, you’re borrowing more from the bank than you are actually paying the seller for the home. The seller is technically receiving this money. But they’re transferring it to the buyer to help with closing costs,” says O’Brien. “However, I usually don’t advise my clients to write this into an offer unless it’s necessary. That’s because it can be seen as a less clean offer that could turn off the seller.”

Rules for seller and other interested-party contributions vary by loan type and expense. For FHA and Fannie Mae loans, amounts above the applicable financing-contribution limit require an adjustment to the property value used to calculate the maximum loan. Learn how to negotiate seller concessions.

2. Use a cash gift from a loved one

Alternatively, you can ask for closing cost help from a relative, friend, or loved one.

Most major home buying programs, including FHA and conventional loans, allow you to use gifted funds for the down payment and closing costs.

VA loans and USDA loans do not require a down payment, but you could still use gift money for your closing costs.

The one thing you must do is make sure the gift funds are properly documented in order for them to be accepted by your mortgage lender.

3. Have the lender pay your closing costs

“Some lenders will also let you roll your closing costs into the loan by paying a higher interest rate,” notes Graham. This is known as a lender credit.

“But while you’ll pay less money upfront with this strategy, you’ll end up paying more in the long run through compounded interest,” he cautions.

Whatever approach you explore, weigh the pros and cons carefully.

4. Choose a less expensive home

Finding homes with lower sales prices can also make closing costs more manageable.

Many closing costs, such as the loan origination fee, are charged as a percentage of your loan amount. A smaller amount requires a smaller origination fee.

Other costs come as flat fees, though, so not all costs will be proportionate to your loan size. Smaller home sales prices have another advantage: more affordable monthly payments.

Using down payment assistance for closing costs

If you’re looking for closing cost assistance, you might like to know that there’s financial aid available for your down payment, too.

In fact, down payment assistance is the primary focus for many of the programs described above. Closing cost assistance tends to be an extra benefit tacked on to down payment assistance (DPA) programs.

“Depending on the program and down payment needed, you may be able to apply any remaining funds toward closing costs,” explains Chris McDermott, a real estate investor and former mortgage broker.

“Some down payment assistance programs allow you to use the funds they provide for closing costs, while others may not,” Graham says.

Low-down-payment mortgage options

Getting a loan that requires a low down payment could free up more money to spend on closing costs, whether you’re spending money you’ve saved or money you’ve accessed through a grant or loan.

FAQs about closing cost assistance