Down Payment Assistance, Gift Funds with USDA Loans

Mortgage and Lending with USDA / FHA Mortgage Source

There are a verity of state and county mortgage down payment assistance program ( DPA / Grants) available in Florida for qualified homebuyers. These programs are more commonly used in conjunction with a FHA or Conventional loans that require a down payments. Keep in mind, these programs are not available to all buyers. Most of the time buyers must be "first time buyers" and have not owned a home in the past three years.  Buyers must also meet income and qualifying standards and each program may have different requirements in place regarding classes, re payment time frame, etc.  Be sure to check with your local state, city or county agency on all the qualifying requirements and any grant repayment terms.


One of the common questions we receive is whether down payment assistance or grants can be used with the USDA program? Yes! buyers can use these programs in conjunction with their USDA loan. However, buyer should note the USDA program does not require any down payment for qualifed locations around Ocala and Gainesville. Instead buyers will use their DPA or Grant funds to pay down their loan amount lower, or pay their closing costs, etc.  Example:  Let's say your are a Alachua / Marion County homebuyer purchasing a home for $100,000 and you received $8,000 in grant money.  Instead of financing $100,000 + closing costs you will only need to finance $92,000 + closing costs - thus lowering your debt and monthly payments.  


As mentioned above USDA Rural Housing loans are 100% financing by default, so they eliminate the need for a traditional down payment. However buyers are still responsible for their closing costs, often times 3-6% of the loan amount.   Remember the USDA program also permits buyers to finance closing costs, assuming the home appraised value is higher than the sales price. Closing costs can also be paid by the home seller on behalf of the buyer - up to 6%.  USDA offers a lot of flexibility for buyers to purchase a home with little to $0 money out of pocket even if they do not have a grant or gift. So although approved grants and down payment assistance programs are permitted under the 100% USDA program, they really aren't needed as much as other mortgage programs that require 3.5%, 5% down, etc.


How About Gift Funds?


Like above, the buyer can receive gift funds to help pay for money down or closing costs if they like. In cases where gift funds are used, homebuyers want to remember a few important requirements.


  • Gift funds must come from an eligible source like a family member
  • Gift funds must be documented to have come directly from the donor
  • Gift Funds documentation should include - copy of check, copy of deposit slip from buyer account,  and possibly a copy of donors bank statement.


Florida home buyers that have questions about the USDA mortgage or want more information on getting approved  -   please visit us at  You can also contact us at 7 days a week at  ph: 904-302-6060


Please read other USDA loan frequently asked questions here.



Serving Florida and Georgia buyers including -  Alachua County, Archer, Gainesville, Hawthorne, High Springs, La Crosse, Micanopy, Newberry FL, Waldo FL, Marion County, Belleview, Dunnellon, Eureka, Fort McCoy, McIntosh, Ocala, Ocklawaha, Orange Springs, , Reddick, Romeo, Salt Springs, Summerfield

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