A model of a house on a pile of hundred dollar bills.

‘Lifeline’ grants aim to increase homeownership 

Freddie Mac and Chase have made recent changes to their down payment assistance programs which could help more low-income buyers enter the market.

February 6, 2024
3 minutes

Housing affordability has reached critical levels in many areas as stubbornly low inventory and high demand have caused home prices to continue climbing — making grants and other financial incentives an essential part of the equation for some buyers. 

And recently, Freddie Mac and Chase have announced new credits and grants that could help more buyers enter the market.  

What's available to lower-income buyers? Freddie Mac is offering a $2,500 credit to borrowers who earn 50% or below their area median income, which can be used for a down payment or other closing costs. The credit is available to borrowers applying for various Freddie Mac mortgage products, such as the Home Possible program which allows buyers to put down as little as 3% of the home's purchase price. 

Why does this matter? Freddie Mac said that expanding credits and grants to lower income buyers will help many families with a first-time home purchase. In 2023, first-time homebuyers represented 51% of all purchases, Freddie Mac said in their announcement for the grant, adding that this was the highest percentage since the public-private mortgage giant started tracking this stat over 30 years ago. 

"Today's announcement is a vital lifeline for would-be homeowners, as studies show that down payment and closing costs are among the largest barriers to homeownership for very low-income homebuyers," Sonu Mittal, SVP and head of single-family acquisitions at Freddie Mac said in the announcement.

What else is out there for buyers? Chase recently announced that it had bumped its homebuyer grant from $5,000 to $7,500 in 15 markets across the country and removed the income limit to qualify. These grants can also be used for down payments or closing costs. The grant is available to those applying for FHA or VA loans, or for Chase's DreaMaker Mortgage loan program, which Chase says is open to 15,000 communities.

Since the program's start in 2021, Chase says that it has paid out $43.1 million in grants to more than 8,600 customers.

Where can buyers and agents find out about other credits? In addition to these two initiatives, there are many other programs for lower-income and first-time homebuyers. 

For clients who need down payment assistance, many resources can be found through a simple web search. Freddie Mac also has a portal called DPA One that is purposely designed to help borrowers find programs they would qualify for in Texas, Minnesota, Virginia, Florida, Kentucky, California, Illinois, North Carolina, Colorado and Pennsylvania.

Get the latest real estate news delivered to your inbox.