Zillow Will Help Cover Your FHA Down Payment. Here's the Catch

Saving for a down payment is often the biggest hurdle for would-be buyers.

On October 28, 2026, Zillow Home Loans launched a program offering eligible FHA borrowers up to 3.5% of a home's price or appraised value, whichever is lower.

How it works

The help comes as a second loan with no interest and no monthly payment.

That amount matches the FHA minimum down payment.

Buyers can add up to 6.5% of their own money for a 10% down payment.

Forgiveness and repayment

The assistance loan is forgiven automatically after five years of on-time payments on the main mortgage.

The full amount comes due if the buyer moves out, sells or refinances before year five.

Who qualifies

• There is no income cap and no first-time-buyer requirement.
• Buyers need a minimum 640 credit score and must buy a primary residence.
• They must get their FHA mortgage through Zillow Home Loans and qualify for the full monthly payment.

Where it's available

The program covers 43 states and Washington, D.C.

Reports disagree on the excluded states.

• Fox lists Arizona, Delaware, Florida, Massachusetts, New York, Vermont and Virginia.
• HousingWire lists Rhode Island in place of Vermont.

Check Zillow's program page before counting on it.

What it doesn't cover

The main FHA loan still carries FHA mortgage insurance, a standard interest rate and a monthly payment.

Closing costs aren't included, and Zillow estimates they run 2% to 5% of the loan amount.

Zillow's own analysis estimated savings of about $90 a month on a $366,157 home.

That figure assumes a 6.78% rate, so it isn't a personal loan offer.

Before you apply

• Ask for a written cash-to-close estimate.
• Ask how a low appraisal would change your assistance.
• Compare Loan Estimates from other FHA lenders, since you must use Zillow's lending arm.
• Look at state, local and nonprofit assistance, though some have income or first-time-buyer limits.

References

1. Phillips, P. "Zillow Home Loans will cover your FHA down payment with zero interest in 43 states: How it works." FOX Local. Oct. 28, 2026. https://www.fox26houston.com/news/zillow-home-loans-will-cover-your-fha-down-payment-zero-interest-43-states-how-works
2. "Zillow Offers Up to 3.5% in FHA Down Payment Help — What Agents Should Check." The Close. Nov. 1, 2026. https://theclose.com/finance-lending/news-zillow-fha-down-payment-assistance/
3. "Zillow FHA down payment loan." HousingWire. Date not shown in the search result. https://www.housingwire.com/articles/zillow-fha-down-payment-loan/
4. FOX 4 version of the same report, for the repayment terms. https://www.fox4news.com/news/zillow-home-loans-will-cover-your-fha-down-payment-zero-interest-43-states-how-works

Need help with your down payment? Find resources and assistance here!