Zillow Just Announced Down Payment Assistance for Homebuyers. Is It a Good Deal for North Texas Buyers?

October 29, 2026 | By Tanya O'Neil, Associate Broker | The Estancia Group at Real Brokerage

What if the biggest obstacle between you and buying a home wasn't your monthly mortgage payment, but coming up with the down payment?

That's exactly the problem Zillow is trying to solve with a new mortgage program announced October 28, 2026.

Zillow Home Loans is now offering qualified FHA buyers up to 3.5% of their home's purchase price toward their down payment. The assistance comes as a zero-interest second loan with no monthly payments, and it can be forgiven after five years.

Even better? Texas is included.

For buyers in Denton, Flower Mound, Argyle, Northlake, and surrounding North Texas communities, this could make homeownership possible sooner than expected.

But before you start celebrating a free down payment, let's look at how this program actually works, what it costs, and how it compares with other options already available in Texas.

How Much Money Could Zillow Actually Provide?

FHA loans typically require a minimum down payment of 3.5% for qualifying borrowers. Zillow's new program can cover that entire amount.

Here's what that looks like at different home prices:

These examples assume the purchase price does not exceed the appraised value, the buyer qualifies, and the property meets FHA loan limits and program requirements.

Consider a buyer purchasing a $400,000 home in Denton.

Normally, the minimum FHA down payment would be $14,000. Under Zillow's new program, an eligible buyer could receive that entire amount through down payment assistance.

That's $14,000 they wouldn't have to pull from savings at closing.

For someone who has a steady income and can comfortably afford the mortgage but hasn't accumulated a large down payment, that could be significant.

Wait. Is Zillow Really Giving Buyers Free Money?

Not exactly. And this is where the details matter.

Zillow's assistance is structured as a forgivable second mortgage.

That means:

• The assistance loan has a 0% interest rate.

• There are no monthly payments on that second loan.

• After five years of on-time mortgage payments and living in the home, the assistance can be completely forgiven.

• If you sell, refinance, or move out before five years, the assistance must be repaid in full.

Let's go back to that $400,000 home.

Imagine you receive $14,000 in assistance and purchase the home. Three years later, mortgage rates drop significantly, and you decide you want to refinance.

Under the program's announced terms, you would have to repay that $14,000 assistance loan.

That doesn't necessarily make refinancing a bad decision. It just means you need to factor that repayment into the math.

And considering how much mortgage rates can change over five years, that's not a detail I'd overlook.

Who Qualifies for Zillow's New Down Payment Assistance?

One of the more interesting features is that Zillow isn't limiting this program to first-time homebuyers.

According to the company's announcement, eligibility includes:

• A minimum credit score of 640.

• Financing through Zillow Home Loans using an FHA mortgage.

• Purchasing a primary residence.

• Qualifying for the full mortgage payment under normal underwriting guidelines.

• Meeting the program's other lending requirements.

There is no stated income cap, and buyers who have previously owned a home may qualify.

That's an important distinction because many assistance programs have income limits, purchase-price restrictions, or first-time buyer requirements.

Of course, qualifying for assistance doesn't automatically mean you qualify for the mortgage itself.

Your income, debts, credit history, property eligibility, and other financial factors still matter.

Does This Mean You Can Buy a House With No Money?

No. And I want to make that very clear.

Zero down payment does not necessarily mean zero cash needed to close.

Even when your down payment is covered, purchasing a home involves additional expenses.

These may include:

• Lender and title company closing costs

• Appraisal and inspection expenses

• Prepaid homeowners insurance and property taxes

• Initial escrow deposits

• Other transaction-related expenses

Zillow estimates closing costs typically range from 2% to 5% of the loan amount, although actual costs vary.

Buyers may be able to negotiate seller contributions toward eligible closing costs, depending on the transaction and loan guidelines.

And in some North Texas markets, where sellers are competing for qualified buyers, negotiating closing cost assistance can be an important part of the conversation.

The bottom line? Don't assume you need $20,000 or $30,000 saved to start exploring homeownership. But don't assume you can buy without any savings, either.

The Bigger Question: Is Zillow's Program Better Than Other Texas Down Payment Assistance Programs?

This is where I'd encourage buyers to slow down and compare their options.

Zillow isn't the first organization to offer down payment assistance. Texas already has established programs designed to help eligible buyers purchase homes.

Two important places to start are the Texas State Affordable Housing Corporation (TSAHC) and the Texas Department of Housing and Community Affairs (TDHCA).

1. TSAHC: Home Sweet Texas and Homes for Texas Heroes

TSAHC offers mortgage and down payment assistance programs through participating lenders.

Home Sweet Texas serves eligible homebuyers who meet program requirements, while Homes for Texas Heroes serves certain qualifying professions, including teachers, police officers, firefighters, EMS personnel, corrections officers, and veterans.

Depending on the program and available loan option, assistance may be structured differently, including grants or forgivable second loans.

Some buyers who aren't purchasing their first home may still qualify.

Income limits, credit requirements, loan rates, and other restrictions apply.

Why compare it with Zillow?

Depending on the assistance structure, a TSAHC option could offer different repayment terms or financing costs. The best choice depends on the actual loan offers, not just the amount of assistance.

2. TDHCA: My First Texas Home

The Texas Department of Housing and Community Affairs offers My First Texas Home, which combines qualifying mortgage financing with down payment and closing cost assistance.

This program generally targets first-time homebuyers, although certain exceptions can apply.

It also has income and purchase-price limits, along with homebuyer education and other requirements.

Why compare it with Zillow?

Unlike Zillow's assistance, which is specifically intended for the down payment, TDHCA assistance may help with eligible closing costs as well.

For a buyer who has enough money for the down payment but is struggling with total cash needed at closing, that distinction could be important.

3. Conventional Low-Down-Payment Loans

Here's another option buyers sometimes overlook.

Certain conventional mortgage programs allow qualified borrowers to purchase with as little as 3% down.

On a $400,000 home, that's $12,000.

That isn't free money, but a conventional loan may offer advantages depending on the borrower's credit, mortgage insurance costs, and long-term plans.

For example, conventional private mortgage insurance can generally be canceled once applicable equity and other requirements are met. FHA mortgage insurance follows different rules and can last for the life of the loan on certain mortgages.

A buyer with strong credit may discover that a conventional mortgage makes more financial sense, even if it requires bringing more money to closing.

Comparing Your Options

Program terms, availability, interest rates, and eligibility can change. Not every program can be combined with another, and the amount of assistance alone doesn't tell you which loan is best.

The One Comparison I'd Make Before Choosing Any Program

Let's say two lenders offer financing on the same $400,000 home.

Lender A offers $14,000 in down payment assistance through a forgivable second mortgage.

Lender B doesn't offer the same assistance but provides a more favorable interest rate or different mortgage insurance costs.

Which is better?

You can't know without comparing the actual numbers.

I'd want to see:

1. Cash needed at closing. How much money do you actually need to bring to the transaction after assistance, credits, and expenses?

2. Total monthly payment. Not just principal and interest, but property taxes, homeowners insurance, mortgage insurance, and applicable HOA dues.

3. Loan costs and interest rate. A slightly higher rate can add up over time. Compare Loan Estimates rather than assuming the lender offering the most assistance is offering the best deal.

4. What happens if your plans change? If you sell or refinance in three years, what do you owe?

5. How much savings will you have left? Getting into a home is one thing. Having money available when the air conditioner decides to retire in August is another.

That last point matters particularly in Texas, where property taxes, insurance premiums, and home maintenance can have a substantial impact on affordability.

My Take as a North Texas Realtor

After ten years in real estate, I've worked with buyers whose biggest challenge wasn't qualifying for a mortgage. It was figuring out how to purchase a home without draining their savings.

That's why I think Zillow's announcement is worth paying attention to.

I especially like that the program isn't restricted to first-time buyers and doesn't impose an income cap.

Those features could open doors for people who have been overlooked by traditional assistance programs.

But I'm not ready to call it the best option for every buyer.

The five-year repayment requirement is significant, especially for someone who may relocate, purchase a different home, or want to refinance if rates become more favorable.

And because buyers must finance through Zillow Home Loans, comparing that offer against other lenders becomes even more important.

The goal shouldn't be to get the biggest down payment assistance check. It should be to buy a home with financing that makes sense both today and several years from now.

Thinking About Buying in Denton County or North Texas?

If you've been putting off buying because you don't think you have enough saved, this announcement is a good reason to revisit the numbers.

Whether you're considering Denton, Flower Mound, Argyle, Northlake, Justin, or another North Texas community, there may be more financing options available than you realize.

I can help you understand the homebuying process, explore communities and price ranges, and connect you with lenders who can explain the financing programs you may qualify for.

You don't have to have everything figured out before starting that conversation.

Tanya O'Neil | Associate Broker

The Estancia Group at Real Brokerage

Serving Denton, Flower Mound, Argyle, Bartonville, Northlake, Justin, and surrounding North Texas communities.

This article is for general educational purposes and is not a mortgage approval or financing offer. Program eligibility, terms, interest rates, and availability are subject to lender verification and change.