Downpayment Assistance

What is Downpayment Assistance?

Downpayment Assistance is a deferred second loan for homebuyers in Buncombe County, North Carolina.

• Buncombe County's Downpayment Assistance program provides up to $40,000 in forgivable second-lien financing for low- to moderate-income buyers purchasing a home in Buncombe County (including the City of Asheville). Funded by the County's general fund and HOME funds. Forgiven 1/180th per month over a 15-year affordability period; repaid on sale or non-owner-occupancy.
• Up to $40,000 0% interest deferred-payment second mortgage for down payment and closing costs. Forgiven over 15 years (1/180th per month) when used in conjunction with an Affordable Housing Services Program project.
• otherwise repayable on sale, transfer, or non-occupancy. Recipient must contribute at least $1,000 of own funds.
• Funding comes from Buncombe County General Fund; HUD HOME Investment Partnerships.

Do you have to pay it back?

Downpayment Assistance is deferred, so no payments are due until the home is sold, refinanced, or the first mortgage is paid off.

• Repayment is triggered by Sale, transfer, refinance with cash-out, or failure to occupy as primary residence within 15-year affordability period triggers repayment of unforgiven balance.
• The assistance is recorded in 2 position.
• Forgiveness and repayment terms are set by the program and can change — confirm them on the official program page before applying.

Who qualifies?

Downpayment Assistance is open to buyers who will live in the home as their primary residence.

What are the income limits?

Downpayment Assistance limits household income to 80% of the area median income, which varies by county and household size.

• Household income must not exceed 80% HUD AMI for Asheville, NC MSA (FY2025): 1p $47,600; 2p $54,400; 3p $61,200; 4p $68,000; 5p $73,450; 6p $78,900; 7p $84,350; 8p $89,800.
• The limit applies to total household income, not only the borrower’s.
• The program lists a maximum household size of 8.
• Area median income figures are published by HUD and updated annually, so check the current table for the county before relying on a number.

What kind of home can it be used for?

Downpayment Assistance caps the purchase price as follows: No fixed cap, but must not exceed 95% of HUD-published area median purchase price for the County.

• Eligible property types include Single-family detached, townhouse, condominium, or eligible manufactured home on permanent foundation.
• New construction is eligible.
• Manufactured homes are eligible.

Is there eligibility for specific groups?

Downpayment Assistance names active-duty service members, reservists and National Guard members, surviving spouses, law enforcement officers, firefighters, healthcare workers, and buyers with disabilities among the groups it serves.

• Being named here means the program mentions the group, not that membership alone qualifies an applicant — the rest of the eligibility rules still apply.

Where does it apply?

Downpayment Assistance serves buyers purchasing in Buncombe County, North Carolina.

How do you apply?

Applications for Downpayment Assistance go through the administering agency, which publishes the current terms and the application steps on its own site.

1. 1

   Take a homebuyer education course

   Required by the program, through HUD-approved housing counseling agency. 8-hour homebuyer education required prior to closing..

2. 2

   Contact the administering agency to reserve funds

   Funds are reserved through Lender or buyer applies via Affordable Housing office; first-come, first-served., and are subject to availability.

3. 3

   Work with a lender who handles the program

   Hey Prescott is not a lender and does not accept applications; this page describes the program so a buyer can take it to a lender or housing counselor.