Can You Use Down Payment Assistance With an Islamic Mortgage?

Yes, in many cases you can use down payment assistance with an Islamic mortgage. Saving for a down payment is one of the most difficult parts of buying a home. To make it more affordable, Guidance works with down payment assistance programs in nine states, and more programs are being added. This assistance can be paired with halal home financing. Yet most buyers who qualify for this kind of help never use it.

Here is where these programs are offered, what they provide, and how to find out if you could qualify to take part.

What Is Down Payment Assistance?

Down payment assistance (DPA) is money from a city, county, housing agency, or nonprofit that helps cover your down payment or closing costs.

Not every program works with every type of home financing. Guidance participates in certain programs that can be paired with its Declining Balance Co-ownership Program, which is a halal mortgage with no riba, or interest.

Your Account Executive will confirm which programs apply to your purchase.

Where Are These Programs Available?

Each program is run locally, so the home you buy must be inside that program’s city, county, or service area to participate. Guidance currently works with programs in the following locations:

Florida (Orange County, Tampa, and Tamarac)
Illinois
Minnesota (Edina, Minneapolis, and other parts of the Twin Cities area and greater Minnesota)
Ohio (Cleveland area)
Oregon (Portland)
Pennsylvania (Philadelphia and Montgomery County)
Virginia (Loudoun County)
Washington (Vancouver and Clark County)
Wisconsin (Menomonie)

Minnesota has the most options, with six programs across the state.

Guidance is adding new programs on a regular basis. If you’re buying somewhere not listed here, ask your Account Executive for the latest list.

What Kinds of Assistance Are Available?

The programs Guidance works with come in two forms:

Grants do not need to be paid back, as long as you meet the program’s conditions. Grants are currently available in Philadelphia, Vancouver, and Clark County.
Assistance loans are the most common type. The program lends you money for your down payment or closing costs, recorded as a second lien on the home and separate from your Guidance financing. Depending on the program, it may be forgiven over time or repaid later, interest-free.

Your Account Executive can explain the terms of any program before you commit to it.

Who Qualifies for Down Payment Assistance?

Each program sets its own rules, but most look at the same few things:

Location. The home must be inside the program’s service area.
Household income. Limits usually depend on how many people live in your household. Among the programs Guidance works with, the upper limits range from about $98,000 to more than $225,000.
Home price. Some programs cap the purchase price. Where a cap applies, it ranges from about $305,000 to more than $750,000.
Credit score. Where a program sets its own minimum, it is 600 or 620. Many programs do not list a minimum credit score.

Some programs are specifically for first-time homebuyers, and some of them require that you complete a homebuyer education course. Some programs require that the home be your primary residence, and some are designed for specific communities or groups.

How Much Money Do You Need for a Down Payment?

You do not need 20% down. With Guidance Residential, homebuyers can make a down payment as low as 5%, and sometimes 3%.

Depending on the program, assistance can help cover part of that down payment, your closing costs, or both. Your exact amount depends on the home’s price, your financing, and the program you use.

How Do You Get Started?

Get pre-qualified. This gives you an estimate of your price range before you look at programs.
Tell your Account Executive where you plan to buy. The city and county determine which programs are available to you.
Ask which programs you may qualify for. Your Account Executive can review your income, price range, and location against each program’s rules.
Start early. Some programs require approval or a course before closing, and some have limited funding.

You can also find the Guidance team that serves your area.

Frequently Asked Questions

Do I have to be a first-time homebuyer?

Not always. Many programs are limited to first-time homebuyers, but not all. Your Account Executive can tell you which programs you may qualify for.

Can I combine down payment assistance with a gift from family?

Often, yes, but the rules vary by program. If a family member plans to help, tell your Account Executive early so you know what documentation the gift will need.

Can I use more than one down payment assistance program?

Some programs can be combined, while others do not allow it. Your Account Executive can check whether the programs in your area can be used together for your purchase.

What happens if I sell or move before the assistance is forgiven?

If your program forgives the assistance over time and you sell, refinance, or move out before that period ends, you may need to repay part or all of it. Ask about these terms before you commit to a program.

Can I use down payment assistance to refinance?

No. Down payment assistance programs are designed for home purchases. If you already own your home, your Account Executive can walk you through Guidance’s refinancing options.

What if there is no program where I want to buy?

Guidance is adding new programs on a regular basis. Ask your Account Executive for the latest list before you start your search.

Ready to Learn More?

Guidance Residential has provided more than $12 billion in financing to nearly 45,000 families over 25 years. If you’re ready to explore halal financing for your home purchase, start with a quick pre-qualification. It’s free, fast, and there’s no obligation.

Learn more and get started on your home finance journey today.

Written in November 2026.