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February 11, 2022
Question

Do I have to pay taxes for funds received from a down payment assistance grant?

  • February 11, 2022
  • 1 reply
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1 reply

February 12, 2022

No, down payment assistance will not be included in the homebuyer’s gross income for federal income tax purposes.  However, if the buyer receives down payment assistance from a seller-funded program, the homebuyer must reduce the cost basis of the home because the down payment assistance represents a rebate or reduction in the purchase price thus lowering the homebuyer’s cost basis.

 

Down Payment Assistance Programs