Homelight Says More Buyers Are Hungry For Down Payment Help In 2026

As the U.S. housing market continues to face affordability headwinds, buyers are increasingly seeking down payment assistance and exploring alternative housing options, according to HomeLight’s second-quarter 2026 Lender Insights & Predictions report.

The report, released Wednesday, polled loan officers from 78 top mortgage companies in February, and it reveals a changing landscape shaped by high costs and shifting buyer behavior.

“The opportunity of access to home equity versus the sting of losing a historically low interest rate seems to have finally reached the tipping point that favors consumers moving forward with renewed hope and plans,” said Jeri Creson, a loan officer in Covington, Louisiana.

Despite this optimism, affordability remains a significant barrier. One-third of all potential borrowers are inquiring about down payment assistance or lower down payment programs, while 45% of lenders report frequent questions about zero-down mortgages.

HomeLight’s report cited ATTOM‘s January 2026 U.S. Foreclosure Market Report, which found that an increasing number of homeowners are facing foreclosure. Job loss or prolonged unemployment was cited as the primary factor, particularly among homeowners ages 35 to 44 in the South and West.

HomeLight said that 42% of loan officers surveyed predict an increase in foreclosures throughout 2026. Lenders emphasized that overall levels remain below historic peaks and urged struggling homeowners to act early.

Lenders noted that while older buyers and those in the 30-to-40 age range are putting down sizable amounts, younger buyers are actively seeking the lowest possible upfront costs. To meet this need, many are turning to the estimated 2,600 active homebuyer assistance programs available in the U.S.

In response to high prices, buyers are expressing interest in nontraditional homes. More than half of surveyed lenders said they have clients asking about financing for alternative homes, with manufactured and mobile homes being the top choices.

First-time homebuyers in the South and West are showing the most interest in these lower-cost entry options, which can also include tiny homes, barndominiums and shipping containers.

For existing homeowners, record equity is reshaping their decisions. The buy-before-you-sell strategy is gaining momentum, allowing homeowners to leverage their equity to purchase a new home before selling their current one. Fifty-three percent of loan officers named home equity lines of credit (HELOCs) as the top borrowing option.

Despite some holding back due to a lock-in effect generated by historically low rates during the COVID-19 pandemic, lenders identified several misconceptions that are keeping buyers on the sidelines. Chief among these are the beliefs that rates will return to a range of 3% to 4%, that waiting will make homes cheaper and that a 20% down payment is required.

Lenders broadly dismissed fears of a housing market crash, pointing to continued supply constraints.

“There is not a housing bubble,” said Marty Nicoll, a loan officer in Stroudsburg, Pennsylvania, who has 17 years of experience. “Prices continue to rise due to short supply. And if rates continue to drop, more buyers in the market will mean higher prices. It’s all about supply and demand.”