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Loans · Fannie Mae Selling GuideEmployer down payment assistance: how Fannie Mae treats help from your employer

Some employers help workers buy a home. Under Fannie Mae's Selling Guide (B3-4.3-08), employer assistance can be a grant; a direct, fully repayable second mortgage or unsecured loan; a forgivable second mortgage or unsecured loan; or a deferred-payment second mortgage or unsecured loan. It can fund all or part of the down payment and closing costs on a principal residence – not a second home or investment property – and also reserves, except when it is an unsecured loan. The money must come directly from the employer, which includes an employer-affiliated credit union. On a one-unit principal residence the borrower needs no minimum contribution from their own funds at any LTV, and the same is true for two to four units at 80% LTV or less; above 80% on two to four units the borrower puts in 5% of their own first. A second mortgage with regular payments counts in the debt-to-income ratio; one with no regular payments doesn't. The lender documents that it is an established company program, not a one-off accommodation, the amount, the terms of any loan, any other benefits such as relocation, and that the funds came directly from the employer.

Forms it can take

  1. Grant

    Money the employee doesn't repay.

  2. Repayable loan

    A direct, fully repayable second mortgage or unsecured loan.

  3. Forgivable loan

    A second mortgage or unsecured loan forgiven over time.

  4. Deferred loan

    A deferred-payment second mortgage or unsecured loan.

The rules (B3-4.3-08)

  1. Principal residence only

    Not for a second home or investment property.

  2. Own funds

    None needed on one unit; 5% on 2–4 units above 80% LTV.

  3. Straight from the employer

    Directly or through an employer-affiliated credit union.

  4. Payments in DTI

    Only when the second mortgage requires regular payments.

What the TC can do

  • Ask the buyer early whether an employer program is involved and connect HR with the lender.
  • Get the program's award letter or loan agreement to the lender.
  • Confirm with the closing agent how and when the employer's funds arrive.

Questions buyers ask

Can my employer pay my down payment?

With a Fannie Mae loan on a principal residence, yes – as a grant or a repayable, forgivable or deferred loan, paid directly by the employer or its affiliated credit union, under an established company program (Selling Guide B3-4.3-08).

Do I need my own money if my employer helps with the down payment?

Not on a one-unit principal residence. On a 2–4 unit home above 80% LTV you contribute 5% from your own funds first.

Can employer assistance be used for an investment property?

No. Employer assistance funds aren't allowed on a second home or an investment property.

Related guides

Add the employer's HR contact to the deal's people in ClosingCode, so documents and dates stay in one place.

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Source: Fannie Mae Selling Guide B3-4.3-08, Employer Assistance (September 29, 2015), read at selling-guide.fanniemae.com on October 26, 2026.

General information, not financial advice. The lender decides which funds are acceptable. ClosingCode is software; it is not a lender. This guide is not a substitute for the advice or services of an attorney.