Utah Housing offers more than the FirstHome bond loan: FHA/VA and Freddie Mac HFA Advantage first mortgages, Traditional and Deferred DPA seconds, and new construction assistance. Here’s how each works and what gets repaid.
Utah Housing Corporation (UHC) is Utah’s housing finance agency. People often call it the Utah bond program, but that’s only part of the story. Only UHC’s FirstHome loan is financed with mortgage revenue bonds. UHC also offers FHA/VA and Freddie Mac HFA Advantage first mortgages, two kinds of down payment assistance second mortgage, and separate state-funded programs. The rules, costs and whether you must be a first-time buyer depend on which piece you use.
Everything below comes from UHC’s own website and documents, checked on November 7, 2026. UHC changes rates, limits and funding regularly, so treat the numbers here as a snapshot and confirm current terms with a UHC Participating Lender.
How it works: a UHC first mortgage, plus optional help
UHC says its first mortgages are 30-year fixed-rate loans, available only through UHC-approved Participating Lenders. UHC services both its first mortgage and its down payment assistance second, so you make both payments to UHC. Its DPA and loan programs page lists three first mortgage options:
FirstHome: for first-time homebuyers. UHC says it typically has UHC’s lowest rate, with lower purchase price and income limits. It’s the bond-financed option. UHC’s page listed a 660 minimum credit score on a tri-merge report.
FHA/VA: open to first-time and repeat buyers, with higher income and price limits than FirstHome and a rate UHC describes as slightly higher. UHC’s page listed a 620 minimum credit score.
Freddie Mac HFA Advantage: UHC says it may have a higher rate but lower mortgage insurance costs, which may lower the monthly payment. UHC’s page listed a 680 minimum credit score.
Credit is only one part of approval. Income limits, purchase price limits (for FirstHome), loan limits and full underwriting also apply. Lenders may have stricter requirements.
UHC down payment assistance: two different seconds
UHC’s down payment assistance is a second mortgage, not a grant. On its DPA page, UHC describes two versions, both paired with a UHC first mortgage:
Traditional DPA: up to 6% of the first mortgage, capped at $27,500. A 30-year fixed-rate second with a rate 1% higher than the first mortgage, but not above 8% and not below the UHC first mortgage rate. A monthly payment is required.
Deferred DPA: up to 3.5% of the first mortgage, capped at $27,500. A 30-year second at a fixed 3.5% deferred simple interest rate. There’s no monthly payment. The principal and the deferred interest are due at maturity, sale or refinance.
The tradeoff is simple. Traditional DPA adds a monthly payment now. Deferred DPA keeps the payment off your monthly budget, but the balance plus interest is still owed later.
Hypothetical example (illustration only)
Traditional DPA: $15,000 at a hypothetical 7.5% for 30 years is about $104.88 a month, about $37,758 in total payments if it runs the full term.
Deferred DPA: $15,000 at 3.5% simple interest accrues $525 a year. After 5 years that’s $2,625 of interest, so about $17,625 owed if you sell or refinance then.
These are made-up numbers to show how the structures work, not current UHC rates or a quote. UHC posts current rates on its website.
First-time Homebuyer Assistance Program (new construction)
This is a separate, state-funded program created by Utah Senate Bill 240 (2023) and administered by UHC. According to UHC’s program page and program FAQ (updated 7/16/26):
It’s for first-time homebuyers buying a newly constructed home that hasn’t been lived in yet.
You may receive up to $20,000, usable for down payment, closing costs and/or a permanent interest rate buydown.
It’s a 0% interest loan with no monthly payment, secured by a recorded deed of trust. It isn’t a grant.
When you sell or refinance, you repay the lesser of the assistance amount or 50% of your home equity, as the FAQ defines it. If you refinance into a new qualifying UHC loan, the program loan may be resubordinated with no payment due at that time.
You must use a UHC Participating Lender and a UHC first mortgage, and you must have lived in Utah for at least the 12 months before closing.
The FAQ lists a $450,000 maximum purchase price, which may be adjusted by location or home type. Income limits follow the UHC loan program you use.
Funds are available until depleted. UHC’s homebuyer page shows a running count of remaining assistance.
The FAQ says it can be combined with UHC’s DPA second (in third lien position), but not with UHC’s Veterans or Law Enforcement grants.
Hypothetical repayment example (illustration only)
Say you received $20,000 and later sell for $420,000, with a $380,000 balance on the qualifying UHC loan(s) and $4,200 (1% of the price) of seller-paid closing costs. Home equity under the FAQ formula is $420,000 − $380,000 − $4,200 = $35,800. Half of that is $17,900. That’s less than $20,000, so the repayment would be $17,900. Real outcomes depend on your actual numbers and the program documents.
First-time buyer: required for some products, not all
Not every UHC option requires you to be a first-time buyer. UHC says FirstHome is for first-time homebuyers, while its FHA/VA loan is open to first-time and repeat buyers. The new construction program uses a first-time homebuyer definition based on the three-year non-ownership test in Internal Revenue Code Section 143(d), with a single-parent exception described in the FAQ. Your lender confirms which definition applies to the product you’re using.
Income and purchase price limits
UHC publishes income and purchase price limits by program and county. FirstHome has both household income and acquisition cost limits that vary by county and family size. UHC’s FHA/VA and Freddie Mac HFA Advantage options list a qualifying income limit and follow loan amount limits rather than a FirstHome-style price cap. Check the current table for your county, since UHC updates it.
Recapture tax: a FirstHome-only issue
Because FirstHome loans are financed with mortgage revenue bonds, federal law can impose a recapture tax if you sell within the first nine years. UHC’s Understanding Recapture explainer says all three of its conditions must be met for the tax to apply, including a sale within nine years and a gain on the sale, plus income tests. It also says UHC may reimburse borrowers who pay it. The tax is calculated on IRS Form 8828. UHC doesn’t calculate it for you, so talk to a tax professional before you sell.
Other UHC-administered programs
UHC’s grants and assistance page also lists a Utah Homebuyer Veteran Grant (up to $2,500 that doesn’t require repayment, for eligible first-time Utah homebuyers who are service members or Veterans separated in the last five years) and a Law Enforcement and Correctional Officer program. Funding for these can run out. On November 7, 2026, UHC’s homebuyer page showed the law enforcement program at zero remaining, with a note to contact an approved lender about availability.
Education, refinancing and paperwork
UHC lists homebuyer education options, including Freddie Mac CreditSmart and HUD-approved educators. UHC doesn’t administer the classes itself. Ask your lender whether your loan requires a course and which one counts. See UHC’s homebuyer education page.
UHC allows refinancing of its loans, and subordination of its DPA second and new-construction program loan, when the first mortgage is refinanced with a UHC refinance loan. See UHC refinance and subordination.
Expect the normal mortgage documents (income, assets, credit, ID) plus program forms, such as UHC’s Program and Repayment Disclosure for the new construction program. Your lender gives you the list.
Questions to ask a UHC Participating Lender
Which UHC first mortgage am I eligible for, and how do the payments compare with and without DPA?
Traditional or Deferred DPA: what is the total cost over the time I expect to own the home?
Am I under the income and price limits for my county and household?
Is new construction assistance still available, and can it be reserved now?
If I choose FirstHome, what does my recapture notice say?
How does UHC compare with a conventional loan such as HomeReady, Home Possible or HomeOne for my situation?
Utah Housing limits for Davis, Weber and Salt Lake counties
When checked on November 7, 2026, UHC’s income and purchase price limits page listed these FirstHome limits. The page didn’t show an effective date, so confirm current figures with a UHC Participating Lender.
Davis, Morgan, Summit, Wasatch and Weber counties: household income up to $141,400 (family of 1–2) or $164,600 (family of 3+); maximum acquisition cost $778,500.
Salt Lake County: household income up to $126,100 (family of 1–2) or $145,000 (family of 3+); maximum acquisition cost $666,600.
FHA/VA and Freddie Mac HFA Advantage: UHC listed a $165,200 qualifying income limit for all counties, with no purchase price limit; loan amount limits apply as UHC lists them.
Local programs can sit on top of UHC in some areas. See Davis County Homeownership Assistance and Own in Ogden and Weber County Down Payment Assistance for their current status, and How to Compare Down Payment Assistance Programs before you choose.
FAQ
Is Utah Housing only for first-time buyers?
No. FirstHome and the new construction program are for first-time homebuyers, but UHC says its FHA/VA loan is open to buyers who have owned before.
Is Utah Housing down payment assistance free money?
No. UHC’s DPA is a second mortgage, either with monthly payments (Traditional) or deferred with interest (Deferred). The new construction assistance is a 0% loan that is repaid on sale or refinance under its formula.
Can I buy with no money out of pocket?
UHC says that combining its first mortgage and DPA, qualified borrowers can buy with little or no cash investment. That isn’t guaranteed. It depends on the price, closing costs, prepaid items, any lender requirements and what the assistance covers.
Do I have to use a specific lender?
Yes. UHC programs are offered only through UHC-approved Participating Lenders.
Next step
If you’re weighing Utah Housing against a conventional or FHA option, contact me and I’ll help you compare the payment and total cost. Please don’t send your Social Security number, tax returns or bank statements through the contact form or by email. Related reading: How Much Money Do You Need to Buy a House? and FHA vs Conventional Loans.
Sources
Utah Housing: First-time Homebuyers Assistance Program (New Construction)
Utah Housing: First-time Homebuyer Assistance Program FAQ (updated 7/16/26)
Sources checked November 7, 2026. Jimmy Hobson, NMLS #1514540, UMortgage, powered by NEXA Lending (NMLS #1660690). This article is general education and is not affiliated with or endorsed by Utah Housing Corporation. It is not a loan approval or commitment to lend. Program terms, rates, limits and funding change, and eligibility depends on full underwriting and program approval.
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