Utah Housing Corporation (UHC) Down Payment Assistance

Utah Housing Corporation (UHC) Down Payment Assistance: A First-Time Buyer’s Roadmap to $6,500

Feeling squeezed by rising home prices in Utah? You are not alone. According to local MLS data, the median home price along the Wasatch Front climbed roughly 9 % year-over-year. Yet, the Utah Housing Corporation (UHC) Down Payment Assistance program quietly hands qualified buyers up to $6,500—often the difference between renting another year and receiving a set of keys.

Today we will unpack the rules, run real-world numbers, and show exactly how to turn UHC’s funds into your front-door moment. Keep reading to learn:

• How the program works and why it’s different from a grant
• Eligibility checkpoints—credit, income, residency, and more
• Repayment myths debunked
• Pro tips from buyers who already cashed in

How the UHC Down Payment Assistance Program Works

The Utah Housing Corporation launched its down payment assistance in 1977 with a simple mission: keep homes attainable for moderate-income families. Instead of handing out a grant, UHC pairs a first mortgage—often FHA, VA, or USDA—with a second mortgage of up to $6,500 that covers part or all of your down payment and a slice of closing costs.

Snapshot: Key Benefits at a Glance

• Maximum Assistance: $6,500 or 3.5 % of the purchase price, whichever is less
• Interest Rate: 2 % above the first mortgage rate; fixed for the entire term
• Term Length: 30 years—no balloon payment surprises
• Closing Cost Coverage: Eligible; can combine with seller concessions
• Geographic Reach: Every county in Utah, from Cache to Washington

Because it is a repayable second mortgage, the program stays solvent and ready for the next wave of first-time buyers. That sustainability allowed UHC to serve more than 5,800 households in 2023 alone, according to the agency’s annual report.

People Also Ask: “What credit score is needed for UHC Down Payment Assistance?”

UHC partners with FHA, VA, and USDA loan guidelines, so the minimum credit score can vary by product. However, most participating lenders look for at least a 660 FICO when layering in the second mortgage. Want a smoother underwriting ride? Aim for 680+. Lenders report that buyers above that threshold see conditional approvals in as little as three days.

Credit weak spots do not automatically disqualify you. Many borrowers leverage free credit-counseling sessions offered through UHC-approved non-profits like AAA Fair Credit Foundation. A Salt Lake City nursing assistant we interviewed shaved her credit-card utilization from 85 % to 37 % in six weeks—just enough to squeak into 665 and grab her $6,500 check.

People Also Ask: “Is UHC Down Payment Assistance only for first-time buyers?”

Surprise—no. While the program targets first-time buyers, you’re eligible if you haven’t owned a primary residence in the past three years. Recently divorced? Moving back after military deployment? You may qualify even if you owned a home in another state in 2021. The flexible definition gives thousands of “returning” buyers a new shot at ownership.

Another pathway: Designated “target areas” in Ogden, Provo, and parts of Tooele waive the first-time requirement entirely because local officials want to jump-start homeownership rates. If you buy in one of those census tracts, UHC treats you like a rookie—even with prior ownership on your résumé.

Do I Qualify for UHC Down Payment Assistance?

Think of eligibility as a three-legged stool: income, purchase price, and credit. Knock out one leg and the stool wobbles.

1. Income Limits

• Standard counties: $114,000 for 1-2 person households; $130,000 for 3+
• High-cost counties (Salt Lake, Summit): up to $145,000 household income

Income is calculated using qualifying income—not gross income—so overtime, bonuses, or side-hustle cash may be partially excluded. A Weber County firefighter earning $89,000 base pay but $12,000 in overtime still qualified last year because underwriters used base pay only.

2. Purchase Price Caps

• One-unit home: $516,000 maximum purchase price
• Two-unit (duplex): $661,000 cap

Numbers adjust every May based on HUD’s area median income (AMI). If you’re planning a fall purchase, keep an eye on the clock: buyers under contract before an annual update retain old limits.

3. Credit & Underwriting Benchmarks

• Minimum 660 FICO (680 preferred for automated approval)
• No 60-day late payments in the last year
• Debt-to-income ratio usually capped around 45 %

Lenders can overlay tighter rules, so shop around. A statewide survey by the Utah Association of Mortgage Professionals found rate spreads of 0.375 % between the highest and lowest UHC lenders on the same day.

People Also Ask: “Do I have to repay the UHC Down Payment Assistance loan?”

Yes—but don’t let the word “repay” scare you. The second mortgage is amortized over 30 years with a fixed rate—often under 4 % in 2024’s environment. Monthly payments hover near $30-$35 per $6,000 borrowed. Many homeowners simply roll the second mortgage into a refinance once their equity grows, wiping the slate clean.

Better yet, there is no prepayment penalty. If a tech boom lifts your home’s value 20 % in two years—as happened in Lehi during the pandemic—you may choose to pay off the second earlier and save interest.

How Much Money Can I Really Save?

Picture a $400,000 starter home in Spanish Fork:

• Standard FHA down payment: $14,000 (3.5 %)
• Average closing costs in Utah: $7,200
• UHC Down Payment Assistance: $6,500

Without the program, you’d bring roughly $21,200 to the table. With UHC’s help, that drops to $14,700—a 31 % reduction in cash required. For many renters, that difference equals two years of savings pace or more.

But it’s not just upfront cash. When layered with today’s FHA rate of 6.25 %, keeping more funds in your pocket frees capital for moving costs, emergency reserves, or even solar panels to cut future energy bills.

A Micro-Story: Ogden Teacher Turns Rent Into Equity

Three weeks before school started, Paula R., a sixth-grade science teacher in Ogden, found a 1950s bungalow steps from her campus. List price: $335,000. Her savings? $8,100. UHC’s $6,500 bridge plus $2,000 in seller credits meant she brought $-0- to closing aside from her earnest-money check. Six months later, Paula jokes that “backyard experiments” now include planting tomatoes instead of dissecting owl pellets. Her monthly mortgage is $148 less than her former rent, thanks to a lower first-mortgage rate exclusive to UHC borrowers in November 2023.

Pro Tips for Navigating Utah Housing Corporation (UHC) Down Payment Assistance

1. Start with a UHC-approved lender. Not every bank offers the program. UHC’s site lists 40+ lenders; call at least three.
2. Ask about rate locks. Some lenders allow a 75-day lock specifically for UHC loans, protecting you against rate spikes while you shop.
3. Combine with local city grants. Salt Lake City’s Home Sweet Home program stacks up to $15,000 more—yes, you can layer both if funds permit.
4. Request seller concessions carefully. FHA caps seller concessions at 6 % of purchase price. Make sure combined UHC funds + concessions don’t exceed that ceiling.
5. Budget for appraisal gaps. Rapid appreciation means appraisals can lag. Keep $1,000-$2,000 liquid just in case.

Tax Advantages & Long-Term Upside

Homeownership in Utah isn’t just a lifestyle upgrade; it can be a tax play. Mortgage interest and property taxes remain deductible for many households under the IRS standard deduction thresholds. Meanwhile, Utah’s low 0.36 % property tax rate (per Tax Foundation rankings) keeps annual carrying costs modest versus neighboring states.

Add the equity kicker: Salt Lake County homeowners saw an average 72 % equity gain between 2017 and 2022. Even if future appreciation halves, today’s UHC buyers could build six-figure wealth within a decade—value a renter never sees.

Combining Utah Housing down payment program with 2-1 Buydown Strategies

Because the UHC second mortgage covers down payment, some buyers divert savings to a temporary interest-rate buydown. A popular option is the 2-1 buydown, lowering your interest rate 2 % the first year and 1 % the second. UHC permits this structure as long as the first mortgage meets FHA guidelines and seller or builder funds the buydown. The result? A $400,000 loan payment could drop $437 per month in year one—nice breathing room during the expensive “new homeowner” phase.

FAQ

What is the minimum down payment after UHC assistance?
FHA’s 3.5 % still applies, but the UHC second mortgage can cover it entirely, leaving zero out-of-pocket for down payment.

Can I use UHC funds for a new-build home?
Yes, as long as the builder is licensed in Utah and the home meets FHA/VA/USDA guidelines.

Does UHC require homebuyer education?
Yes. A HUD-approved eight-hour course (often online) must be completed before closing.

Are condos eligible for Utah Housing Corporation assistance?
Only if the condo project is FHA-approved or meets VA/USDA standards. Check HUD’s database.

What happens if I sell my home early?
You must pay off the remaining balance of the second mortgage at sale, but no additional fees or recapture taxes apply.

Ready to Open the Door?

If climbing Utah’s property ladder has felt like summiting Lone Peak in flip-flops, the Utah Housing Corporation (UHC) Down Payment Assistance program hands you hiking boots, water, and a map. Our team has guided hundreds of first-time buyers through UHC’s paperwork maze, and we’re eager to make you next.

Check your eligibility in minutes or reach out to our licensed advisors for a free cost breakdown tailored to your zip code. By this time next month, that rent check could be history.