What Is the Loan to Own Program and Who Qualifies in Utah?

This is one of the most valuable, least understood assistance programs available to Utah County buyers right now. Here is exactly what it offers and who actually qualifies.

What Loan to Own Actually Is

Loan to Own is a down payment and closing cost assistance program administered through Provo City on behalf of the Utah County Consortium of Cities. It provides up to $40,000 as a second-position loan at 0 percent interest with deferred payments, meaning you make no monthly payment on this assistance at all. The loan simply sits behind your primary mortgage until you sell, refinance, or the home stops being your primary residence, at which point it becomes due.

Who Qualifies

To qualify, your household income must fall at or below 80 percent of the area median income for Utah County. You must also be a first-time homebuyer, generally defined as not having owned a home in the past three years, complete a homebuyer education course, and make a minimum personal contribution toward the purchase, often around $1,000.

Which Cities Are Covered

The program is available across most of Utah County, though a small number of specific cities have historically been excluded from participation. Because these exclusions can shift, it is worth confirming current eligibility for your specific target city with a participating lender before assuming a particular home qualifies.

How the Money Can Be Used

Loan to Own funds can be applied toward your down payment and closing costs. They cannot be used for prepaid items like upfront interest, taxes, or insurance escrows, so it is important to understand exactly what expenses the assistance does and does not cover as you build your closing budget.

The Forgiveness Feature

One of the most valuable parts of this program is loan forgiveness. If you remain in the home as your primary residence for the full affordability period, you may become eligible for 50 percent forgiveness of the loan balance. This forgiveness is not incremental, meaning it applies as a full benefit at the end of the qualifying period rather than accruing gradually year by year.

The Early Sale Penalty

If you sell within two years of closing, you may face a significant penalty, potentially around $5,000, in addition to repaying the full assistance amount. If there is a real chance you might sell within that window, this program may not be the right fit, and alternatives like the Chenoa Fund or a standard Utah Housing loan might make more sense for your situation.

Why This Program Is Worth Exploring

At up to $40,000, this is one of the largest local down payment assistance amounts available anywhere along the Wasatch Front. For a qualifying buyer purchasing a median-priced Utah County home, this can cover the entire down payment requirement on a conventional or FHA loan, dramatically reducing what you need saved to buy.

If you think you might qualify and want to understand exactly what this program would mean for your specific purchase, I would be glad to connect you with a lender experienced in Utah County's assistance programs.

Frequently Asked Questions

How much does the Loan to Own program provide?

Up to $40,000 in down payment and closing cost assistance as a 0 percent interest, deferred second loan.

Who qualifies for Loan to Own in Utah County?

First-time buyers, generally defined as not owning a home in the past three years, with household income at or below 80 percent of the area median income.

Do I have to pay back the Loan to Own assistance?

Yes, eventually, unless you qualify for the 50 percent forgiveness benefit by staying in the home as your primary residence for the full affordability period.

What happens if I sell within two years of using this program?

You may face a penalty, potentially around $5,000, in addition to repaying the full assistance amount, so this program is best suited for buyers planning to stay longer term.

Does the Loan to Own program cover all of Utah County?

Most cities participate, though a small number have historically been excluded, so it is worth confirming current eligibility for your specific target city.

If you want to find out whether you qualify for the Loan to Own program, I would love to connect you with a lender who specializes in these Utah County assistance options. Call or text me at 801-636-3609.