A down payment for a home purchase is generally not refundable after the transaction is finalized. Once the closing occurs, the down payment becomes part of the buyer’s equity in the property and cannot be recovered. However, refunds may be possible under specific circumstances before closing, such as if the sale falls through due to the buyer’s failure to secure financing, the seller’s breach of contract, or other agreed-upon conditions outlined in the purchase agreement.

The refundability of a down payment hinges on the timing and terms of the transaction. Earnest money deposits, typically 1-3% of the purchase price, are held in escrow and may be refunded if the deal collapses before closing. For example, the Federal Housing Administration (FHA) permits refunds of earnest money if the buyer cancels the loan application or the seller backs out without a valid reason. According to the National Association of Realtors (NAR), approximately 3-5% of home purchases involve earnest money refunds, with most refunds processed within 30 days of the deal’s termination.

After closing, the down payment is irrevocable. The Consumer Financial Protection Bureau (CFPB) emphasizes that once the deed transfers to the buyer, the down payment is legally binding. State laws may offer limited exceptions, such as in California, where the Civil Code (1708) allows refunds if the seller fails to meet contractual obligations even after closing. However, such cases are rare and require court intervention. Data from the U.S. Department of Housing and Urban Development (HUD) shows that only 0.2% of homebuyers seek legal recourse for post-closing refund disputes, underscoring the finality of down payments after closing. Thus, while pre-closing refunds are possible, post-closing refunds are virtually unattainable without extraordinary legal circumstances.