In the United States, whether you can recover your down payment after failing to secure a mortgage depends on the loan program and terms. Generally, conventional loans do not refund down payments if the mortgage is denied, but government-backed programs like FHA or VA loans may offer partial or full refunds under specific conditions. Lenders or third-party services occasionally provide refunds as part of their guarantee programs, but these are exceptions.

The refund policy hinges on whether the down payment was refundable from the outset. For example, FHA loans require a 3.5% down payment, which is typically non-refundable unless the mortgage application is withdrawn before underwriting. However, if a lender denies the loan due to program incompatibility (e.g., income limits not met), some programs may refund the down payment. Data from the Consumer Financial Protection Bureau (CFPB) shows that 20% of mortgage applicants face denial, but fewer than 5% of these cases result in down payment refunds, mostly through lender-specific guarantees. The Federal Housing Administration (FHA) explicitly states that down payments are non-refundable after conditional approval, while VA loans may refund the deposit if the borrower cancels the loan before closing. Additionally, real estate agent “buy-down” programs sometimes refund down payments if the sale falls through, but these are rare and vary by state. Thus, while refund opportunities exist, they are limited to specific scenarios and require adherence to strict timelines or lender policies.