SB240, UP TO $20K TOWARD A NEW HOME
Utah's SB240 program provides up to $20,000 for first-time buyers purchasing new construction. Structured as a 0% interest deferred loan with no monthly payments, repaid only at sale or refinance, with a shared-equity recapture provision. Stack it with UHC and you're looking at up to $44,000 in combined assistance.
✦ Program Overview
What Is the SB240 Program?
SB240 refers to Utah Senate Bill 240, which created an assistance program to make new homes more accessible to first-time buyers while stimulating housing construction statewide. The program is administered through Utah Housing Corporation via participating lenders and builders.
Unlike a true grant, SB240 is structured as a 0% interest deferred loan with shared-equity recapture. While you live in the home there are no monthly payments and no interest accrues. At sale or refinance you repay the lesser of (a) the original assistance amount or (b) 50% of the home's accrued equity. The state shares in appreciation in exchange for the up-front help.
Key Facts
- Maximum assistance: $20,000
- Who qualifies: First-time buyers (no ownership in past 3 years)
- Property type: NEW CONSTRUCTION ONLY
- Structure: 0% deferred loan, no monthly payments
- Repayment: At sale/refi, lesser of assistance amount or 50% of equity
- Income limits: Apply (similar to UHC)
- Education course: Required
- Stackable: Yes, with UHC DPA
Source: Utah Housing Corporation, First-Time Homebuyer Assistance Program FAQ (PDF)
✦ Legislative Intent
Why New Construction? The Reasoning Behind SB240
Utah has a housing supply shortage. SB240 was designed to address this by incentivizing new construction purchases, giving buyers a financial reason to choose a newly built home over resale.
More Supply
Every SB240 purchase puts money toward a new unit, directly addressing Utah's housing shortage by incentivizing builders to keep building.
Borrower-Friendly Terms
At $20,000, SB240 is among the largest single assistance amounts available in Utah, with 0% interest, no monthly payments, and repayment only at sale or refinance.
Builder Warranties
New construction comes with builder warranties (typically 1-year workmanship, 2-year systems, 10-year structural), fewer surprise repair costs in early ownership.
✦ Program Comparison
SB240 vs. Other Utah DPA Programs
| Program | Max Amount | Repayment | Property Type |
|---|---|---|---|
| SB240 Assistance ⭐ | $20,000 | 0% deferred + shared-equity recapture at sale/refi | New construction only |
| UHC DPA | Up to 6% of loan | Second mortgage at 1% above first-mortgage rate (verify current UHC product matrix) | Any eligible home |
| Salt Lake County DPA | Up to $20,000 | Deferred second mortgage, repaid at sale or refi | Any eligible home |
| Davis County DPA | Up to $50,000 | 1% interest, no monthly payments, repaid at sale or refi | Any eligible home |
| Utah County HOME | Up to $10,000 | Deferred second mortgage | Any eligible home |
| Weber County DPA | Up to $7,500 | Deferred second mortgage | Any eligible home |
SB240 has the most favorable repayment structure (0% interest, no monthly payments, recapture only at sale/refi) but is restricted to new construction. Repayment terms across programs vary, verify current details with a participating lender.
✦ Program Stacking
Stack SB240 for Maximum Assistance
SB240 can be combined with UHC's down payment assistance. The combination is the highest assistance ceiling available anywhere in Utah's first-time buyer programs.
New Construction in Utah County
- SB240 Assistance: $20,000
- UHC 6% DPA on $400K loan: $24,000
✓ SB240 has shared-equity recapture at sale/refi
New Construction in Salt Lake County
- SB240 Assistance: $20,000
- Salt Lake County DPA: up to $20,000
- (verify lender compatibility)
✓ Both programs include repayment terms, see details below
New Construction + Full Stack
- SB240 Assistance: $20,000
- UHC 6% DPA: up to $24,000
✓ Most common stacking combo
✦ Application Process
How to Get the SB240 Grant
Find a Participating Lender
Not all lenders offer SB240. Start with a lender approved for both SB240 and UHC programs. First Home Utah can connect you with the right lender.
Complete Homebuyer Education
Take a HUD-approved homebuyer education course (eHome America, Framework, or NeighborWorks). ~$75–$99, 6–8 hours online. Certificate valid 12 months.
Find a SB240-Participating Builder
Ask builder sales offices if they participate in SB240 or work with SB240-approved lenders. Developments in Saratoga Springs, Eagle Mountain, Lehi, and Syracuse often participate.
Get Pre-Approved Before Signing
Confirm SB240 compatibility BEFORE signing a purchase contract. Once you are under contract, the process mirrors a standard purchase closing.
Close With Assistance Applied
The SB240 funds are applied at closing, reducing your cash needed at the closing table, alongside any UHC DPA you are stacking. Repayment terms (0% deferred, shared-equity recapture at sale/refi) take effect.
✦ Real Client Stories
What Our Clients Say
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SB240 + UHC stacking on a new build: what's your real total?
New construction + SB240 + UHC DPA is the most powerful assistance stack in Utah. Let's see if your target development participates and whether you qualify.
Official Sources
Verify current program terms with the administrator before relying on them in a transaction. Program details can change annually.