May one give a loan from Maaser, e.g. to help with a down payment? What terms would apply?
Yes, some Maaser funds may be used to give an interest free loan. (When doing so, it is best that you have this in mind when separating the Maaser.) In fact, many Poskim recommend the practice of using Maaser funds to give out loans, because the money will help more people this way.
However this is only as long as the immediate needs of the poor are not neglected.
Therefore: If the loan is being given to a poor person who is otherwise eligible to receive it as Tzedaka (but perhaps is more comfortable taking it as a loan), or being given to a Gmach with a reputable Gabbai, one may loan or give them the full percentage of the Maaser for their needs.
But if the loan is being given to someone who is financially stable for investment purposes, it is recommended that the majority of the Maaser should be given to people or organizations who are eligible to receive Tzedaka, and only the remaining amount (a third or up to half of the Maaser) should be designated to a Gmach fund which may be lent without restrictions of who can benefit or for how long it can be borrowed.
As a reminder, you should be mindful to ensure that when the money is returned, you remember that it is to be lent again or given to a Tzedaka cause, and not mixed in with your personal funds.
יו”ד סרמ”ט ס”ו ,סרנ”ט ס”א. אהבת חסד (להחפץ חיים) פי”ח. שו”ת שבה”ל ח”ט סר”א.