diff --git a/homeassistant/components/downloader.py b/homeassistant/components/downloader.py
index 6c1b53df059..f145fadfb71 100644
--- a/homeassistant/components/downloader.py
+++ b/homeassistant/components/downloader.py
@@ -44,6 +44,10 @@ def setup(hass, config):
 
     download_path = config[DOMAIN][CONF_DOWNLOAD_DIR]
 
+    # If path is relative, we assume relative to HASS config dir
+    if not os.path.isabs(download_path):
+        download_path = hass.config.path(download_path)
+
     if not os.path.isdir(download_path):
 
         logger.error(