Down Payment Assistance Programs
The down payment may be closer than you think
Down payment assistance (DPA) programs provide grants, forgivable second mortgages, or low-interest deferred loans to help buyers cover the upfront costs of homeownership. Available through state housing finance agencies, local governments, nonprofits, and lenders, these programs can cover all or part of the down payment and closing costs — sometimes stacking to dramatically reduce what you need to bring to the table.
2,000+
DPA programs active nationwide
$0
Down payment possible when stacked
3–5%
Typical DPA grant amount
Why choose this loan
Benefits of a Down Payment Assistance Programs
Grants that never have to be repaid
True grant programs — offered by some state agencies and lenders — provide down payment funds with no repayment requirement whatsoever. Eligibility is typically tied to income, purchase price, and first-time buyer status.
Forgivable second mortgages
Forgivable second mortgage programs provide DPA as a silent second lien that is forgiven — typically at a rate of 20% per year — after you live in the home for a set period (often 5 years). Move or sell before then and a prorated portion must be repaid.
Deferred second mortgages with 0% interest
Many programs offer a zero-interest deferred second mortgage that isn't due until you sell, refinance, or pay off the first mortgage. This gets you into the home without monthly payments on the assistance amount.
Stackable with first-mortgage products
DPA can typically be layered onto FHA loans (3.5% first + DPA for closing costs), conventional 3% down programs (HomeReady/Home Possible), VA loans, and USDA loans — dramatically reducing or eliminating your cash-to-close requirement.
Eligibility
Do you qualify?
Typical guidelines for a Down Payment Assistance Programs. Final eligibility is determined during underwriting.
- Income limits: most programs cap household income at 80–120% of area median income (AMI); some go higher
- Purchase price limits: property must be below the program's maximum acquisition cost (varies by county)
- First-time buyer: many programs define this as 'no ownership interest in a primary residence in the last 3 years'
- Homebuyer education course: typically a 4–8 hour online or in-person HUD-approved course is required
- Minimum credit score: 620–640 typical; some FHA-layered programs go to 580
- Occupancy: all DPA programs require primary residence; investment properties are not eligible
Sample scenarios
Illustrative Down Payment Assistance Programs rates
First mortgage (FHA + DPA)
6.375%
Illustrative; first mortgage rate
DPA second mortgage rate
0–3%
Many programs offer 0% deferred second
Max DPA assistance (typical)
3–5%
Of purchase price; program-dependent
Rates shown are for illustrative purposes only, are not a quote or guarantee, and do not reflect a specific offer. Actual rates depend on credit score, loan amount, loan-to-value, occupancy, and other factors, and change daily. Contact us for a personalized rate quote.
How it works
Your path to approval
- 1
DPA program matching
We search our database of state, county, city, and lender-specific programs to find every DPA source you qualify for based on income, location, occupation, and loan type.
- 2
Homebuyer education completion
Most programs require a HUD-approved homebuyer education course. Many are available online in a few hours. We'll point you to the right resource to satisfy this requirement early.
- 3
Combined first and second mortgage application
We process your first mortgage and the DPA second mortgage simultaneously. You complete one application and we coordinate with the DPA program administrator on your behalf.
- 4
Close with minimal cash to close
At closing, the DPA funds are applied to your down payment and/or closing costs. In the best-case scenarios — especially with VA or USDA first mortgages — your out-of-pocket can approach zero.
DPA Structures Compared
| Grant | Forgivable 2nd | Deferred 0% 2nd | |
|---|---|---|---|
| Repayment | Never | Forgiven after ~5 yrs occupancy | Due at sale/refi |
| Monthly payment | None | None (silent lien) | None (deferred) |
| Best for | Long-term owners | 5+ year horizon | Buyers who may sell later |
| Availability | Less common | Most common DPA type | Very common |
Frequently asked questions
Do I have to be a first-time buyer to use DPA programs?
Many programs require first-time buyer status, which most programs define as not having owned a primary residence in the past three years — not literally never having owned. Some state and local programs have no first-time buyer requirement at all, particularly for targeted areas or specific occupations.
Can I use DPA with an FHA loan?
Yes. FHA loans are the most common first-mortgage pairing for DPA programs. The FHA first mortgage covers 96.5% of the purchase price, and the DPA second covers the 3.5% down payment and often some or all closing costs — potentially getting your cash-to-close very close to zero.
What happens if I sell my home before the DPA is forgiven?
For forgivable programs, selling or refinancing before the forgiveness period ends triggers repayment of the remaining balance — usually prorated. For example, a 5-year forgiveness program that forgives 20% per year would require you to repay 60% of the original amount if you sell in year 2.
Are there DPA programs for repeat buyers or higher incomes?
Yes. While most DPA programs target first-time buyers and moderate incomes, some state housing finance agencies offer assistance to repeat buyers in targeted areas. Additionally, employer-sponsored DPA programs exist for school district employees, healthcare workers, and municipal employees regardless of buyer history.
Ready to explore a Down Payment Assistance Programs?
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