Down Payment Assistance Programs

Down payment assistance (DPA) programs are designed to help eligible homebuyers cover some or all of the upfront costs of purchasing a home. These programs can make homeownership more accessible, especially for first-time buyers.

What Is Down Payment Assistance?

Down payment assistance provides financial help for expenses such as:

• Down payment

• Closing costs

• Prepaid property taxes or homeowners insurance (in some programs)

Depending on the program, the assistance may be:

• A grant that does not need to be repaid

• A low-interest loan

• A deferred-payment loan

• A forgivable loan if you meet certain occupancy requirements

Who May Qualify?

Eligibility varies by program, but common requirements include:

• First-time homebuyer status (some programs define this as not owning a home within the past three years)

• Income within program limits

• Minimum credit score

• Purchasing a primary residence

• Completion of a homebuyer education course

• Buying a home within the program's price limits

Common Types of Assistance

Grants

• No repayment required if program conditions are met.

• Often provided by state or local housing agencies.

Deferred-Payment Loans

• No monthly payments while you own and occupy the home.

• Repayment may be required when you sell, refinance, or move out.

Forgivable Loans

• A portion or all of the loan is forgiven after you meet requirements, such as living in the home for a specified number of years.

Low-Interest Second Mortgages

• Used alongside your primary mortgage.

• Repaid over time at a reduced interest rate.

Where to Find Assistance

Potential sources include:

• State housing finance agencies

• City and county housing departments

• Nonprofit housing organizations

• Employers offering homeownership benefits

• Mortgage lenders participating in assistance programs

Benefits of Down Payment Assistance

• Reduces upfront cash needed to buy a home

• Helps buyers qualify sooner

• Makes homeownership more affordable

• May reduce the need to deplete savings

• Can be combined with certain mortgage programs, depending on eligibility

Things to Consider

Before accepting assistance, review:

• Occupancy requirements

• Repayment conditions

• Income and purchase price limits

• Whether refinancing could trigger repayment

• Any restrictions on selling the home within a certain time period

Application Tips

• Check your credit score before applying.

• Gather income and financial documents.

• Complete any required homebuyer education course early.

• Compare multiple lenders that participate in assistance programs.

• Apply before making an offer if pre-approval is required.

Common Documents You'll Need

• ✔ Government-issued ID

• ✔ Recent pay stubs

• ✔ Tax returns

• ✔ Bank statements

• ✔ Employment verification

• ✔ Mortgage pre-approval

• ✔ Proof of program eligibility, if required

Pro Tip

Down payment assistance programs often have limited funding and may be offered on a first-come, first-served basis. If you're planning to buy a home, research available programs early and work with a lender familiar with these options to maximize your chances of qualifying.