Key takeaways

  • Down payment assistance (DPA) programs provide homebuyers with loans or grants to help cover the down payment and closing costs.
  • These programs are typically reserved for first-time homebuyers or buyers with lower to moderate incomes for their area.
  • Many down payment assistance programs are available through state housing finance agencies. Some major cities, nonprofits and even mortgage lenders administer their own programs, as well.

One-fifth of aspiring homeowners (20 percent) believe they’ll never be able to save enough for a down payment, according to Bankrate’s Down Payment Survey. You don’t have to rely solely on savings to buy a home, however. There are many forms of down payment assistance, in varying amounts, that could help you bridge the gap. Here’s a guide to your options and how to qualify.

What is a down payment assistance (DPA) program?

Down payment assistance (DPA) programs are loans and grants designed to provide homebuyers with money to help them pay for a down payment. Some programs also help with closing costs.

There are thousands of down payment assistance programs nationwide. While a few programs exist at the federal level and even with some individual mortgage lenders, most down payment help is offered at the local level through state, county and city government programs.

Down payment assistance eligibility requirements

Most down payment assistance is geared toward first-time homebuyers or buyers with lower to moderate incomes. In this case, a first-time homebuyer is someone who hasn’t ever owned a home or hasn’t owned a home in the past three years.

These programs are specifically for buyers of primary residences, not investment or rental properties. Depending on the program, you might be able to buy a single-family home, condo, townhome, a home in a planned unit development (PUD) or a multifamily property up to four units, provided you live in one of those units.Whether you’re a first-time or repeat buyer, the programs are typically limited to those whose incomes fall below a certain threshold, known as the area median income (AMI). These cut-offs vary widely by location and program. In some cases, the assistance is only available to borrowers buying in specific counties or cities, or borrowers with specific backgrounds, like working in a public service profession.

Virtually every down payment program requires you to qualify for a 30-year, fixed-rate first mortgage to buy the home. Some programs can only be used with one type of mortgage, such as government-backed loans.

If you’re getting down payment assistance through a state housing finance agency (HFA), you’ll be required to pair it with a first mortgage through one of the HFA’s partner lenders.

Lastly: There can be credit and financial qualifying criteria. Along with needing to qualify for the first mortgage, you might need to meet a credit score minimum, for example, or contribute some of your own savings to the home purchase. Most programs require you to complete a homebuyer education course prior to closing, too.

Types of down payment assistance loans and programs


A homebuyer grant is a type of down payment assistance that provides a one-time cash sum, often in the form of a no-interest second mortgage. The funds don’t have to be repaid. If you qualify, you can use the money to cover all or part of a down payment or closing costs.

Mortgage Questions
When you buy a home with a mortgage, that mortgage is the first or primary lien on the property. A second mortgage is an additional lien tied to your home. In the case of down payment assistance, you’ll obtain the second mortgage at the same time as the first mortgage.

Forgivable loans

A forgivable loan is technically a second mortgage, but effectively a grant because you don’t have to repay it if you meet certain requirements. Generally, these include paying your mortgage on time every month and staying in the home for a specific period, typically anywhere from three to 10 years. During this time, portions of the loan are forgiven in increments until it’s completely forgiven at the end of the period. If you decide to move before then, you’ll need to pay back the funds, prorated based on time in the home. If you adhere to the requirements, you won’t have to pay the loan back at all.

Low-interest loans

This type of home down payment assistance also functions as a second mortgage, but with a more affordable interest rate. Along with paying   monthly payments for the first mortgage, you’ll repay the low-interest loan, typically over a few years. This payment includes the down payment assistance amount plus interest.

Deferred-payment loans

Unlike a low-interest loan, a deferred-payment loan usually doesn’t charge interest. You’ll still need to repay the assistance, but not until the loan’s term ends, you move house or refinance your first mortgage.

Individual Development Accounts (IDAs)

Also called a matched savings account, an Individual Development Account (IDA) is a special savings account through which the account holder’s contributions are matched by private or public money. These programs typically come with strict income caps and employment requirements, and participants usually need to complete free financial literacy training, as well. These accounts are available for many types of savings goals, including a down payment and closing costs.

Lender down payment assistance programs

Some mortgage lenders offer their own down payment assistance to eligible borrowers. Bank of America, Chase and Wells Fargo, for example, offer down payment and closing cost grants. Other lenders offer matched savings opportunities. The key here: You’ll need to get your mortgage from that lender, which might mean you don’t get the lowest possible interest rate.

How to find down payment assistance

There are many ways to find down payment assistance:

  1. Your state’s HFA: Every state runs an HFA that helps homeowners and renters. Contact your state’s HFA or visit its website to learn what down payment assistance options you might be eligible for.
  2. Your city or county website: Many counties and cities offer down payment assistance. Check your municipality’s website for more.
  3. HUD: Check the U.S. Department of Housing and Urban Development’s (HUD) website for local homebuying programs by state.
  4. Your lender: Your loan officer can help point you to an assistance program.
  5. Down Payment Resource: Down Payment Resource, a private company, provides various resources for homebuyers, real estate agents and lenders, including an eligibility and assistance lookup tool.


  • You can apply down payment assistance to many different types of mortgages, including conventional, FHA, VA and USDA loans. Some programs pair specifically with one type of loan or have restrictions, so confirm with your loan officer before you apply.
  • Since programs are usually administered at the local level, the time it takes for them to disburse funds can vary widely. It’s best to start your research and applications as soon in the homebuying process as possible to give yourself as much time as you can.
  • This depends on many factors, including local government funding and the cost of homes in your area. In California and Washington, D.C., for example, some buyers might qualify for up to six figures for their down payment. Grants often come in much smaller amounts, such as $5,000.
  • Not everyone qualifies for down payment assistance programs. However, there are other forms of housing help you might qualify for. Visit, select your state and click “Learn About Homeownership.” From there, you can find ways to avoid foreclosure, find home counseling services and see if you qualify for home renovation or repair funds. Depending on where you live and your needs, you might find housing resources geared toward seniors, disaster relief and help to pay utility bills.
  • Generally, yes, you can use multiple sources of down payment assistance, provided you qualify. Check with your lender to ensure you’re obtaining a mortgage through a program that allows for more than one source of assistance.
  • Simply put, down payment assistance programs help drive homeownership, which itself helps build positive outcomes for individuals and their communities, including stability and wealth-building opportunities.
  • With their long list of requirements, it might be harder to qualify for a down payment assistance program. In addition, depending on the program, you’ll pay more with a low-interest loan, or be subject to staying in your home for a certain number of years.