How Down Payment Assistance Programs Actually Work

Short answer: Down Payment Assistance (DPA) programs provide funds — as grants, forgivable loans, or low-interest second loans — to help qualifying buyers cover their down payment and sometimes closing costs.

The common structures

• Grants: funds that don’t need to be repaid, often tied to income limits or first-time buyer status
• Forgivable second loans: a second loan that’s forgiven after living in the home for a set number of years
• Repayable second loans: a low- or zero-interest loan that’s repaid alongside or after your primary mortgage

Who typically qualifies

Requirements vary by program, but common criteria include income limits (often tied to the area’s median income), being a first-time buyer (sometimes defined as not having owned a home in the past 3 years, not necessarily ever), completing a homebuyer education course, and purchasing within specific geographic areas.

Combining DPA with your mortgage

Down Payment Assistance is layered on top of a primary mortgage (conventional, FHA, etc.), not a replacement for it. Not every loan program is compatible with every DPA program, so it’s worth confirming the combination works for your specific situation before you get too far into house-hunting.

See if you qualify

Talk to us about Down Payment Assistance — we’ll tell you honestly whether it’s a fit for your situation.