Down Payment Assistance

Down Payment Assistance (DPA) is a program that helps homebuyers pay for the down payment and sometimes closing costs when buying a home.

It is usually offered by government agencies, nonprofits, or lenders to make homeownership more affordable—especially for first-time buyers.

When you buy a home, lenders usually require a down payment, which is a percentage of the home price.

Example:

• Home price: $700,000
  
• FHA down payment (3.5%): $24,500
   

A Down Payment Assistance program can help cover all or part of that $24,500 so the buyer doesn’t have to pay it fully out of pocket.

1. Grants (Free Money)

• No repayment required
   
• Often for first-time buyers
   
• Example: $10,000–$25,000 assistance
   

2. Forgivable Loans

• A second loan that is forgiven after a certain number of years (usually 3–10) if the buyer stays in the home.
   

3. Deferred Loans

• No monthly payment
   
• Paid back when the home is sold or refinanced.
   

Requirements vary by program, but usually include:

• Minimum credit score (around 620+)
   
• Income limits based on area
   
• Must live in the home as a primary residence
   
• Often must complete a homebuyer education course.
   

Many programs provide 3%–5% of the purchase price.

Example:

• $800,000 home
   
• 5% assistance = $40,000 toward down payment and closing costs.
   

Down Payment Assistance helps buyers:

• Buy a home sooner
   
• Reduce cash needed upfront
   
• Compete in expensive markets like Southern California.