Down Payment Assistance

Down payment assistance (DPA) programs are offered by the government, non-profit organizations, or employers in the form of a grant or a second mortgage loan to make homeownership attainable for those who may need help with funding a down payment for a home purchase.

The amount of money that you can receive from a down payment assistance program varies by program. For example, the NC 1st Home Advantage Mortgage™ offers $8K in down payment assistance while The Florida Assist DPA program offers up to $10K in down payment assistance for home buyers. Although the amount of down payment assistance may differ by program, most programs range between 2-5% of the sales price of the home.

No, once you submit your Quickstart application, your loan officer will be able to determine if you’re eligible for a down payment assistance program and can apply for that program on your behalf.

In some cases, DPA programs require the buyer to take a home buyer education course to learn more about the program and the home buying process. The courses are designed to empower first-time buyers with the knowledge they need to complete a successful home purchase. Your loan officer will give you all of the information you will need to sign-up and complete the course.

Yes, down payment assistance can come in the form of a grant, second mortgage loans, forgivable loans, and deferred payment loans. Grants do not have to be repaid. A second mortgage loan will offer you additional financing to cover your down payment. Forgivable loans do not require payback provided you stay in your home for a set amount of time, and deferred payment loans do not require repayment right away.

Down payment assistance can come in the form of a loan, but in some cases, it is given as a grant. Down payment assistance loans can provide additional financing upfront, they can be deferred for a period of time, or they can be forgiven. Talk to your loan officer to determine which type of down payment assistance will work best in your situation.

Yes, The US Department of Housing and Urban Development (HUD) offers a variety of government assistance programs designed to encourage homeownership. Learn more about the home buying assistance programs in your state here.

The minimum down payment required to purchase a house will depend on the loan program that the buyer uses to finance their home. Some loan programs like USDA and VA loans do not require a down payment. There are also low down payment loan programs offered by Fannie Mae and Freddie Mac that will allow a down payment as low as 3%. FHA loans also have low down payment requirements allowing buyers to purchase with a down payment as low as 3.5%.

According to the 2022 NAR Home Buyers and Sellers Generational Trends Report, the average down payment among all buyers was around 13%. The average down payment among home buyers appears to increase depending on the buyer’s age. For example, the average down payment for buyers between the ages of 23-31 is around 8% down. In contrast, the average home down payment for buyers between the ages of 57-66 is around 21% down.

There are down payment assistance (DPA) options that are specific to first-time home buyers. Some DPA programs are designated for first-time home buyers only while others are primarily to help all buyers obtain homeownership.

In most cases, down payment assistance programs are intended for first-time buyers only, but there may be occasional exceptions (like the Cheona Fund DPA program). Talk with your loan officer to determine if the program you’re interested in is exclusive to first-time home buyers.

Most of us would assume that a first-time buyer is anyone who has never owned a home. However, HUD defines a first-time buyer as anyone who has not owned a home for 3 years or more. That means, If you haven’t owned a home in 3 years, you would be eligible for first-time home buyer programs.

It is possible to buy a house with no money down, and there are several ways to make this happen. For instance, a buyer could use a loan program that doesn’t require a down payment like a USDA or VA loan. It’s also possible to obtain down payment assistance to cover the cost of your down payment.

We do not advise getting a personal loan to cover a down payment for your home. However, a down payment assistance loan could be a possibility. Down payment assistance loans can come in the form of a forgivable loan or a deferred payment loan.

Yes, down payment assistance can be used to cover closing costs. It’s best to defer to your down payment assistance provider’s guidelines to ensure that this is an option. However, most DPA programs will allow you to use the funds for your down payment and/or closing costs.

An obvious pro of down payment assistance is the option to get the funding you need to buy a home without having to wait to save for a down payment. A con of down payment assistance is that it’s not available to everyone. Most down payment assistance programs have set income limits, and some (but not all) are exclusive to first-time home buyers.

Down payment assistance eligibility varies depending on the guidelines set by the organization that is offering the down payment assistance program. The best way to determine if you qualify for down payment assistance is to explore DPA program options with your loan officer. They will help you research DPA options that match your unique financial situation, introduce you to the qualification requirements, and help you move forward with your application.

Qualification requirements for DPA programs (including your credit score) will vary from state to state. Most down payment assistance programs will require a minimum credit score in the range of 620-640. However, it’s important to talk with your loan officer to review the specific guidelines for the program that you have in mind.

Yes, most down payment assistance programs have household income limits. The income limits are set to ensure that the buyers are not earning an above-average income to keep the funds reserved for low to moderate-income buyers. The income limits are set according to the median income for the area in which the home is located.

Down payment assistance guidelines will depend on the program requirements set by each down payment assistance provider. For example, the NC 1st Home Advantage Down Payment in North Carolina does have sales price limits. However, the NC Home Advantage program does not. Check with a licensed loan officer in your state to determine if there’s a limit to the home purchase price for your preferred down payment assistance program.

No, down payment assistance programs are for primary residences only. If you plan to use the home as a rental property or vacation home, your purchase would not qualify for down payment assistance.

No, you cannot use a down payment assistance program to purchase an investment property. DPA programs are designed to help home buyers that plan to use their home as a primary residence.

Yes, down payment assistance can be used in conjunction with an FHA loan. While the FHA doesn’t offer down payment assistance, you are welcome to apply for a down payment assistance program to use to support your FHA home purchase. The US Department of Housing and Urban Development (HUD) has a list of DPA programs offered in each state on its website that will pair nicely with an FHA loan.

Yes, down payment assistance can be paired with a conventional loan. DPA can even be paired with a 3% down conventional loan. Learn more about using down payment assistance with Fannie Mae and Freddie Mac conventional mortgage options.

Down payment assistance is not usually necessary with a USDA loan because USDA offers 100% financing. However, if you’re eligible for a down payment assistance program that will allow closing cost coverage, you can use the financial assistance toward closing cost expenses.

Similar to a USDA loan, VA loans offer active-duty military, veterans, and surviving spouses the option to finance a home with no money down. Therefore, down payment assistance is often overlooked by VA buyers. If you do qualify for a DPA program that offers closing cost assistance as an option, you can use the financial assistance to cover closing cost expenses. Check out this video to learn more.

Yes, all 50 US states have down payment assistance programs for future home buyers. The guidelines and requirements for DPA (credit score, DTI, income limits, sales price limits) will vary by state. Your loan officer can help you research what programs are available in your home state, and help you determine if you’re eligible. Learn more about down payment assistance programs in Florida, North Carolina, Maryland, Texas, and Virginia.

The Virginia Housing Development Authority (VHDA) offers several forms of down payment assistance for Virginia home buyers. Visit our blog to learn more about VHDA programs.

The North Carolina Housing Finance Agency (NCHFA) offers down payment assistance to NC residents. Visit our blog to learn more about NC down payment assistance offerings.

The Florida Housing Finance Corporation (FHFC) makes housing attainable with a variety of down payment assistance programs for buyers in the sunshine state! Visit our blog to learn more about down payment assistance in Florida.