Struggling with the down payment? Down payment assistance (DPA) programs exist in all 50 states — offering grants, forgivable loans, and deferred second mortgages to qualifying buyers.
Struggling with the down payment? Down payment assistance (DPA) programs exist in all 50 states — offering grants, forgivable loans, and deferred second mortgages to qualifying buyers.
DPA Programs — Overview
All 50 States
Grants, forgivable loans, deferred
2–5% of purchase price
Typically 80–120% AMI
Usually required
State HFA website
Types of Down Payment Assistance
Outright grants: Free money, never repaid. Typically 2–5% of purchase price. Most sought-after DPA. Income limits usually apply.
Forgivable second mortgages: Loans that are "forgiven" (canceled) if you stay in the home for a set period (3–10 years). If you sell or refinance early, you may repay a prorated amount.
Deferred second mortgages: No monthly payment. Balance due when you sell, refinance, or pay off the first mortgage. Some charge 0% interest.
Low-interest second mortgages: Small supplemental loans at 1–3% interest to bridge the gap to a required down payment.
Who Qualifies for DPA?
Requirements vary by program, but typical criteria: first-time buyer (no homeownership in 3 years), income below 80–120% of area median income (AMI), purchase price under program limits, primary residence only, completion of homebuyer education course (usually 6–8 hours online), credit score of 620+, and use of an approved first mortgage from the same state HFA.
Check HUD.gov's local homebuying programs: hud.gov/buying/localbuying
Ask your lender — many lenders are approved DPA partners and know all available programs
Contact a HUD-approved housing counselor (free) for personalized guidance
Major National DPA Programs
National Homebuyers Fund (NHF): Grants up to 5% in many states
USDA loans: 0% down (built-in DPA for rural/suburban homes)
VA loans: 0% down for veterans
Fannie Mae HomePath Ready Buyer: 3% closing cost assistance on HomePath properties
HUD Good Neighbor Next Door: 50% discount for teachers, law enforcement, firefighters, EMTs
Frequently Asked Questions
It depends on the type. Outright grants are never repaid. Forgivable second mortgages are forgiven after a set occupancy period (typically 3–10 years). Deferred second mortgages are repaid when you sell or refinance. Read your specific program terms carefully before assuming all DPA is free money.
Yes — most DPA programs are designed to work alongside specific first mortgage products, typically from the same state HFA. You often must use the HFA's first mortgage (which may be at below-market rates) to access their DPA. Some DPA programs are compatible with FHA, conventional, VA, or USDA first mortgages from any lender.
Disclaimer: Smart Mortgage Guide provides educational content only. We are not a licensed mortgage lender, broker, or financial advisor. Rates, limits, and program details are subject to change. Always consult with a licensed mortgage professional before making financial decisions.