Quick Answer
Down payment assistance (DPA) programs help homebuyers cover their down payment and closing costs. Assistance comes in four forms: grants (free money), forgivable loans, deferred loans, and low-interest second mortgages. You apply through a participating lender, not directly to the program. Every state has DPA programs, and many buyers qualify for more than they expect. Check your eligibility here.
What Is Down Payment Assistance?
Down payment assistance refers to any program that helps a homebuyer cover their down payment, closing costs, or both. These programs are funded and administered by state housing finance agencies, local governments (cities and counties), nonprofit organizations, and in some cases employers.
The concept is straightforward. Buying a home requires upfront cash. On a $400,000 home with a 3.5% FHA down payment, you need $14,000 before you even factor in closing costs. DPA programs bridge that gap so buyers who can afford monthly mortgage payments but lack savings for the upfront costs can still purchase a home.
There are 1,926+ DPA programs operating across the United States right now. Every single state has at least one program, and most states have dozens. The money comes from government housing trust funds, tax-exempt bond programs, federal HOME and CDBG allocations, and nonprofit fundraising. The total dollars flowing through these programs each year runs into the billions.
Despite this, most homebuyers have never heard of DPA. Or they've heard of it and assume they don't qualify. Both are problems worth fixing.
The 4 Types of Down Payment Assistance
Not all DPA is structured the same way. Understanding the four types is the most important step in evaluating your options, because the type of assistance determines what you owe later.
1. Grants: Free Money, No Repayment
How it works:
You receive money that never needs to be repaid. No second lien on your property, no repayment trigger, no strings attached beyond meeting the initial eligibility requirements.
Grants are the best type of DPA from the buyer's perspective. The money is yours. You don't repay it when you sell. You don't repay it when you refinance. It's a true gift.
Examples include the TSAHC (Texas State Affordable Housing Corporation) grant programs, the GSFA Platinum gift component in California, and numerous local city and county grant programs. Grant amounts tend to be smaller than loan-based DPA, typically ranging from $5,000 to $25,000, though some programs offer more.
2. Forgivable Loans: Forgiven After 3-10 Years
How it works:
You receive a second mortgage that is forgiven after a set residency period, typically 3 to 10 years. If you sell, refinance, or move out before that period ends, you repay some or all of the balance.
Forgivable loans are extremely popular because they function like a grant if you stay in the home long enough. The forgiveness clock starts at closing and counts down automatically. No action required on your part.
Examples include the CalHFA Forgivable Equity Builder Loan (FEBL) in California, the Houston Homebuyer Assistance Program (HAP), and the Chenoa Fund offered nationwide through CBC Mortgage Agency. Forgiveness periods vary. The Chenoa Fund Rate Advantage forgives after just 36 on-time mortgage payments. Some state programs require 5 to 10 years of continuous residency.
The key question with forgivable loans: what happens if you sell or refinance early? Most programs require full repayment of the remaining balance if you trigger a repayment event before the forgiveness period ends. Some programs reduce the balance proportionally each year (for example, 20% forgiven per year over 5 years). Read the terms carefully.
3. Deferred Loans (Silent Seconds): Repaid When You Sell or Refinance
How it works:
You receive a second mortgage with 0% interest and no monthly payments. The full balance is due when you sell, refinance, or pay off the first mortgage. Until then, you owe nothing.
Deferred loans, sometimes called "silent seconds," are the most common type of DPA nationally. They don't cost you anything month to month. The tradeoff is that the full balance sits on your title as a second lien until a repayment event occurs.
Examples include CalHFA MyHome in California, FL Assist in Florida, and many state housing finance agency programs across the country. Some deferred loans carry simple interest (CalHFA MyHome charges 1%), while many are truly 0% interest.
For buyers who plan to stay in their home for 7+ years, deferred loans are an excellent deal. You get to buy now with minimal upfront cost, and the repayment doesn't come due until you sell (at which point you're using sale proceeds to cover it) or refinance.
4. Low-Interest Second Mortgages: Below-Market Monthly Payments
How it works:
You receive a second mortgage at a below-market interest rate with monthly payments. Less common than the other three types but still used by several programs.
This is the least favorable type of DPA for most buyers because it adds a monthly payment. However, the rates are well below market, and these programs can still save you thousands compared to no assistance at all. The GSFA Platinum Standard in California uses this model, offering up to 5% as a repayable 15-year second mortgage at a competitive rate.
| Type | Monthly Cost | Repayment | Best For |
|---|---|---|---|
| Grant | $0 | Never | All buyers who qualify |
| Forgivable Loan | $0 | Forgiven after 3-10 years | Buyers planning to stay 3+ years |
| Deferred Loan | $0 | When you sell/refinance/pay off | Long-term homeowners |
| Low-Interest 2nd | Small payment | Monthly over 10-15 years | Buyers wanting max $ amount |
Who Offers Down Payment Assistance?
DPA programs come from four main sources, and each operates differently.
State Housing Finance Agencies (HFAs). Every state has one. CalHFA in California, TSAHC and TDHCA in Texas, FHFC in Florida, IHDA in Illinois. These agencies run the largest and most widely available programs. They set statewide income limits and work through networks of approved lenders. State programs typically offer $10,000 to $50,000 in assistance, sometimes more.
Local Governments. Cities and counties run their own DPA programs using federal and local housing funds. These tend to offer the largest dollar amounts (Los Angeles offers up to $161,000; Houston and Miami have programs exceeding $50,000) but are restricted to properties within specific city or county boundaries. Availability depends on annual funding allocations, so some local programs open and close periodically.
Nonprofit Organizations. The Chenoa Fund (operated by CBC Mortgage Agency) is the most prominent nationwide example. Nonprofits fill gaps that government programs don't cover, often serving buyers with lower credit scores or those who don't meet state program requirements. Nonprofit programs may have different cost structures, so compare the total loan cost carefully.
Employers. Some large employers, hospitals, universities, and government agencies offer DPA to their employees as a recruitment and retention benefit. These are less standardized but can be very favorable when available.
Who Qualifies for Down Payment Assistance?
Eligibility requirements vary by program, but most DPA programs evaluate the same set of criteria. Here is what you'll encounter.
Income limits. Most programs cap household income based on the Area Median Income (AMI) for your county. Common thresholds are 80% AMI (low income), 120% AMI (moderate income), and 150% AMI or higher. In high-cost areas, these limits can be surprisingly generous. A household earning $180,000+ can qualify for programs in parts of California, New York, and other expensive markets. Some programs, like the Chenoa Fund, have no income limits at all.
Credit score. Minimum requirements range from 580 to 680 depending on the program. Most programs cluster in the 620-660 range. If your credit score is 640 or above, you'll have access to the majority of programs in your state. Buyers with scores between 580 and 620 have fewer but still meaningful options.
First-time buyer status. Many programs require you to be a "first-time" homebuyer, but this definition is broader than you might think. Under most program guidelines, anyone who has not owned a home in the past 3 years qualifies as first-time. Veterans are often exempt from this requirement entirely. And a growing number of programs in 2026, like Florida's Hometown Heroes, are open to repeat buyers.
Homebuyer education. Most programs require completing a homebuyer education course. These are typically available online, take 4-8 hours, and are offered by HUD-approved counseling agencies. Some programs accept online courses; others require in-person sessions. Plan to complete this early in your homebuying process.
Property location. State programs cover the entire state. Local programs are restricted to specific cities or counties. Some programs target specific census tracts or "targeted areas" within a broader geography. The property must be your primary residence (owner-occupied), not an investment property or second home.
Occupation-based programs. A growing trend in 2026 is programs restricted to specific professions. Florida's Hometown Heroes program serves teachers, nurses, law enforcement, firefighters, military, and other essential workers. Several states have similar occupation-targeted programs with favorable terms.
How Much Down Payment Assistance Can You Get?
Assistance amounts vary widely by program type and location. Here is what to expect in 2026.
Typical Range
$10,000 to $50,000
Percentage-Based Programs
3.5% to 5.5% of loan
Large Local Programs
$50,000 to $150,000+
Small Local Grants
$5,000 to $15,000
Percentage-based programs calculate assistance as a percentage of the first mortgage amount. On a $400,000 loan, 3.5% DPA equals $14,000 and 5% equals $20,000. These programs are offered by state HFAs and nationwide nonprofits.
Dollar-amount programs set a fixed maximum. These are more common among local government programs. Cities with high housing costs tend to offer the most: Los Angeles ($161,000), CalHFA Dream For All ($150,000), and Houston ($50,000+) are examples of large-dollar programs.
In most cases, DPA can be applied to both the down payment and closing costs. Some programs explicitly separate the two, offering one source for the down payment and another for closing costs. Others let you allocate the funds however you need them.
How to Apply for Down Payment Assistance
This is where most buyers get confused. You do not apply directly to the DPA program. You apply through a participating lender.
Here is the process, step by step.
Check your eligibility
Use a tool like Down Payment Scout to see which programs are available based on your location, income, and purchase price. This takes about 2 minutes.
Find a participating lender
Your lender must be approved by the specific DPA program you want to use. Not every lender is approved for every program. This is the single most important step. Working with a lender who is not program-approved means you cannot access that program.
Get pre-approved with DPA included
Your lender evaluates your income, credit, and the programs you qualify for. You'll know your total purchasing power before you start shopping for homes.
Complete homebuyer education (if required)
Most programs require a homebuyer education course. Completing this early keeps you on track and avoids closing delays.
Close on your home
The DPA processes alongside your regular mortgage. In most cases, there is no separate DPA application. The lender handles the program paperwork as part of your loan file. Closing typically takes 30-45 days from an accepted offer, with DPA adding 0-2 weeks.
The biggest mistake buyers make is waiting until they find a home to start researching DPA. By that point, you may not have time to find the right lender, complete homebuyer education, or switch to a program with better terms. Start the DPA conversation early, ideally 60-90 days before you plan to make an offer.
State-by-State Overview
Every state runs DPA programs through its housing finance agency, and most states also have local programs at the city and county level. Here is a snapshot of the three largest states by population.
California
CalHFA runs the state's largest programs, including MyHome (deferred, up to 3.5%), Dream For All (up to $150,000), and the Forgivable Equity Builder Loan. GSFA Platinum and Chenoa Fund provide additional statewide options. Over 160 local programs from cities like Los Angeles, San Diego, and Sacramento add to the mix.
Texas
Texas has two state agencies offering DPA: TSAHC (grants and forgivable loans) and TDHCA (My First Texas Home, My Choice Texas Home). TSAHC's grant programs are among the most generous in the country, providing 5% of the loan amount as a true grant. Local programs from Houston, San Antonio, Dallas, and other cities provide additional funding.
Florida
FHFC (Florida Housing Finance Corporation) runs several statewide programs, including FL Assist (deferred second mortgage), the Salary Connect program, and the Hometown Heroes program for essential workers like teachers, nurses, and first responders. Hometown Heroes has become one of the most popular occupation-based programs in the country, offering up to 5% of the loan amount as a forgivable loan.
For a complete directory of programs in all 50 states, visit our state-by-state DPA index.
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DPA Trends in 2026
The DPA landscape shifts every year as new programs launch, existing programs update their terms, and funding levels change. Here is what's notable in 2026.
More occupation-restricted programs. Following the success of Florida's Hometown Heroes, multiple states have launched or expanded programs targeting specific professions. Teachers, nurses, law enforcement, firefighters, and military service members are the most common eligible occupations. These programs often offer more favorable terms than general-population programs.
Larger local programs. Cities facing housing affordability crises have increased DPA dollar amounts significantly. Programs offering $50,000 to $150,000+ are no longer unusual in high-cost markets. This trend is driven by the widening gap between home prices and the savings most buyers can accumulate.
Shift toward grants over loans. Several states have added or expanded grant programs, recognizing that grants remove the repayment complexity that can discourage participation. TSAHC in Texas and several new city-level programs nationwide have moved in this direction.
Income limits are increasing. As home prices rise, programs have raised income limits to serve moderate-income buyers who are locked out of homeownership. Programs with limits at 150% AMI or higher are increasingly common, especially in states with high housing costs.
Common Myths About Down Payment Assistance
Misinformation keeps eligible buyers from using programs that could help them. Here are the most persistent myths and the reality behind each one.
DPA is only for low-income buyers
Reality: Many programs set income limits at 120% to 150% or more of the Area Median Income. In high-cost counties, households earning $150,000+ can qualify. Some programs have no income limits at all.
DPA means a bad interest rate
Reality: Some statewide programs do carry a slightly higher rate on the first mortgage. However, many local programs and grants layer on top of a standard-rate first mortgage with no rate increase. The cost structure varies significantly by program.
You have to pay it all back
Reality: Grants are never repaid. Forgivable loans are forgiven after 3-10 years of residency. Even deferred loans have no monthly payments and are only repaid from sale proceeds.
DPA takes forever and slows down closing
Reality: DPA processes alongside your regular mortgage. Most programs add 0-2 weeks to the standard closing timeline. With an experienced lender, many DPA-assisted purchases close in 30-45 days from an accepted offer.
There aren't any programs in my state
Reality: Every single state has DPA programs. Most states have dozens. 1,926+ programs operate nationwide as of 2026. The challenge is not finding a program; it's finding the right one for your situation.
You need perfect credit for DPA
Reality: Some programs accept credit scores as low as 580. Most require 620-660. If your score is 640+, you likely qualify for multiple programs in your state.
Frequently Asked Questions
What is down payment assistance?
Down payment assistance (DPA) refers to programs that help homebuyers cover their down payment and/or closing costs. These programs are offered by state housing finance agencies, local governments, and nonprofits. 1,926+ DPA programs exist nationwide, and every state has at least one. Assistance comes in four forms: grants, forgivable loans, deferred loans, and low-interest second mortgages.
Do I have to pay back down payment assistance?
It depends on the type of program. Grants never need to be repaid. Forgivable loans are forgiven after 3-10 years of living in the home. Deferred loans are repaid only when you sell, refinance, or pay off the mortgage. Low-interest second mortgages have monthly payments but at below-market rates. Many buyers use grants or forgivable loans and never repay anything.
Is down payment assistance only for low-income buyers?
No. This is one of the most common misconceptions. Many programs set income limits at 120% to 150% or more of the Area Median Income. In high-cost areas, households earning $150,000+ can qualify. Some programs have no income limits at all.
How much down payment assistance can I get?
Amounts range from $5,000 to over $150,000 depending on the program and location. Typical assistance falls between $10,000 and $50,000. Many programs calculate assistance as a percentage of the loan amount, commonly 3.5% to 5.5%. Local programs in high-cost cities often offer the largest dollar amounts.
Do I have to be a first-time homebuyer to get DPA?
Not necessarily. While many programs target first-time buyers, several are open to repeat buyers. The definition of "first-time buyer" is also broader than most people expect: anyone who has not owned a home in the past 3 years qualifies under most program guidelines. Veterans and buyers in targeted areas are often exempt from this requirement.
How do I apply for down payment assistance?
You apply through a participating lender, not directly to the program. Your mortgage lender must be approved by the specific DPA program you want to use. The DPA application processes alongside your regular mortgage, adding 0-2 weeks to closing. Start by checking which programs you qualify for, then find a lender approved to originate loans with those programs.
Does down payment assistance mean a higher interest rate?
Sometimes, but not always. Some statewide DPA programs carry a slightly higher rate on the first mortgage. However, many local government programs and grants layer on top of standard-rate first mortgages with no rate increase. The cost structure varies by program, so comparing options is important.
Does down payment assistance slow down closing?
In most cases, no. DPA processes alongside your regular mortgage application. Most programs add 0-2 weeks to the standard timeline. There is usually no separate application. The key is working with a lender experienced in DPA who can manage the process efficiently from the start.
What credit score do I need for down payment assistance?
Requirements vary by program. Some accept scores as low as 580. Most require a minimum of 620-660. A few programs require 680+. If your score is 620 or above, you likely qualify for multiple programs in your state.
Can I use down payment assistance with an FHA loan?
Yes. Most DPA programs are designed to work with FHA loans, which require only a 3.5% down payment. DPA can cover that 3.5% plus closing costs. Many programs also work with conventional, VA, and USDA loans. Check with your lender about compatibility with the specific programs you are considering.
Find Out Which Programs You Qualify For
Every buyer's situation is different. Your state, county, income, credit score, and profession all determine which programs you can access. Our free tool matches you with available programs in about 2 minutes. No signup, no email required.
Check Your DPA Eligibility
Enter your location, income, and home price. We'll show you every down payment assistance program available to you, including grants, forgivable loans, and deferred loans.
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