Down payment assistance (DPA) programs help buyers, usually first-time buyers with moderate incomes, cover the down payment and sometimes closing costs. They come as grants, forgivable loans or low-interest second mortgages, run mostly by state housing finance agencies, cities and counties. Most have income limits, price limits and a homebuyer education requirement.
Types of assistance
| Type | How it works |
|---|---|
| Grant | Free money you never repay, though some must be repaid if you sell or refinance very soon. |
| Forgivable loan | A second mortgage with no payments that’s forgiven a little each year you live in the home, often over 5 to 10 years. |
| Deferred loan | No payments until you sell, refinance or pay off the first mortgage; then you repay it. |
| Repayable second mortgage | A small loan with its own monthly payment, usually at a low rate. |
You can also browse assistance programs state by state.
Who usually qualifies
- First-time buyers, typically meaning you haven’t owned a home in the past three years. Some programs waive this for veterans or in targeted areas.
- Income limits, often set as a share of the area median income, so they’re higher in expensive areas.
- Price limits on the home you buy.
- A homebuyer education course, often online, taking a few hours.
- A minimum credit score, commonly around 620 to 660, and sometimes a small contribution of your own money.
- Living in the home as your primary residence.
The trade-offs
Assistance often requires using the program’s first mortgage or an approved lender, and the rate can be slightly higher than market. Funding is limited, and popular programs can run out for the year. A second mortgage also adds to what you owe. Compare the total cost, including any rate difference, with compare mortgage offers.
If you might sell within a few years, read the repayment terms closely: forgivable loans usually must be repaid in full or in part if you sell before they’re forgiven.
How to apply
- Find programs in your state and city with the finder and your state housing finance agency’s website.
- Find a lender approved for the program; the agency lists them.
- Take the homebuyer education course early.
- Get pre-approved with the assistance included, so your offers reflect it.
Other help to ask about
- Employer programs: some employers, hospitals and universities offer homebuying help.
- Seller concessions: the seller can pay part of your closing costs; see the seller concessions calculator.
- Lender credits: some lenders cover part of closing costs in exchange for a slightly higher rate.
Then update your plan with the down payment timeline: assistance can move your purchase date up by a year or more.
Common questions
Do I have to repay down payment assistance?
It depends. Grants usually don’t need repaying; forgivable loans are forgiven over time if you stay in the home; deferred loans are repaid when you sell or refinance.
Can I get assistance if I’m not a first-time buyer?
Some programs allow repeat buyers, especially in targeted areas or for veterans. Many count you as first-time if you haven’t owned in three years.
Can I combine assistance with an FHA loan?
Often yes. Many state programs work with FHA, conventional, VA and USDA loans through approved lenders.
Updated October 2026. Educational content. OfferBacked is not currently a lender and doesn’t issue pre-approvals or loans.