Definition
Down payment assistance programs help borrowers cover down payments and closing costs through government agencies, nonprofits, and employers. Assistance may be grants (non-repayable), loans, or forgivable loans. Terms vary widely across programs.
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Common programs include state and local housing finance agencies, nonprofit organizations, and employer assistance programs. Some programs target first-time homebuyers, low-to-moderate income households, or specific professions (teachers, healthcare workers). Terms vary widely.
Pro Tip
Research down payment assistance programs in your state and local area early; many have income limits and specific eligibility requirements.
Example
A first-time buyer qualifies for a state DPA program providing a $15,000 grant for down payment on a home under $300,000, reducing cash needed from 20% to 15%.