Also written as:
DPA
State, local, or lender programs that help cover your down payment and/or closing costs. Often forgivable grants for first-time buyers below income limits.
Down Payment Assistance — DPA — is one of the most underused tools in homebuying. State housing finance agencies, local governments, employers, and some lenders offer programs that cover part or all of your down payment and/or closing costs.
DPA comes in several flavors. Grants never have to be repaid. Forgivable second mortgages are loans that are forgiven if you stay in the home for a set time (often 5–10 years). Deferred-payment loans sit silently until you sell or refinance, then get repaid. Repayable second mortgages are paid alongside your first mortgage.
Most DPA programs target first-time buyers (or buyers who haven't owned in 3 years) with income at or below the area's median. Many require a homebuyer education course. Always check what's available in your state — the savings can be life-changing.
Example
A first-time buyer in Texas qualifies for TSAHC's down payment assistance: a forgivable second mortgage covering 5% of the home's price. On a $350K home, that's $17,500 — forgiven after 3 years of living in the home as a primary residence.
Also known as
DPA, down payment grant, homebuyer assistance, closing cost assistance
Source:
HUD State Resources