More than 2,000 down payment assistance programs operate across the United States, and they are not the same product. Some hand you money you never repay. Some forgive a lien over time. Some defer repayment until you sell. Some match what you save. The structure determines whether the help costs you anything, and most buyers accept an offer without knowing which kind they’ve been given.

That distinction matters more in October 2026 than it did a year ago. The Federal Reserve raised its benchmark in September, its first increase in three years, pushing financing costs higher nationwide. home buying assistance programs don’t move with the Fed, so a fixed award covers the same share of your closing costs today as it did in the spring, while everything else got more expensive.

This DPA guide explains how each structure works, what triggers repayment, and which questions to ask before accepting any offer.

The Four Types of Down Payment Assistance Programs

1. Grants. Money you never repay, with no lien attached. The cleanest form and the rarest — typically $2,500 to $15,000. Because nothing comes back to the administering agency, grant funding runs out fastest and often closes mid-year.

2. Forgivable second mortgages. The most common structure. You receive a zero-interest second lien with no monthly payment, forgiven entirely after a set occupancy period — commonly five to ten years, sometimes forgiving incrementally at 10% or 20% per year. The trap is that the clock runs on occupancy, not ownership. Converting the home to a rental can trigger repayment even though you still own it.

3. Deferred-payment second mortgages. You owe the full amount — just not now. No payments and usually no interest until you sell, refinance, or pay off the first mortgage. This is not free money. It’s an interest-free loan that reduces your proceeds at closing, and buyers routinely mistake it for a grant because nothing is due monthly.

4. Matched savings programs. Individual Development Accounts and similar vehicles match your deposits, often 1:1 to 4:1. They require the longest lead time — six to twenty-four months of consistent saving — but produce both the funds and the habit.

Understanding the structure matters more than the dollar amount, because it determines whether you ever repay the money.

Where to Find DPA Programs

owner financing

Start with your state housing finance agency.

Every state operates one, and they administer the largest and best-funded programs.

Most pair down payment assistance with below-market first mortgage rates, so the combined benefit exceeds the assistance amount alone.

Then check locally. Cities and counties run their own programs, often with less competition than state offerings. Municipal housing departments, community development agencies, and local nonprofits are all worth calling.

Top 20 Down Payment Assistance Programs in the U.S.

These twenty programs are ranked by structure quality, not award size — because a $10,000 grant you never repay beats a $25,000 deferred loan you settle at sale. The Structure column is the one to read first.

Program · State Structure Notes
PHFA K-FIT Pennsylvania Forgivable
10 years, 10%/yr		 5% of purchase price · fully forgiven after a decade
Oregon OHCS DPA Oregon Varies Among the largest awards nationally · 25% of funds reserved for veterans
CHFA DPA Grant Colorado Grant
never repaid		 True grant option alongside a separate deferred second — rare to offer both
CalHFA MyHome California Deferred Scales with purchase price · county-calibrated income limits- — see our California first-time buyer guide
Florida Hometown Heroes Florida Deferred Expanded beyond first responders to most Florida employers · verify funding status
TSAHC Home Sweet Texas Texas Grant or deferred Texas runs two agencies — buyers choose between TSAHC and TDHCA
TDHCA My First Texas Home Texas Deferred Combinable with a Mortgage Credit Certificate
NJHMFA DPA New Jersey Forgivable Forgivable rather than deferred — better terms than most high-cost states
NC 1st Home Advantage North Carolina Deferred
flat amount		 Fixed dollar award — covers proportionally more on lower-priced homes
Maryland Mortgage Program Maryland Deferred County programs stack on top · SmartBuy addresses student debt
AHFA Step Up Alabama Second mortgage
10-yr, low fixed rate		 Priced well below market · stacks with a closing cost grant and an MCC
WSHFC Home Advantage Washington Deferred Needed in a state with one of the highest median down payments nationally
Ohio Housing YourChoice Ohio Forgivable Pairs with the nation’s lowest median down payment requirement
MSHDA MI 10K DPA Michigan Deferred Verify current funding and award amount before applying
Virginia Housing DPA Grant Virginia Grant True grant · county-tiered limits span Fairfax to Roanoke
Georgia Dream Georgia Deferred Larger awards for educators, healthcare workers, public safety and military
WHEDA Capital Access Wisconsin Second mortgage Pairs with WHEDA below-market first mortgages
Idaho Housing DPA Idaho Second mortgage Much of Idaho also qualifies for zero-down USDA — compare both
Oklahoma OHFA Homebuyer Oklahoma Grant or second Low median prices mean assistance covers a larger share of closing
Hawaii HHFDC Hawaii Deferred Paired with Hawaii’s special-exception loan limits, well above mainland caps

Award amounts, income limits, and funding availability change annually and several programs pause when allocations are exhausted. Verify current terms directly with each agency before applying. Structures shown reflect each program’s standard offering; agencies frequently run multiple variants with different repayment terms.

What DPA Programs Typically Require

Requirements vary, but most share five conditions:

  • Income limits — commonly 80% to 120% of area median income, though high-cost markets run considerably higher
  • Purchase price caps — tied to local median values
  • Homebuyer education — a HUD-approved course, typically 6 to 8 hours, often available online
  • Owner-occupancy — the property must be your primary residence, usually for a defined minimum period
  • Minimum credit score — generally 620 to 640, aligned with the underlying loan program

The “first-time buyer” definition surprises people. Most programs define it as not having owned a principal residence in the previous three years — which means prior homeowners who’ve been renting frequently qualify.

Pairing Assistance With Your Loan Program

Down payment assistance layers on top of a mortgage; it isn’t a mortgage itself. The pairing matters:

  • FHA accepts DPA readily and permits 100% of the down payment from gift funds or approved assistance. Its 3.5% requirement is the smallest gap most programs need to close. See FHA loan requirements.
  • Conventional 97 requires only 3% down, and many state programs pair with it — often at better long-term cost than FHA, since conventional mortgage insurance cancels.
  • VA and USDA already require nothing down, so assistance goes toward closing costs instead. If you qualify for either, zero-down financing usually beats a conventional loan with assistance.

Not every lender participates. State programs require lenders to be approved, and many national lenders aren’t. Ask before you apply — switching lenders mid-process to access a program costs weeks.

Don’t Overlook Mortgage Credit Certificates

Administered by the same housing finance agencies, an MCC converts 20% to 50% of your annual mortgage interest into a dollar-for-dollar federal tax credit, capped at $2,000 a year and unlike a deduction, it reduces your tax bill directly.

MCCs must be applied for during the mortgage process. They cannot be obtained after closing, which is why so many eligible buyers miss them. See our guide to first-time home buyer tax credits.

Four Mistakes That Cost Buyers Assistance

  1. Applying too late. Most programs require approval before you go under contract. Several close funding mid-year when allocations run out.
  2. Assuming you earn too much. Income limits in high-cost markets can exceed $150,000, and some reach considerably higher.
  3. Skipping the education course. It’s a hard requirement, courses fill up, and completion certificates take time to issue.
  4. Not asking about the repayment trigger. Forgivable and deferred loans behave very differently at sale. Know which you have before you sign.

Frequently Asked Questions

Do you have to repay down payment assistance?

It depends entirely on the structure. Grants never are. Forgivable second mortgages are erased after a set occupancy period, commonly five to ten years, though selling early usually triggers prorated repayment. Deferred-payment loans are always repaid — just not until you sell, refinance, or retire the first mortgage. Matched savings are yours outright once the program conditions are met. Ask the administering agency to state in writing which structure applies and what triggers repayment. That single question determines whether the assistance is free money or a lien reducing your eventual proceeds.

Can you use down payment assistance with an FHA loan?

Yes, and it’s the most common pairing. FHA permits the entire 3.5% down payment to come from approved assistance or gift funds, making the cash requirement effectively zero for qualifying buyers. The assistance provider must meet FHA’s source requirements, and your lender must participate in the program.

What income disqualifies you from down payment assistance?

Most programs cap eligibility between 80% and 120% of area median income, though high-cost markets run substantially higher. Because AMI is local, a household earning $140,000 may qualify in one metro and not in another. Check your specific county’s limit rather than assuming — this is the most common reason buyers don’t apply.

How long does down payment assistance take to arrange?

Plan for 30 to 60 days beyond a standard mortgage timeline. Homebuyer education, program application, and funding reservation all add steps. Start before you house-hunt, not after you’re under contract — several programs require approval before you sign a purchase agreement.

What happens to my DPA lien if I refinance?

Most forgivable and deferred second mortgages require subordination — your assistance provider must formally agree to stay in second position behind the new first mortgage. Many agencies approve routinely; some don’t. Several treat a refinance as a repayment trigger, particularly if you take cash out. Ask before you refinance, not during. A subordination request adds two to four weeks to a refinance timeline, and discovering mid-process that your agency won’t subordinate can force you to pay off the assistance in full or abandon the refinance.

Can I rent out a home bought with down payment assistance?

Usually not during the forgiveness or deferral period. Nearly every program requires owner occupancy, and the forgiveness clock runs on occupancy rather than ownership. Converting to a rental typically triggers immediate repayment of the outstanding balance, even though you still own the property. Some programs allow exceptions for military deployment, job relocation, or documented hardship — but they require written approval in advance. If renting is part of your plan, confirm the occupancy term before accepting assistance, not after.

Can you stack multiple down payment assistance programs?

Often yes, and it’s underused. A state housing agency program, a city or county grant, and a Mortgage Credit Certificate can frequently combine on a single purchase. Some lenders also layer their own assistance on top. The constraint is usually the lender, not the programs — your loan officer must be approved for each one, and not all are. Ask specifically which programs they can combine before applying. Stacking is how buyers in high-cost markets close with almost nothing out of pocket.

Program terms, income limits, and funding availability change frequently and vary by state, county, and municipality. Verify current requirements directly with the administering agency before making decisions. RefiGuide.org is an advertising marketplace, not a lender or program administrator.