How down-payment assistance works
Down-payment assistance (DPA) programs help buyers cover the down payment, closing costs, or both on a primary residence. Most programs come from state Housing Finance Agencies (HFAs), but federal programs like Good Neighbor Next Door, local programs from cities and counties, employer-assisted housing programs, and grants from nonprofit organizations are also widely available.
Assistance is typically structured as one of three forms: a grant (no repayment required), a forgivable second mortgage (forgiven over 3-15 years if you stay in the home), or a deferred-payment second mortgage (repaid only when you sell, refinance, or pay off the first mortgage). Each structure has different long-term implications — grants are the most valuable, deferred loans are the most flexible.
State Housing Finance Agency programs
Every state has a Housing Finance Agency (HFA) that offers down-payment assistance to first-time and moderate-income buyers. Programs vary widely in generosity, eligibility, and structure, but most offer assistance of 3-5% of the loan amount, layered on top of FHA, VA, USDA, or conventional first-mortgage financing.
Major state HFA programs include CalHFA (California), Texas TSAHC and TDHCA, Florida Housing, NC Housing Finance Agency, Arizona HOME Plus, Washington WSHFC, Georgia Dream, Colorado CHFA, and Nevada Home Is Possible. Each has variants for teachers, healthcare workers, first responders, and other public service workers.
- •CalHFA — up to 3.5% of purchase price
- •Texas TSAHC / TDHCA — up to 5% of loan amount
- •Florida Hometown Heroes — up to $35,000
- •NC 1st Home Advantage — up to $8,000 forgivable
- •Arizona HOME Plus — up to 5% of loan amount
- •WSHFC Home Advantage — 5% second mortgage
- •Georgia Dream PEN — up to $10,000 for public service
- •Colorado CHFA — up to 3% grant (no repayment)
Federal and national programs
HUD's Good Neighbor Next Door offers HUD-owned homes in revitalization areas at 50% off list price for teachers, law enforcement, firefighters, and EMTs who commit to living in the home for 3 years. Inventory is limited but the discount is dramatic.
Federal Home Loan Bank Affordable Housing Program offers grants of up to $10,000-$15,000 through participating member banks, available in most states. Energy-efficient mortgage programs (FHA EEM, VA EEM) finance energy-efficient improvements as part of the purchase mortgage, effectively giving you more buying power for the same monthly payment.
Local and employer-based programs
Many cities and counties offer their own down-payment assistance — Atlanta's Atlanta Affordable Housing Trust Fund, Denver's Metro Mortgage Assistance Plus, Boston's ONE+Boston, and dozens of others. These programs often have lower income limits and tighter geographic boundaries but more generous assistance amounts.
Employer-assisted housing programs are increasingly common at large employers (hospitals, universities, tech companies, municipalities). They typically offer forgivable loans of $5,000-$25,000 for employees buying within a defined commute radius. Ask your HR department whether your employer participates.
Frequently asked questions
Can I stack multiple down-payment assistance programs?+
Often yes. State HFA assistance commonly stacks with federal programs (like FHA or USDA) and sometimes with local city or employer programs. A loan officer experienced with DPA will identify every program you qualify for and structure the closing to use all of them. Stacking is how some buyers come to closing with essentially no cash out of pocket.
Do I have to be a first-time buyer to qualify?+
Many programs require first-time buyer status, defined as not having owned a primary residence in the past 3 years. Some programs waive this for veterans, surviving spouses, or buyers in targeted revitalization areas. Some programs (like CalHFA in many counties) are open to repeat buyers under income limits.
Does assistance affect my qualification?+
Most assistance is structured to enhance rather than limit your qualification — it provides cash you would otherwise need to bring to closing. The first-mortgage lender simply approves you based on the standard underwriting and the assistance funds appear at closing. The assistance source itself usually doesn't affect DTI or other underwriting metrics.
How do I find programs for my area?+
Start with your state's Housing Finance Agency website. Then check your city and county housing department. Ask your HR department about employer programs. A good loan officer will know about local programs that aren't widely advertised. Down Payment Resource (downpaymentresource.com) maintains a national database that's a useful starting point.