Down Payment Assistance Programs: Free Money for Homebuyers
Thousands of dollars in down payment help goes unused every year because buyers do not know it exists. Here is how to find it.
There are hundreds of down payment assistance (DPA) programs across the country, and most homebuyers don't even know they exist. These programs offer grants, forgivable loans, or low-interest second mortgages to cover your down payment and sometimes closing costs.
How DPA Programs Work
Most DPA programs are run by state housing finance agencies (HFAs), local governments, or nonprofit organizations. They typically offer:
- Grants: Free money, never repaid
- Forgivable loans: Disappear after 3 to 5 years if you stay in the home
- Deferred loans: 0% interest, repaid when you sell or refi
- Low-rate seconds: A second mortgage with a low fixed rate
The average grant amount is $7,500 to $15,000. Some programs go as high as $40,000 in high-cost areas.
Who Qualifies
Eligibility varies but usually depends on:
- Income limits (typically 80% to 120% of area median income)
- Purchase price limits
- First-time buyer status (some waive this for veterans or targeted areas)
- Completion of a homebuyer education course
Many programs target teachers, firefighters, nurses, and law enforcement. Some are zip-code-specific for revitalization areas.
How to Find Programs Near You
Start with your state's HFA website. Search for <down payment assistance> plus your city or county. Your lender should also know local DPA options — if they don't, find a lender who specializes in first-time buyer programs.
DPA programs have limited funding that often runs out mid-year. Apply early, and get pre-approved with a lender who knows how to layer DPA with your primary mortgage.
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