Down Payment Assistance Programs

Down Payment Assistance (DPA) programs help home buyers with loans or grants that reduce the amount they need to save for a down payment.

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Who Are Down Payment Assistance Programs Best For?

Down Payment Assistance Programs are structured to help clients that have good credit but lack assets for a down payment. Down payment assistance programs are typically meant for first-time home buyers.

However, a repeat home buyer often counts as a “first-time buyer” if they haven’t owned a home in the past three years. Other requirements might include income caps, purchase price caps, and buying a home in a qualified area. Many programs also require homebuyer education courses.

Every down payment assistance program is a little different. The exact criteria to qualify will depend on where you live and what programs are available. That said, many of them have similar guidelines.

How Do Down Payment Assistance Programs Work?

The lender does a 2nd loan (2nd lien) to most, if not all, of the down payment and closing costs. When the loan closes, you will have your primary (1st lien) mortgage and a secondary (2nd lien) down payment assistance loan.

Down payment assistance (DPA) programs help home buyers with loans or grants that reduce the amount they need to save for a down payment. Provided you qualify, you could receive an outright grant or a low- or no-interest loan to cover your down payment. Some DPA funds can be used for closing costs, too.

Most DPA programs are offered at the local level and eligibility requirements vary from one program to the next.

How Do I Qualify For A Down Payment Assistance Program?

  • First-time home buyers
  • Up to 50% DTI (Debt-to-Income Ratio)
  • Minimum 640 FICO® Score
  • The Home must be a Primary Residence
  • Buyers must have low- to moderate-income
  • The home is within local purchase price limits
  • The DPA is used in conjunction with an approved mortgage program
  • You work with an approved mortgage lender

Take the first step toward the right mortgage.

Apply online or over the phone. Our team at F5 Mortgage would love to help!

Apply For Your Down Payment Assistance Loan Today!

Down Payment Assistance Program Benefits

It’s possible to qualify for a home loan with no money down or with a low down payment of 3% to 3.5%. But using an assistance program to increase your down payment amount has some distinct benefits:

  • You can make a more competitive offer
  • You’ll have a smaller loan amount
  • You’ll have reduced mortgage payments
  • You can buy a home sooner

In hot housing markets around the nation, home shoppers with little or no cash for down payments are struggling to compete with buyers who can make larger down payments.

Down Payment Assistance loans or grants can help make up some of the difference if you’re low on savings.

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