Here’s a secret most first-time home buyers never learn: there’s free money waiting for you. Every state, most counties, and many cities offer down payment assistance (DPA) programs that can hand you thousands of dollars in grants, forgivable loans, or tax credits to help you buy a home. Yet less than 10% of eligible buyers actually use them. This guide shows you exactly what’s available, who qualifies, and how to find the programs in your area.
Before applying for DPA, figure out how much house you can afford. Run your numbers in our free home affordability calculator — then we’ll show you how DPA can unlock a bigger home or lower payment.
What is down payment assistance?
Down payment assistance is any program that helps home buyers cover their down payment and/or closing costs. It comes in four main forms:
- Grants — free money you never pay back
- Forgivable loans — a second loan that’s forgiven after you live in the home for 5–10 years
- Deferred loans — a second loan you only repay when you sell or refinance
- Low-interest second mortgages — a second loan with better terms than a regular mortgage
Some programs also offer tax credits (Mortgage Credit Certificates, or MCCs) that can save you thousands on your annual tax bill for as long as you own the home.
Why DPA is one of the best-kept secrets in home buying
According to a 2025 Down Payment Resource report, more than 2,000 active DPA programs exist in the US at any given time. Some offer $5,000; some offer $50,000. Yet most first-time buyers never apply for a single one, usually because:
- They don’t know DPA exists
- They assume it’s only for very low-income buyers
- They’re told incorrectly that “you need 20% down”
- Their lender doesn’t mention it
- They don’t know where to look
The reality: DPA is widely available, covers a wide income range, and is often designed for regular middle-class buyers — not just low-income families.
The 4 types of down payment assistance
1. Grants (free money)
These are outright gifts — you don’t pay them back. Grants are usually the smallest amounts (often $2,500–$15,000), but they’re truly free money. Common sources: state housing finance agencies, local nonprofits, employer programs.
2. Forgivable loans
A second mortgage that’s forgiven — meaning you never actually repay it — as long as you live in the home as your primary residence for a set period, usually 5, 10, or 15 years. If you move out or sell before the forgiveness period ends, you pay back a prorated portion.
3. Deferred loans (no-interest second mortgages)
A second loan with no monthly payments. The principal isn’t due until you sell the home, pay off the first mortgage, or refinance. Great for buyers who need the help now and plan to repay when they have more equity.
4. Low-interest second mortgages
A second loan with an interest rate significantly lower than a regular mortgage, sometimes 0–2%. You make monthly payments, but much smaller than you would on a traditional second loan. These are often paired with larger DPA amounts.
Bonus: Mortgage Credit Certificates (MCCs)
Not technically DPA, but similar in effect. An MCC is a federal tax credit that lets you claim 10–50% of your mortgage interest as a direct tax credit every year for as long as you own the home. On a $320,000 loan, it can save you $1,500–$3,000 per year in taxes.
Who qualifies for down payment assistance?
Eligibility varies by program, but most DPA programs share a few common requirements:
- First-time home buyer — usually defined as not having owned a home in the last 3 years (not just “never owned”)
- Income limits — often up to 80–140% of your area’s median income, depending on the program
- Purchase price limits — the home must fall under the program’s price cap
- Credit score minimums — typically 620–680
- Primary residence — you must live in the home you buy
- Homebuyer education course — many programs require an 8-hour class (often online, usually free or $99)
Income limits aren’t as strict as you think
Many buyers assume DPA is only for low-income families, but the income limits are often surprisingly generous. In most markets, households earning up to $100,000+ can qualify for at least some DPA. In high-cost areas, limits can be $150,000 or more.
Special DPA programs for specific professions
Many programs offer extra-generous DPA for people in specific careers:
- Teachers — Good Neighbor Next Door, state teacher programs
- Firefighters, police officers, EMTs — public safety programs
- Nurses and healthcare workers — hospital-sponsored DPA, state programs
- Military and veterans — combined with VA loans for maximum benefit
- Federal employees — various special programs
- Teachers in low-income districts — HUD’s Good Neighbor Next Door offers 50% off home prices in designated areas
How to find down payment assistance in your area
1. Start with your state’s Housing Finance Agency (HFA)
Every state has an HFA. They’re the largest source of DPA programs and often offer the best terms. Google “[your state] housing finance agency” or visit hud.gov/states.
2. Check your city and county programs
Most major cities and many counties have their own DPA programs layered on top of state programs. You can often stack them.
3. Use HUD’s search tool
HUD maintains a searchable database of state and local homeownership assistance programs. Free and updated regularly.
4. Ask your lender
Not every lender offers DPA — and some actively hide it because it complicates underwriting. Ask directly: “What down payment assistance programs do you support?” If they don’t know, find another lender.
5. Try a DPA-focused database
Sites like Down Payment Resource (downpaymentresource.com) let you enter your income and location and see matching programs in minutes. It’s the easiest way to see the full landscape.
6. Talk to a HUD-approved housing counselor
Free, trained housing counselors can help you navigate the paperwork. Find one at hud.gov/findacounselor.
Examples of real DPA programs
CalHFA MyHome Assistance (California)
Up to 3.5% of the purchase price as a deferred, no-payment second mortgage for first-time buyers. Can be combined with CalHFA first mortgages for a complete low-down-payment package.
Texas Homes for Texas Heroes
Grants of up to 5% of the loan amount for teachers, firefighters, nurses, police, and veterans. Completely forgivable, no repayment.
Florida Housing Hometown Heroes
Up to $35,000 for frontline workers in Florida — teachers, nurses, law enforcement, military, and more.
Chenoa Fund
A national DPA program offering 3.5% of the purchase price as a repayable or forgivable second mortgage, designed to pair with FHA loans.
Good Neighbor Next Door (HUD)
Teachers, police, firefighters, and EMTs can buy HUD-owned homes in revitalization areas for 50% off the list price. One of the most generous programs in the country.
How DPA works with your primary mortgage
DPA is typically stacked on top of a traditional first mortgage — most often FHA, but also conventional, VA, or USDA loans. The DPA covers your down payment and/or closing costs, while the first mortgage covers the rest.
Example: $300,000 home, FHA loan.
- Home price: $300,000
- FHA first mortgage: $289,500 (3.5% down)
- Buyer’s required down payment: $10,500
- DPA forgivable loan: $10,500
- Buyer’s out-of-pocket for down payment: $0
Closing costs can often also be covered by DPA, seller concessions, or lender credits. With the right combination, you can genuinely close with almost nothing out of pocket.
Common DPA myths
Myth: “DPA is only for very low-income families”
False. Most programs have generous income limits — often 100–140% of area median income. In most markets, families earning $80,000–$120,000 qualify.
Myth: “DPA is hard to qualify for”
Not really. If you meet basic first-time buyer and income requirements, the approval process is usually as simple as your main mortgage. Programs often take an extra 1–2 weeks to process.
Myth: “DPA means worse mortgage terms”
Sometimes true, sometimes false. Some DPA programs come with slightly higher rates on the first mortgage, but the net savings usually still come out in your favor.
Myth: “You have to repay all DPA if you sell”
Depends on the program. Forgivable loans may require partial repayment if you sell early, but grants are yours to keep forever.
Myth: “Lenders will tell me if I qualify for DPA”
Unfortunately false. Many lenders don’t volunteer DPA info because it adds paperwork. You have to ask directly — or find a lender who specializes in DPA.
DPA + Beycome: stacking your savings
Here’s where it gets really interesting. When you buy with the Beycome buyer program, we rebate up to 2% of the purchase price back to you at closing — and that rebate can be stacked with DPA, seller concessions, and lender credits.
On a $300,000 home:
- DPA forgivable loan: $10,500 (covers FHA down payment)
- Seller concession: $6,000 (covers 2% of closing costs)
- Beycome rebate: $6,000 (2% of purchase price)
- Total savings: $22,500
That’s enough to cover your entire down payment, most of your closing costs, and still have cash left for moving and reserves. See how it all works together in our affordability calculator.
Bottom line: don’t leave free money on the table
Down payment assistance is the single most under-used tool in home buying. Billions of dollars sit unused every year because buyers don’t know they qualify. The search takes an afternoon. The paperwork adds a week to your closing. And the reward can be tens of thousands of dollars you get to keep forever. If you’re buying your first home — or haven’t owned one in the last 3 years — spend one hour searching DPA programs in your state. It might be the highest-paid hour of your life.
See what you can afford with DPA built in. Run your numbers through the Beycome affordability calculator — and see how much a down payment assistance boost unlocks.
Discover beycome title today!