Every state has a Housing Finance Agency (HFA) that runs down-payment-assistance programs — typically $5,000 to $25,000+ for qualified buyers. We can't list every program here because state HFAs change terms quarterly. What we can do: tell you who runs DPA in your state, how the four common DPA structures work, and what stacks with which mortgage. Then your LO walks you through your specific options.
What brings you here today?
Every state has a Housing Finance Agency that runs DPA. Click your state to see the official HFA name, website, whether LHFS lends in your state, and the kinds of DPA programs typically available. Final program terms always come from your state's HFA — they're the source of truth.
State HFA names and websites verified against NCSHA's official directory. Specific program terms (amounts, income limits, recapture rules) change frequently — always confirm at the HFA's official website.
“Down payment assistance” is a category, not a program. It comes in four common structures, each with different repayment rules. The same dollar amount can mean very different things depending on which structure your state HFA uses. Read the fine print before falling in love with the headline.
Best for: Buyers planning to stay past the forgiveness period. Sell at year 4 of a 5-year forgivable, you owe pro-rated. Sell at year 6, it's free money.
Best for: Cash-tight buyers. The second sits behind your first mortgage, accruing little to no interest. You owe it eventually — but only when you sell or refinance.
Best for: Buyers building equity from day one. Counts as debt in your DTI — so it can affect how much first mortgage you qualify for.
Best for: Long-term owners. MCC isn't down-payment cash — it's an ongoing tax credit that reduces your federal tax bill every year you own the home and itemize.
DPA layers on top of a first mortgage. Most state HFAs design their DPA to work with FHA, Conv 97, HomeReady, VA, and USDA — but with conditions. The matrix below shows which DPA structures typically work with which loan programs.
| DPA Type | FHA 3.5% down | Conv 97 3% down | HomeReady 3% down | VA 0% down | USDA 0% down |
|---|---|---|---|---|---|
| Forgivable Grant most common | YES | YES | YES | USUALLY | USUALLY |
| Deferred 2nd cash-tight buyers | YES | YES | YES | USUALLY | USUALLY |
| Repayable 2nd build equity | YES | USUALLY | USUALLY | RARELY | RARELY |
| MCC Tax Credit long-term owners | YES | YES | YES | YES | YES |
“Usually” means most state HFAs allow this stack but program rules vary. “Rarely” means occasional state programs allow it but most don't. Confirm with your specific state HFA before assuming compatibility.
Every DPA dollar comes with conditions. None of these are dealbreakers — but each one is a question to ask before you commit. Borrowers who skip these conversations end up surprised when they sell, refinance, or hit an unexpected occupancy issue.
Forgivable grants are forgiven on a schedule — typically 5 to 10 years. Sell or refinance before the clock runs out, you owe pro-rated repayment. Plan to stay; or don't take a forgivable grant if you might move soon.
Second mortgages need to be paid off or subordinated when you refinance the first. Some HFAs will subordinate; some won't. Built-in friction when rates drop and you want to refi.
Some DPA programs include a recapture provision: if your income rises significantly above program limits within 9 years, you may owe a portion back at sale. Rarely triggers — but real.
DPA almost always requires primary residence and 12+ month occupancy. Move out and rent the home in year 2? You may trigger immediate repayment. Read your specific program's rules.
Most DPA requires a HUD-approved homebuyer education course — typically online, ~6 hours, $0–$99. Genuinely useful, but adds a week to your timeline if you wait.
State DPA funds open and close based on annual appropriations. A program available in March may be paused in October. Don't assume continuous availability — check current status.
No marketing copy. The biggest DPA misunderstandings are about who qualifies, what counts as “free,” and how the layered loans actually work in real life. Let's clear those up.
It depends entirely on your state and your file. Typical ranges across all 50 states:
Forgivable grants: $3,000 to $15,000.
Deferred second mortgages: $10,000 to $25,000.
Repayable seconds: $5,000 to $15,000.
Some states have programs at the higher end (California's MyHome offers up to several percent of the purchase price; Florida's Hometown Heroes offers up to $35K for eligible workers). Others cap at $7,500 forgivable.
The dollar amount also depends on income tier (lower-income borrowers often qualify for larger amounts), purchase price (some programs scale by price), and whether you're stacking multiple programs.
Most state DPA programs require first-time-buyer status — but the definition is generous. “First-time buyer” almost always means you haven't owned a primary residence in the past 3 years.
So if you owned a home, sold it 4 years ago, and have been renting since — most state DPA programs treat you as first-time again.
Some programs have no first-time requirement at all — usually special-population programs (teachers, first responders, healthcare workers, military, certain rural areas). And some HFAs run dedicated repeat-buyer programs in addition to first-time programs.
Yes, almost always — and the limits matter. Most state DPA programs cap at 80–115% of area median income (AMI), which varies by county. Some target very-low-income only (≤80% AMI). Some go up to 140% AMI for high-cost areas.
Income calculations also vary. Most programs use borrower income only (not full household), but a few mirror USDA's full-household rule. Adjustments may be allowed for childcare, dependent care, or full-time students.
If your income is borderline, your LO will calculate your adjusted income before submitting — sometimes that brings you under the cap.
Sometimes — and when you can, the math gets impressive. Common stacking patterns:
State HFA grant + MCC tax credit: very common. The grant covers down payment / closing; the MCC reduces your tax bill annually for 30 years.
State HFA grant + city/county DPA: some metros run their own additional programs (Los Angeles, Chicago, Boston, NYC, etc.). Stacking with state DPA is sometimes allowed.
Employer-assisted housing programs: some hospitals, school districts, and large employers offer additional DPA. These often stack with state HFA programs.
Total stack rules vary. Some HFAs cap total DPA at a percentage of purchase price; others don't. Your LO will run the stack to see what's allowed.
Different sources, different terms.
State HFA DPA is publicly funded (bonds + appropriations). Terms are standardized across all approved lenders. Income and price limits set by the state. Larger amounts available, often forgivable. This is what this page is about.
Lender-funded DPA (sometimes called “grant” programs offered by individual lenders) is privately funded — usually as a gift to the borrower in exchange for a higher rate. Smaller amounts. Less restrictive eligibility. Read the rate trade-off carefully — sometimes the higher rate over 30 years costs more than the grant is worth.
Yes, by about a week. State HFA review of the DPA second-mortgage file adds 3–7 days versus a non-DPA file. Plan for 35–50 day closes on DPA-stacked transactions, vs. 28–35 for plain FHA or Conv 97.
The homebuyer education course also adds time if you haven't completed it before applying. Smart move: start the course as soon as you start house hunting, so the certificate is ready when you go under contract.
For most first-time buyers, the trade is worth it. A week of process for $5K–$25K of help is a reasonable exchange. If you absolutely need a 21-day close, DPA may not fit your timeline — your LO will tell you up front.
Sixty-second short app. No SSN. No hard credit pull. We'll check your state's current DPA programs against your file and tell you what stacks. That's how this should work.