Down Payment Assistance: Your Key to Affordable Homeownership

Loan Program Summary & Highlights

For many aspiring homeowners, the biggest hurdle to buying a home is saving for the down payment. Down Payment Assistance (DPA) programs are designed to help bridge this gap by providing grants, loans, or other resources to eligible buyers. These programs make it easier to purchase a home without the need for extensive upfront savings.

• Grants: Funds that do not need to be repaid.
• Low-interest or deferred loans: Borrowed funds to cover down payment costs, with favorable repayment terms.
• Flexible eligibility requirements: Income limits and other criteria vary by program and location.
• Available nationwide: Programs are offered by local, state, and federal agencies, as well as nonprofits.
• Compatible with multiple loan types: Often paired with FHA, VA, USDA, or Conventional loans.

What is Down Payment Assistance?

Down Payment Assistance programs are resources offered to help eligible homebuyers reduce or eliminate the upfront cost of purchasing a home. These programs provide financial aid in the form of grants, forgivable loans, or low-interest loans that can be applied toward your down payment or closing costs.

DPA programs are often targeted at first-time homebuyers or low- to moderate-income families. They are designed to make homeownership more accessible and to remove financial barriers that prevent buyers from achieving their dreams of owning a home.

General Guidelines for Down Payment Assistance

• Eligibility: Based on income limits, credit score, and first-time homebuyer status.
• Funding amount: Typically ranges from 3% to 5% of the home's purchase price.
• Types of assistance: Grants, forgivable loans, and repayable loans.
• Homebuyer education: Many programs require completion of a homeownership education course.
• Primary residences only: Assistance is only available for owner-occupied homes.

Pros of Down Payment Assistance

• Reduces upfront costs: Provides financial relief for buyers struggling to save for a down payment.
• Accessible to more buyers: Expands opportunities for low- to moderate-income families.
• Encourages homeownership: Removes barriers that prevent renters from transitioning to homeownership.
• Compatible with multiple loan types: Can be combined with FHA, VA, USDA, and Conventional loans.
• Flexible repayment options: Includes grants or deferred loans that may not require repayment.

Cons of Down Payment Assistance

• Income restrictions: Many programs have income limits, excluding higher-income buyers.
• Geographic limitations: Assistance is often location-specific and may not be available in all areas.
• Limited funding: Some programs have limited funds, making it necessary to act quickly.
• Program requirements: May require homebuyer education or have restrictions on property type.
• Potential loan repayment: Some forms of assistance require repayment if certain conditions aren’t met.

Best Candidates for Down Payment Assistance

• First-time homebuyers: Programs often target buyers entering the market for the first time.
• Low- to moderate-income households: Assistance is typically geared toward families with limited financial resources.
• Buyers with good credit: Many programs require a minimum credit score for eligibility.
• Borrowers with limited savings: Perfect for those struggling to save for a down payment.
• Primary residence buyers: Assistance is available only for those purchasing owner-occupied homes.

At One Mortgage Company, we’re committed to helping you explore all available resources to make your homeownership journey as smooth as possible. Contact us today to learn more about Down Payment Assistance programs and how we can help you achieve your dream of owning a home.