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For many considering homeownership, the largest obstacle can often be, saving for the upfront costs associated with buying a home. Down payment assistance can be powerful resource, to aid in making access to homeownership affordable. Learn more about programs available.

What Is Down Payment Assistance?

Down payment assistance, sometimes referred to as DPA or DALP, is third party funding, that can be used to aid a prospective homebuyer with funds that can be applied toward upfront homeownership costs, such as the down payment and/or associated expenses, such as the closing costs.

Types of Down Payment Assistance

Down payment assistance programs often falls into one of five categories........

Grants: A grant (or sometimes called a cash grant) is like free money, in that it can be applied toward a home purchase and if specific criteria, defined by the assistance program is met, it does not have to be paid back. Usually grant programs will have an associated time clause, requiring that a buyer must live in a home for a specific number of years or the grant will need to be repaid in proration, in part or in full.


Forgivable Loans:  A forgivable loans usually will not have to be paid back, as long as specific criteria, defined by the assistance program is met. Most often times, a lien is placed on the home and removed once the loan is either forgiven or paid back.

Deferred Payment Loan: A deferred payment loan, must be repaid, but not right away. Deferred Payment Loans will often need to be paid back at some point in the future, details will be defined by the specific assistance program. Most often, these type of down payment assistance loans, will be offered at 0% interest, or at a very low interest rate. A lien is usually placed on the home and removed once the loan is paid back.

Interest Rate Reductions: An interest rate reduction, also called mortgage discount points, can be used to subsidize a buyer in obtaining a lower mortgage rates. This is done with a one time, cash payment at closing, which is used to pay upfront fees to the buyers lender for a lower interest rate. 

Property Tax Bill Credits: Tax bill programs award tax bill abatements and tax relief to homebuyers and are often times made available to homebuyers in specific states, counties and regional zones of a city. A buyer can receive a long-term tax reduction discount minimizing their tax obligation for a specific length of time.

How Do You Qualify For Down Payment Assistance?

You will need to meet minimum loan requirements for a first mortgage.


Then every down payment assistance program has its own set of requirements and eligibility guidelines; some common examples of eligibility requirements can be.....

Recent Homeownership Requirements

Some programs requiring a prospective applicant to be a "First-time homebuyer". Typically these First-time homebuyers programs are available to buyers who haven’t owned a home in the last three years.

Income Requirements

Some programs requiring a prospective applicant to make above, or below a specific annual income. Other times the amount may vary based on family size and or area. Often times guidelines will have % threshold of AMI (area median income) accepted. Income requirements are often in place to ensure that the programs are reaching low-to moderate income homebuyers.


Credit Score Requirements

Some programs requiring a prospective applicant to meet a minimum credit score of 640 or higher and others, such as an FHA will only require a 580 minimum score.


Time Requirements

Some programs will require an owner to own a property for a specific number of years.


Occupancy Requirements

Some programs may require an owner to occupy a property for a specific number of years; which can include rental restrictions.

Regional Requirements 

Some programs have a primary focus on revitalizing a specific community and therefore will have a regional focus on a qualified area and/or census tract.


Homeownership Counseling &  Education Requirements

Some programs require online and/or in-person educational and counseling courses for Financial Literacy, to Credit Counseling ensuring buyers fully understand the costs and responsibilities of homeownership.

Not all lenders are informed and/or approved to offer some/all down payment assistance programs you may be eligible for.


Unfortunately, there is also not a single "place", or inclusive website with all down payment assistance resources.

I have created and continue to update a comprehensive list of resources that I am happy to share for down payment assistance options, if you wish to learn more about these options, please reach out to me in the tab below.



The California Association of Realtors also is a wonderful resource and the have a compiled source of over 400+ down payment assistance programs available in California. Watch the short video below.

Content by Nina Brown East Bay Realtor 
Real Estate with Nina Brown
Making Your Next Move, Your Best Move!

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