Down Payment Assistance

Down payment assistance, often shortened to DPA, is money from a lender, a housing agency, or a local program that covers part or all of your down payment and sometimes your closing costs. It comes in several forms, and the form matters more than the headline.

Justin Lazzaro, NMLS #1229453 | Reasy Financial, LLC, NMLS #2446155 | Licensed in Arizona, Pennsylvania, Florida, and Texas

Who down payment assistance fits

DPA helps buyers who can afford the monthly payment but have not been able to save the cash to close.

Buyers with income and credit, short on cash

You still have to qualify for the first mortgage. The assistance only solves the cash problem.

Buyers who plan to stay

Many programs forgive the assistance only after you keep the home and the loan for a set period.

Who it usually does not fit

If you expect to sell or refinance soon, or you already have the funds, a standard loan usually costs less.

How down payment assistance works

1

We check what is available for the address

Programs differ by state and sometimes by county. Income limits, when they apply, are based on the area.

2

We pair it with a first mortgage

Most assistance is attached to an FHA loan. Some programs work with conventional or USDA loans.

3

You complete any required education

Some programs require a homebuyer education course before closing, and others require it only in certain cases, such as a lower credit score.

Assistance can be a grant, a forgivable second loan, or a repayable second loan, which usually has its own monthly payment. I will tell you exactly which one you are being offered. Availability differs across Arizona, Pennsylvania, Florida, and Texas.

How it compares to other options

The three forms of assistance behave very differently after closing.

How the types of down payment assistance compare
TypeDo you repay it?Worth knowing
GrantNo, as long as program conditions are metThe least common form, and the first mortgage rate can be higher
Forgivable second loanNot if you meet the conditions for the full forgiveness periodSelling, refinancing, or a late payment can end the forgiveness
Repayable second loanYes, usually with its own monthly paymentWhen there is a payment, it counts when you qualify
Standard low down payment loanThere is nothing extra to repayRequires your own funds or a gift

Three things to know before you apply

1

The first mortgage can cost more

Some programs carry a higher rate on the main loan. Over several years that can cost more than the help was worth, so I compare both ways.

2

Forgiveness has conditions

A late payment can reset or end the forgiveness, and selling or refinancing inside the forgiveness period usually means paying the assistance back.

3

It can limit a future refinance

Many assistance liens cannot be moved behind a new first mortgage, so refinancing means paying the assistance off.

Guidelines change. I confirm current requirements with the lender before quoting anything.

Common questions about down payment assistance

Short answers to common questions. Program rules vary by lender, so treat these as general guidance, not a loan decision.

Is down payment assistance free money?

Sometimes, but usually not. Most programs are second loans that are forgiven over time or repaid, and some raise the rate on the first mortgage.

Do I have to be a first-time buyer?

Not always. Many lender-funded programs are open to repeat buyers.

Are there income limits?

Some programs have them and some do not. When they apply, they are tied to the area where the home is located.

Can I use assistance with a conventional loan?

Some programs allow it. Most are paired with FHA financing.

Can the assistance cover closing costs too?

Some programs allow it. It depends on the program and how much assistance you receive.

Where do you offer down payment assistance?

I am licensed in Arizona, Pennsylvania, Florida, and Texas. Program availability differs in each state, so I check the specific address.

Ready to talk it through?

Pick a time that works for you. We'll go over your goals and next steps, no pressure, just a conversation. Prefer to call or text instead? Reach me directly at (412) 638-4982, or book a quick Zoom if that's easier.