Five main types (2025): (1) Grants - free money that does not need to be repaid (typically $2,500-$15,000), often from state/local housing agencies.

Example: California CalHFA Dream For All up to 20% of home price. (2) Forgivable Loans - loans forgiven after you live in home 5-10 years.

Example: $10k loan forgiven at $2k/year over 5 years. (3) Deferred Payment Loans - 0% interest second mortgage due when you sell/refinance.

Example: Chicago CityKey program $12k deferred until sale. (4) Low-Interest Loans - second mortgage at 1-3% vs market 7-8%. (5) Matched Savings (IDA) - government matches your savings 2:1 or 4:1 after 6-18 months saving.

Average DPA amount: $17,766 nationally (2025).

Combine multiple programs: FHA 3.5% down + $10k state grant + $5k county grant = buy $300k home with $5,500 out of pocket.

2025 common requirements: (1) Income Limits - typically 80-120% Area Median Income (AMI).

Example: Los Angeles 100% AMI = $83,100 single/$118,700 family.

Higher limits for high-cost areas. (2) First-Time Homebuyer - defined as not owning home in past 3 years (some programs waive for veterans, teachers, first responders). (3) Credit Score - minimum 580-640 depending on program.

FHA allows 580, conventional usually requires 620+. (4) Home Price Caps - often at or below FHA loan limits. 2025 limit: $498,257 standard areas, $1,149,825 high-cost (LA, SF, NYC). (5) Primary Residence - must live in home 3-5 years or repay assistance. (6) Homebuyer Education - 8-hour course required by most programs ($50-$100). (7) Debt-to-Income Ratio - typically <45-50%.

Special programs: Military (VA, Navy Federal), Healthcare Workers, Teachers (HFA programs), First Responders often have relaxed requirements or higher grant amounts ($15-25k).

2025 assistance amounts by program type: (1) Percentage-Based - 3-20% of home price.

Example: CalHFA 20% assistance on $400k home = $80k (max $150k). (2) Fixed Amount - $5,000-$25,000 depending on location.

High-cost areas (CA, NY, HI) offer $15-25k.

Midwest/South typically $5-12k. (3) Income-Based - higher assistance for lower incomes.

Example: <50% AMI gets $15k, 50-80% AMI gets $10k, 80-100% AMI gets $7.5k. (4) Combined Programs - stack multiple sources.

Example Texas first-time buyer: $10k state grant + $5k county + 3% seller concession on $250k = $17.5k total assistance (7% down).

Calculation: If you need 5% down on $300k home = $15k.

With $10k DPA grant, you only need $5k cash.

Average combined assistance covers 70-90% of down payment for qualified buyers.

Maximum found: Some California programs provide up to $150k DPA for high-income professionals in expensive markets.

Depends on program type (2025): (1) Grants - NEVER repay if you meet occupancy requirement (typically 3-5 years primary residence).

Leave early = pro-rated repayment.

Example: $10k grant, 5-year requirement, leave year 3 = repay $4k. (2) Forgivable Loans - forgiven over time if you stay.

Example: $15k loan, 1/5 forgiven per year = $0 balance after 5 years.

Sell year 3 = repay $6k remaining. (3) Deferred Payment Loans - repay when you sell, refinance, or pay off first mortgage.

No monthly payments, 0% interest.

Example: $12k deferred loan, sell after 7 years for $50k profit = repay $12k from proceeds. (4) Low-Interest Loans - monthly payments at 1-3% rate.

Example: $10k at 2% over 10 years = $92/month. (5) Recapture Tax - some programs (HFA Hardest Hit) may require repaying from sale profit if home appreciates significantly and income rises.

Rule of thumb: 80% of DPA programs are grants or forgivable loans requiring no repayment if you stay 5+ years.

Always read program recapture policy before accepting.

Yes! (2025 rules): FHA loans (3.5% down) + DPA = most popular combo.

FHA allows: (1) Gift funds from family/employers for entire down payment. (2) State/local DPA grants - can cover full 3.5% down. (3) Forgivable second mortgages. (4) Seller concessions up to 6% of purchase price for closing costs.

Example: $250k FHA purchase, 3.5% down = $8,750.

Use $8k state grant + $750 cash = done.

Total out-of-pocket: $750 + $3k closing costs = $3,750 (seller pays $6k closing costs via concession).

VA loans (0% down) + DPA = even better.

VA allows: (1) 0% down payment (no DPA needed for down). (2) DPA grants for closing costs (2-3% of price). (3) Seller concessions up to 4%.

Example: $300k VA purchase, $0 down, $6k closing costs.

Use $5k DPA grant + $4k seller concession = only $0 out of pocket theoretically (some lenders require $1-2k reserves).

Conventional loans + DPA: Allowed but fewer programs accept conventional.

Most DPA requires FHA/VA.

Exception: Freddie Mac Home Possible, Fannie Mae HomeReady allow DPA with 3% down conventional.

2025 application process (6 steps): (1) Check Eligibility - use HUD.gov local office locator or state HFA website (e.g., CalHFA.ca.gov for California).

Enter income, location, first-time status.

Most programs require <100-120% AMI + credit 580+. (2) Complete Homebuyer Education - required 8-hour course ($50-100) online or in-person via HUD-approved counselor.

Get certificate of completion. (3) Get Pre-Approved - work with DPA-approved lender (not all lenders process DPA).

Lender verifies income, credit, and coordinates DPA with first mortgage. (4) Find Home - within price limits (usually FHA loan limit $498k standard, $1.15M high-cost).

Must pass FHA appraisal if using FHA loan. (5) Apply for DPA - lender submits DPA application to program (city/county/state agency).

Processing takes 7-30 days.

Provide: paystubs, tax returns, bank statements, purchase contract. (6) Close - DPA funds added to HUD-1 settlement.

Second lien recorded for forgivable/deferred loans.

Timeline: Start to close = 45-60 days with DPA vs 30 days standard.

Find programs: HUD.gov (federal), DownPaymentResource.com (database of 2,500+ programs), state HFA websites, local housing authorities.