What’s Your Type (Down Payment Assistance)

Down payment assistance (DPA) is a type of financial aid that helps homebuyers cover a portion of the out-of-pocket costs required by a lender to obtain a mortgage loan to purchase a home.  These are the major types of DPA available to homebuyers:   

1. Grant-cash provided by a lender for down payment and closing costs with no requirement for 

     repayment,

2. Loan-second mortgage that is paid monthly along with the primary mortgage,

3. Deferred loan-a second mortgage with a deferred payment that only must be paid when the

     buyer moves, sells, or refinances,

4. Forgivable loan-a second mortgage that is forgiven over a set number of years (often 5, 15, or

    or 20) and needs to be repaid if the buyer moves, sells, or refinances too early,

5. Employer Assistance-help with a down payment, either through a loan or a direct payment,

6. Family Gift-cash provided by a family member.

Providers of DPA include financial institutions, non-profit organizations, federal, state and local governments as well as employers, friends and family.