Down Payment Assistance Programs and Grants for Each U.S. State

Last Updated on September 18, 2024 by Luke Feldbrugge

Exploring down payment assistance programs can be a game-changer if you are a potential homebuyer who is struggling to save enough money for a down payment. This comprehensive guide offers state-by-state insights and important details on various down payment assistance programs, grants, home buying programs and specific loan types designed to assist potential home buyers in their pursuit of becoming a homeowner.

Key Takeaways:

• Down payment assistance programs (DPA) are primarily tailored to support first-time home buyers, and low-to-moderate-income homebuyers.
• Assistance varies widely, including grants, forgivable loans, deferred payment loans, low-interest loans, and matching savings plans, each with specific eligibility criteria.
• Specific state and local down payment assistance programs provide a range of assistance, highlighting the importance of local research, and working with a local real estate agent and loan officer.
• Homes for Heroes delivers exceptional savings on home purchases for firefighters, EMS, law enforcement, active duty and veteran military members, healthcare professionals and teachers. The savings they provide is in addition to other down payment assistance programs you may use.

What are down payment assistance programs, and how can they valuable to a potential homebuyer? Down payment assistance programs (DPAs) are designed to help eligible homebuyers cover the initial costs of purchasing a home. These programs aim to make homeownership more accessible and affordable by offering grants, loans, and other forms of assistance that reduce some of the costs. Many are specifically tailored to first-time buyers and low-to-moderate-income earners.

There are other programs that can help with your down payment, but they are government-backed mortgage loan guarantees and they are technically different from the down payment assistance programs that are located throughout the U.S. With two of these programs you can eliminate the down payment: VA loans and USDA loans. There are also ways to reduce your down payment through FHA loans.

Instead, here we are going to focus on specific down payment assistance initiatives.

General Qualifications for Down Payment Assistance Programs

DPA programs are designed to aid potential homeowners, especially a first-time home buyer who might struggle to save the necessary funds for a down payment. These programs can reduce the upfront financial burden and make homeownership more accessible.

For those who owned a home before but have not owned one in the last three years, many programs see these individuals as first-time buyers too. If you are in this group and just beginning to think about a home, a mortgage and your down payment, we have a blog article dedicated specifically to you.

Other factors that may, or may, not be part of the eligibility requirements include:

• Credit Score – You will see a lot of numbers, but minimum credit scores are about 620, give or take a bit.
• Primary residence – Most DPA program requirements want you to live in the house you are buying. That usually means no second homes, no investment properties and no vacation homes.
• Income limits – Since these programs are designed for lower and middle income families, there are often caps on how much household income your family can earn per year and still be eligible. You can make too much money for many of these programs.
• Debt to Income ratio – This is a common number in the world of mortgages, and it is a measure of your monthly income and how much (as a percentage) of that income is dedicated to debts like rent, credit cards, car payments, etc.
• Time in residence – Some DPA programs want you to stay in the house you buy for a number of years. In a New York City program, for example, you need to stay in your house for 10-15 years, but the assistance can be upwards of $100,000.
• Mortgage loan limits – Many local DPA programs will have upper limits on the mortgage they are helping you with. If you are looking at million dollar McMansions, you may not get down payment assistance.

A lot of the factors that affect your eligibility for DPA programs mirror the kinds of things a bank or mortgage lender would require of you if you were getting a conventional loan.

Not a DPA, but instead another potential source of savings is Homes for Heroes. They assist firefighters, EMS, law enforcement, active military and veterans, healthcare workers and teachers; buy, sell and refinance their home or mortgage. If you close on a home using their local specialists the average savings received is $3,000, or $6,000 if you buy and sell! AND, the savings offered by Homes for Heroes would potentially be in addition to the DPA programs you may qualify to receive.

Simply sign up to speak with a member of the Homes for Heroes team. There’s no obligation.

Types of Down Payment Assistance  Programs

Down Payment Grants

Grants are gifts of money that do not need to be repaid, making them an incredibly appealing option. They’re usually offered by state or local government agencies, and nonprofit organizations. A down payment assistance grant may come with certain conditions, such as living in the home for a specific period or attending homeowner’s education classes.

An example of one grant program is the National Homebuyers Fund.

Forgivable Loans

These are loans that don’t need to be repaid if you fulfill certain requirements, such as living in the house for a specified period of time. However, if you sell the home before the end of the life of the loan, you may have to repay part or all of the DPA loan.

The Maryland Mortgage Program is a good example of a forgivable loan.

Deferred Payment Loans

These loans, also called second mortgage loans, require no payments until the homeowner sells, refinances, or pays off the house. While attractive, these loans often have a cumulative interest, which could lead to a significant payment down the road. The idea here is that once you build up some home equity, you will be able to easily pay off the loan and its accumulated interest. This is a get-your-foot-in-the-door strategy for funding your down payment.

An example of one of these loans is the Minnesota Start Up program.

Low-Interest Loans

Low-interest loans provide funds at a reduced interest rate, making repayments more manageable. However, keep in mind that even a low-interest loan is still a conventional loan, and it adds to your overall debt and monthly payments. These low-interest loans typically come from private mortgage lenders or banks.

Remember to check with your mortgage lender before you decide to pursue this path. How much debt you take on in order to get the down payment, and eventually, the mortgage loan will be one of their concerns.

Matching Savings Plans

These are programs where the agency matches the amount of money you save towards your down payment. While encouraging savings, these programs often have strict criteria for qualification and limits on the match amount.

The FDIC, for example, offers Individual Development Accounts that are matched savings accounts. In this case, the one drawback is the matching plan can take between 12 and 36 months to complete, so if you are in a hurry, this might not work.

Down Payment Assistance Programs by State

In this section, we’ll provide a comprehensive list of DPA programs available in each state, including details on the types of aid. In most cases, through our research, we have tried to list some of the aid in actual dollars or percentages.

It’s important to remember that for many programs, these funds can run out before the end of the year, so they encourage you to apply early. There are also states that have multiple DPA programs running at the same time, so it pays to dig deeper (e.g. at the county or city level) if you don’t find something right away.

Alabama: The Alabama Housing Finance Authority offers house down payment assistance to eligible buyers through its Step Up program. The Step Up program offers a 3% down payment assistance for those with income less than $97,300 and buying a house that doesn’t exceed $250,000.

Alaska: The Alaska Housing Finance Corporation offers several DPA programs, including the Closing Cost Assistance Program and the Home Opportunity Program. The down payment assistance is for low income or to moderate income individuals and families.

Arizona: The Arizona Department of Housing offers down payment assistance through its Home Plus program. The program provides a 30-year fixed-rate mortgage and up to 5% of the loan amount in down payment assistance.

Arkansas: The Arkansas Development Finance Authority offers DPA through its Home to Own program. The program provides up to 6% (up to $10,000) of the home purchase price in down payment assistance and closing costs.

California: The California Housing Finance Agency offers several DPA, including the MyHome Assistance Program and the School Teacher and Employee Assistance Program. The MyHome Assistance Program provides applicants with a deferred-payment junior loan up to 3.5% of the purchase price or appraised value to assist with down payment and/or closing costs.

Colorado: The Colorado Housing Assistance Corporation offers help through its CHAC Down Payment Assistance Program. The program provides up to $7,500 in down payment assistance. Another Colorado program, the CHFA Advantage program provides down payment assistance up to 4% of your first mortgage, with no mortgage insurance required.

Connecticut: The Connecticut Housing Finance Authority offers DPA through its Homebuyer Mortgage Program. Their DPA offers a second mortgage loan for up to 3.5% of the sales price to eligible first-time eligible homebuyers.

Delaware: The Delaware State Housing Authority has its Preferred Plus program. The program provides up to 4% of the purchase price in down payment assistance.

Florida: The Florida Housing Finance Corporation provides DPA through its Florida Assist program. The program provides up to $7,500 in down payment assistance and closing cost assistance in the form of a grant that does not need to be repaid.

Georgia: The Georgia Dream Homeownership Program offers up to $5,000 in down payment assistance.

Hawaii: The Hawaii HomeOwnership Center offers DPA through its Down Payment Assistance Loan Program. The program provides loans up to $75,000 in down payment assistance. Another program, the Honolulu Down Payment Loan Program provides applicants up to $40,000 in assistance funds in the form of a zero-fee, zero-interest loan with a 20-year amortization term.

Idaho: The Idaho Housing and Finance Association provides a down payment assistance program and gives homebuyers up to 10% of the sales price of the home to use towards the down payment and/or closing costs. The help is in the form of a second mortgage which is forgivable down payment assistance.

Illinois: The Illinois Housing Development Authority offers DPA through its Access program. The program provides up to 4% or $6,000 in down payment assistance. The assistance is a recorded forgivable 2nd mortgage.

Indiana: The Indiana Housing and Community Development Authority offers down payment assistance through its Next Home program. The program provides up to 3.5% of the purchase price in down payment assistance.

Iowa: The Iowa Finance Authority offers DPA through its FirstHome program. The program provides up to $5,000 in down payment assistance, and the assistance is a grant, meaning it doesn’t have to be repaid.

Kansas: The Kansas Housing Resources Corporation offers down payment assistance through its First Time Homebuyer Program. It offers homebuyers a 0% interest loan in the amount of 15 or 20% of the home’s purchase price. If the homebuyer remains in the home for 10 years, the loan is forgiven.

Kentucky: The Kentucky Housing Corporation offers DPA through its Homebuyer Tax Credit program. The program provides up to $10,000 in down payment assistance in the form of a low interest loan which needs to be paid back in 10 years.

Louisiana: The Louisiana Housing Corporation offers down payment assistance through its Market Rate GNMA program. The program provides up to 4% of the purchase price in down payment assistance (including closing costs).

Maine: The MaineHousing offers DPA through its First Home Loan program. The program provides up to $3,500 in down payment assistance and closing costs.

Maryland: The Maryland Department of Housing and Community Development offers down payment assistance through its Maryland Mortgage Program. The program provides up to 4% of the purchase price in down payment assistance. This aid is in the form of loans, some of which can be forgiven.

Massachusetts: The MassHousing Down Payment Assistance program provides between $30,000 and $50,000 in assistance. The down payment aid can be in the form of a deferred payment second mortgage or 15-year low interest loan.

Michigan: The Michigan State Housing Development Authority (MIHAF) offers a MI 10K DPA loan up to $10,000 and its available statewide. Taking a housing education class is required.

Minnesota: The Minnesota Housing Finance Agency offers down payment assistance loans that range from $3,000 to $10,000.

Mississippi: The Mississippi Home Corporation offers DPA through its Home Saver program. The program provides up to $6,000 in down payment assistance.

Missouri: The Missouri Housing Development Commission offers down payment assistance for first-time homebuyers. They can receive a forgivable second mortgage of 4% percent of the loan. It can be used for down-payment and closing costs.

Montana: The Montana Board of Housing offers DPA through its Homebuyer Assistance Program. The program provides a loan of up to $15,000, or 5% of the home’s price, in down payment assistance.

Nebraska: The Nebraska Investment Finance Authority offers down payment assistance through its First Home program. The program provides up to 5% of the home’s purchase price in down payment assistance. This assistance is low interest loan and must be paid back.

Nevada: The Nevada Housing Division offers DPA through its Home is Possible program. The program provides up to 5% of the loan amount in down payment assistance.

New Hampshire: The New Hampshire Housing Finance Authority offers down payment assistance through its Home Flex Plus program. The program provides up to $15,000 in down payment assistance.

New Jersey: The New Jersey Housing and Mortgage Finance Agency offers DPA through its Smart Start program. The program provides up to $10,000 in down payment assistance, which is second mortgage and is forgiven in full after four years.

New Mexico: The New Mexico Mortgage Finance Authority offers down payment assistance through its First Home program. The program provides a loan up to $7,000 , with a 0 percent interest rate and the loan may be forgiven after 10 years.

New York: The State of New York Mortgage Agency provides up to 3% (maximum $15,000) of the home’s price in DPA. The loan is 0% interest rate, requires no monthly payments and is forgiven after 10 years.

North Carolina: The North Carolina Housing Finance Agency offers down payment assistance through its NC Home Advantage Mortgage program. The program provides up to $15,000 (or 3%) of the loan amount in down payment assistance.

North Dakota: The North Dakota Housing Finance Agency offers DPA through its ND Roots program. The program provides up to 3% of the purchase price in down payment assistance.

Ohio: The Ohio Housing Finance Agency offers down payment assistance through its Your Choice! Down Payment Assistance program. The program provides 2.5% to 5% of the purchase price in down payment assistance. This assistance is forgiven after seven years.

Oklahoma: The Oklahoma Housing Finance Agency offers DPA through its OHFA Advantage program. The program provides up to 3.5% of the loan amount in down payment assistance.

Oregon: The Oregon Housing and Community Services offers down payment assistance through its Oregon Bond Residential Loan Program. Funds may be used for up to 100% of the borrower’s cash requirement to close, including down payment, closing costs, and more.

Pennsylvania: The Pennsylvania Housing Finance Agency offers DPA through its Keystone Home Loan PLUS program. The program provides up to 5% of the home’s purchase price in down payment assistance. The loan is forgiven on an annual basis over ten years at a rate of ten percent (10%) a year.

Rhode Island: The Rhode Island Housing offers down payment assistance through its First Down program. The program provides a grant up to $17,500 in down payment assistance.

South Carolina: The South Carolina State Housing Finance and Development Authority offers forgivable DPA to all qualified borrowers. DPA may be used towards a borrower’s down payment, closing costs and/or prepaid items. It also provides $10,000 down payment assistance through its Palmetto Heroes program, which serves the same hero groups that we serve at Homes for Heroes.

South Dakota: The South Dakota Housing Development Authority offers down payment assistance through its First-time Homebuyer program. The program provides from 3% to 5% in down payment assistance through a loan that is 0% interest rate, due-on-sale or satisfaction, with no payments.

Tennessee: The Tennessee Housing Development Agency offers DPA through its Great Choice Plus program. The program provides up to 6% of the loan amount, or $6,000, depending on which program you choose.

Texas: The Texas Department of Housing and Community Affairs offers down payment assistance through its My First Texas Home program. The program provides up to 5% of the loan amount in down payment assistance.

Utah: The Utah Housing Corporation has its Down Payment Assistance program. You may be able to borrow your entire minimum required down payment plus all or a portion of your closing costs on a 30-year fixed-rate second mortgage.

Vermont: The Vermont Housing Finance Agency offers DPA through its ASSIST program. The program provides up to $15,000 in down payment assistance.

Virginia: The Virginia Housing Development Authority offers a DPA grant that you don’t have to pay back.

Washington: The Washington State Housing Finance Commission offers DPA through its Home Advantage program. The program provides up to 4% of the loan amount in down payment assistance.

West Virginia: The West Virginia Housing Development Fund offers DPA through its Homeownership Program. The program provides between $5,000 and $10,000 in down payment assistance, depending on the program and purchase price of the home.

Wisconsin: The Wisconsin Housing and Economic Development Authority offers DPA through its WHEDA Advantage program.

Wyoming: The Wyoming Community Development Authority offers its Home Again program. Wyoming provides a low-interest down payment loan of up to $15,000.

More Savings Potential: Receive an Average of $3,000 from Homes for Heroes

In addition to these down payment assistance programs in your local market, Homes for Heroes assists firefighters, EMS, law enforcement, active military and veterans, healthcare workers and teachers; buy, sell and refinance their home or mortgage. But if you work with their local real estate and mortgage specialists to buy, sell or refinance; they also provide significant savings after you close on a home or mortgage. They refer to these savings as Hero Rewards® savings, and the average amount received after closing on a home is $3,000, or $6,000 if you buy and sell!

The savings offered by Homes for Heroes would be in addition to the DPA programs you may qualify to receive. However, remember there are specific qualifications for DPA programs that may impact whether you can receive the additional Hero Rewards savings. The best way to find out is to speak with a local Homes for Heroes specialist.

Simply sign up to speak with a member of the team. There’s no obligation. After you sign up they will contact you to ask a few questions and help you determine the appropriate next steps for you. When you’re ready, they will connect you with their local real estate and/or mortgage specialists in your area to assist you through every step and save you money when it’s all done.

It is how Homes for Heroes and their local specialists thank community heroes like you, for your dedicated and valuable service.

IMPORTANT DISCLAIMER:

This post was last updated in September 2023. Many of these programs change every year – some can be discontinued – without notifying Homes for Heroes. This is the best information we had when this was posted, and we hope it provides insight about potential DPA programs in your area. As always, conduct your own independent research and contact the DPA program directly to determine if these programs are a good fit for your needs.