One of the most difficult hurdles to overcome for first-time homebuyers is the down payment. This lump sum of cash is a tangible barrier that prevents many prospective buyers from purchasing a home. With the escalation in home prices and the average down payment being 6% to 20% of the purchase price, the up-front cash total can make houses unaffordable. However, there are options to help bridge this financial gap: Down Payment Assistance Programs (DPAs).

DPAs exist to help overcome down payment problems. They are programs offered by various agencies and government bodies that cover down payment costs. DPAs come in different kinds of loans and grants and can be especially helpful for first-time homebuyers. 

The challenge is finding applicable programs. There’s no centralized down payment assistance program in the United States, which makes the quest more difficult. To find a loan you qualify for, you must research what local agencies and programs offer DPAs. But our research should serve as a first step in finding the right DPA program for your next home purchase. 

Jump To: Typical Down Payment Amount | Types of Down Payment Assistance Programs | Who Qualifies for Down Payment Assistance? | What are FHA and VA Loans? | How Can I Find Down Payment Assistance?

What Is a Typical Down Payment on a House in 2023?

It’s easy to get overwhelmed if you’re looking for a house in our current housing market. Inflation is up, mortgage interest rates are at their highest peak since the early 2000s, long-distance moves can cost thousands, and housing prices seem to fluctuate every month. Entering the housing market can feel like stepping into a tornado. Thankfully, there’s hope and plenty of programs to aid in weathering the storm.

While home prices vary by state and county, the average U.S. home cost is around $460,000. Down payments are calculated from the sale price, so we’ll use this number as the baseline for determining the national average down payment price. 

Next, we must consider how much you should pay for a down payment. While 20% down will let you avoid the monthly cost of private mortgage insurance (saving you money throughout the life of your mortgage), 20% down in our example winds up at $92,000. That’s a total that’s outside the budget for most Americans. According to the National Association of Realtors (NAR), a more feasible down payment is 6% to 7%. At 6%, you’re instead looking at a downpayment of $27,600. This may still be expensive for many potential homebuyers, but it’s much more manageable $92,000. 

Types of Down Payment Assistance

While DPA programs vary, they can all be grouped into one of three different categories: grants, forgivable loans, and deferred payment loans. Each has advantages, disadvantages, and qualification requirements. 


Grants are some of the most common and beneficial kinds of down payment assistance. Grant programs provide lump sums of cash awarded to potential home buyers specifically for the purpose of covering down payment costs (and sometimes closing costs). The great part? rants never need to be repaid. 

However, because these programs are designed to help neighborhoods grow, they often come with the stipulation of requiring the homeowner to remain in their new home for five or more years. And some less-honest agencies will label programs as grants while really offering loans or creating liens on homes. Carefully read the terms and conditions of any DPA program before you sign up. 

Forgivable Loans

Forgivable loans are a form of a second mortgage, or lien, that lets you borrow against your home to cover closing down payments. These loans have three major advantages:

  • They come with 0% interest, making them highly affordable
  • They’re forgiven if you stay in your home for a specific period, typically five years, but up to 20
  • Unlike other DPAs, which typically only cover a portion of your down payment, forgivable loans are large enough to usually cover an entire down payment 

The one downside to these loans is that if you move or refinance, you must repay a portion of the loan. In other words, these loans are most valuable to people who intend on staying in their home for the long haul. 

Deferred Payment Loans

Deferred payment loans are another type of second mortgage but one you won’t have to pay back until certain criteria get met. Like forgivable loans, deferred payment loans sometimes can cover closing costs, making them attractive in the short term. Plus, these loans typically have a low-interest rate, with some lenders even offering 0% interest. 

When taking out a deferred payment loan, you won’t have to worry about paying it back until you refinance your home, move, sell, or pay off your initial mortgage.  

Who Qualifies for Down Payment Assistance?

Each down payment assistance program possesses specific qualifications. But there are some similarities. They typically carry one or all of the following requirements:

  • The recipient must be a first-time homeowner (or have not owned a home in three years).
  • The home must be the borrower’s primary residence. 
  • The borrower must use a pre-approved mortgage program. 
  • The borrower must meet minimum credit score and debt-to-income requirements.
  • The home must be located in the county or region where the loan was taken out. 
  • The borrower must live in the home for a set number of years, typically between five to 10 years, although some loans can require a 20-year residency. 
  • The borrower must attend a basic financing and home loan class. 

What Are FHA and VA Loans?

Mortgages from the Federal Housing Administration (FHA) and U.S. Department of Veterans Affairs (VA) are two of the best to pair with a DPA program. These loans carry significant benefits but have strict qualification requirements. 

FHA Loans:

As the name suggests, these loans are insured and backed by the FHA and the Department of Housing and Urban Development (HUD). They’re designed to help low- to middle-income families afford housing. When signing up for an FHA loan, you’ll use a federally approved lender to supply the loan. Because the federal government insures the loan, the lender can offer it to borrowers with lower credit scores, at a much lower interest rate, and with a minimal down payment. 

The qualifications for FHA loans are:

  • The borrower must supply proof of income and steady employment. 
  • The borrower must have a maximum debt-to-income ratio of 43%. 
  • The home must be the borrower’s primary residence. 
  • The borrower must have a FICO score of at least 500
  • The borrower must have private mortgage insurance.

VA Loans:

Backed by VA, these loans help current and past active service members get housing. VA loans, like FHA loans, are insured by the federal government and provided through approved lending institutions. VA loans have lower interest rates, reduced closing costs, and less strict credit and debt-to-income (DTI)  requirements. The down payment for these mortgages is also low, making homes affordable when paired with DPA programs. 

To qualify for VA loans, you must:

  • Be a current active duty military service member that has served for at least 90 continuous days
  • Have served as an active duty service member, member of the national guard, or member of the reserves in the past for specific amounts of time, depending on when you served (See our VA loans page for specific time and date criteria.) 
  • Be a surviving spouse of a military service member or a spouse of a military service member who is missing in action (MIA) or being held as a prisoner of war (POW)
  • Pay a VA Loan Funding fee of 0.5% to 3.6% of the loan’s total
  • Provide proof of steady employment
  • Meet credit score requirements, although the VA doesn’t list a specific score to mee. 
  • Have a maximum DTI of 41%
  • Have the home undergo a VA home inspection and appraisal
  • Use the home as your primary residence

How Can I Find Down Payment Assistance?

Finding a DPA program can be time-consuming but productive with the right resources. Because there aren’t any federal DPAs, you must look to state programs or local agencies. For grants, the most reliable resource is the FHA website’s state database, where you can research each state’s down payment grant programs. 

Your best bet is to contact your state’s HUD agency for deferred payments and forgivable loans. Once in contact with your local branch of the HUD, you can discover lenders who offer DPA loans. 

Another way to find DPA programs is through a state Housing Financing Agency, or HFA. HFAs are independent, state-chartered agencies that help homeowners acquire affordable housing. These agencies offer various housing assistance options, typically including DPAs. To find your nearest HFA and learn more about HFAs, we recommend checking out the National Council of State Housing Agencies (NCSHA) and its state directory.

Sample Assistance Program Requirements for a Few States

Let’s look at some examples of existing DPA programs you can apply to.  Below, we’ll outline programs, along with their requirements, while detailing each step to apply.


The California Housing Financing Agency (CalHFA) offers one of California’s best DPA programs. The CalHFA has multiple loans, grants, and programs, including FHA loans, VA loans, USDA loans, and a DPA program. CalHFA has specific eligibility requirements. CalHFA doesn’t accept direct loan applications, so you will have to apply through one of its approved lenders. 

Your eligibility requirements will be the same for every lender. For loans and DPA programs, you must meet the criteria outlined under two specific categories, borrower and property eligibility.


  • You must be a first-time home buyer.
  • The property must be your primary residence, and non-occupant co-borrows are prohibited. 
  • You must complete homebuyer education counseling and receive a certificate of completion. 
  • You must fall within the strict income limits for all CalHFA loans – your limit will depend on your region, outlined in a separate PDF


  • The property must be a single-family, one-unity residence. 
  • Manufactured housing is allowed. 
  • If the property is a condominium, it must meet the requirements of the first mortgage. 

To apply, you’ll need to pick from one of CalHFA’s approved lending partners. A loan officer will want to know the specific loan you wish to apply for (in this case, a CalHFA MyHome Assistance Program). If you already completed the required mortgage class, let the agent know. 

After this, the loan officer will walk you through the required documentation for submitting your loan paperwork. These documents include proof of employment (pay stubs), recent bank statements, recent tax returns, identification documents, etc. Once collected, you can submit them with your application. Then, you wait for approval. Throughout this process, you may get asked to gather and submit more documentation or answer more questions. 


In Florida, the best DPA program is through the Florida Housing Financing Commission (Florida Housing). The state established Florida Housing in the 1980s to help residents gain access to affordable housing. Florida Housing has multiple programs available for residents, including low-interest loans and a sweeping DPA program. 

Florida Housing has two DPA programs: the Florida Assist (FL Assist) and the Florida Homeownership Loan Program (FL HLP) Second Mortgage. 

The FL Assist program is a non-forgivable, deferred payment loan that provides: 

  • Up to $10,000 in FHA, VA, USDA, and conventional loans
  • A 0%, non-amortizing, deferred second mortgage

The FL HLP is a second mortgage loan program with a 15-year term that offers:

  • $10,000 in down payment and closing cost assistance
  • A 3%, fully amortizing second mortgage

Unfortunately, these programs aren’t stand-alone assistance programs and can only be applied to Florida Housing first mortgages. To qualify for a Florida Housing mortgage, you must: 

  • Have a credit score of at least 640 
  • Obtain your mortgage from an approved lender 
  • Complete a homebuyer education course
  • Find a home that fits within county-specific price limits
  • Have an income must fall within certain county-specific limits 
  • Be a first-time homebuyer or have not owned or occupied a home within the previous three years  

If you’re qualified for the DPA program and Florida Housing FHA loan, your next step is to complete a homebuyer education course. Once you have your certificate of completion, you can contact an approved mortgage lender and realtor. Florida Housing has a Loan Program Wizard, a tool that walks you through the rest of the application process, including contacting approved lenders and real estate agents. 

North Carolina

The last real-world example we’ll look at is what the North Carolina Housing Financing Agency offers. NCHFA provides in-state residents with affordable housing through low-cost mortgages, foreclosure assistance, rental assistance contracts, and down payment assistance programs. It also creates local affordable housing by financing affordable homes and apartments as well as repairing and rehabilitating dilapidated homes. 

Like the Florida Housing DPA, the NCHFA program requires you to use one of its mortgages. But the requirements for loans and DPA programs aren’t strict, and the DPA loan is forgivable, making it one of the most attractive we’ve seen. Specifically, the standard DPA program offers assistance up to 3% of the loan amount, which is forgiven at 20% per year starting in the 11th year and is completely forgiven after 15 years. 

The standard NC 1st Home Advantage Down Payment provides $8,000 in down payment assistance. To be eligible, you must meet their standard loan requirements, be a first-time home buyer or a military veteran, and meet specific income and sales price limits.

To qualify for an NCHFA loan, you must:

  • Purchase a home in North Carolina
  • Occupy the home as your principal residence within 60 days of closing
  • Have annual income doesn’t exceed $126,000
  • Have a credit score of 640 or higher
  • Apply for an FHA, USDA, VA or conventional loan through a participating lender and meet the sales price limits for the loan type
  • Be a legal resident of the United States

Through the NCHFA, you don’t need to attend a homebuyer education course. You’re free to search for an approved lender immediately. 


Owning a home is an invaluable investment that helps contribute to generational wealth and familial success. However, economic conditions, including higher home prices and interest rates, make home purchasing more difficult because of the higher down payment requirements. Take advantage of state DPA programs to erase the down-payment burden and help you afford the house you desire.

Editorial Contributors
Sam Wasson

Sam Wasson

Staff Writer

Sam Wasson graduated from the University of Utah with a degree in Film and Media Arts with an Emphasis in Entertainment Arts and Engineering. Sam brings over four years of content writing and media production experience to the Today’s Homeowner content team. He specializes in the pest control, landscaping, and moving categories. Sam aims to answer homeowners’ difficult questions by providing well-researched, accurate, transparent, and entertaining content to Today’s Homeowner readers.

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