DPA:

Down Payment Assistance

Get year-round 3.5-5% DPA loans with no lottery waiting. Grants available for forgiveness. Cover costly closing costs.

Down Payment Assistance

Don't rely on CalHFA for assistance. Get year-round DPA loans with 3.5-5% assistance and grants that forgive!

Cover Closing Costs

DPA loans can help cover closing costs and more. Say goodbye to costly closing expenses with our assistance.

Year-Round Support

Get 3.5-5% DPA assistance year-round without waiting for winning a lottery. Say hello to stress-free home buying.

Understanding Forgivable and Repayable Down Payment Assistance (DPA)

Forgivable DPA:

Definition: A forgivable DPA is a type of loan provided as a second mortgage with no monthly payments and a 0% interest rate.
Terms: Typically structured as a 30-year term.
Forgiveness: The loan is forgiven after the borrower makes 36 consecutive on-time payments on the primary mortgage. This means the borrower does not need to repay the DPA amount if they meet the on-time payment condition.

Repayable DPA:

Definition: A repayable DPA is a type of loan provided as a second mortgage with monthly payments and an interest rate.
Terms: Often structured as a 10-year term with an interest rate 2% higher than the first mortgage.
Repayment: The borrower is required to make monthly payments on this loan until it is fully repaid. There are no income limits for eligibility.

Key Points from the DPA Reference:

Forgivable DPA:

No monthly payments.
0% interest rate.
Forgiven after 36 consecutive on-time payments.
Only available as a 3.5% assistance option.
Qualifying income must be ≤ 160% of the Area Median Income (AMI) or State Median Income (SMI), depending on the location.
Subordination is not allowed within the first 36 months.

Repayable DPA:

Monthly payments required.
10-year term with an interest rate 2% higher than the first mortgage.
Available as 3.5% or 5% assistance options.
No income limits for eligibility.

Both options aim to assist borrowers in securing the necessary funds for a down payment and/or closing costs, providing flexibility based on their financial situation and needs.

a hundred dollar bill sticking out of the back pocket of a pair of jeans

Everyone Needs a Little Help Sometimes

Why turn down a helping hand?

Our Down Payment Assistance programs are designed to give you the support you need to achieve your dream of homeownership.

Whether it's through forgivable or repayable options, we're here to provide the financial assistance that fits your situation.

Frequently Asked Questions about Down Payment Assistance (DPA) Programs

Q: What is a Down Payment Assistance (DPA) program? A: A DPA program provides financial assistance to homebuyers to help cover the down payment and/or closing costs associated with purchasing a home. These programs can be forgivable or repayable, depending on the terms and conditions.

Q: Who is eligible for DPA programs? A: Eligibility for DPA programs varies but generally includes factors such as income, credit score, and the purchase price of the home. Some programs are specifically designed for first-time homebuyers, while others are available to repeat buyers.

Q: What is the difference between forgivable and repayable DPA? A: Forgivable DPA loans do not require repayment if certain conditions are met, such as making on-time mortgage payments for a specified period. Repayable DPA loans require monthly payments over a set term, similar to a traditional loan.

Q: How much assistance can I receive through a DPA program? A: The amount of assistance varies by program. Common options include 3.5% or 5% of the home's purchase price, which can be used for the down payment and/or closing costs.

Q: Do DPA programs have income limits? A: Some DPA programs have income limits to ensure they assist those who need it most. For example, forgivable DPA programs may require qualifying income to be at or below a certain percentage of the Area Median Income (AMI).

Q: Can I use a DPA program with any type of mortgage? A: DPA programs are often used with FHA loans, but they may also be compatible with other types of mortgages, such as conventional, VA, or USDA loans. It's important to check the specific requirements of the DPA program and the mortgage type.

Q: Will using a DPA program affect my interest rate? A: The interest rate on your primary mortgage might be affected by the use of a DPA program. It's important to discuss this with your lender to understand how the DPA program might impact your overall loan terms.

Q: What happens if I sell my home before the DPA loan is forgiven? A: If you sell your home before the forgivable DPA loan term is met, you may be required to repay the remaining balance. The specifics will depend on the terms of the DPA program.

Q: How do I apply for a DPA program? A: To apply for a DPA program, you typically need to work with a lender that offers these programs. They will guide you through the application process and help you determine which DPA options you qualify for.