Down payment assistance programs

{{whyLabel}}: Most Down Payment Assistance (DPA) programs require a minimum credit score, typically between 620 and 640.

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• Access your score via your bank's app or a free service like Credit Karma.
• Ensure you are looking at the FICO score, as this is what mortgage lenders use.
• Identify any errors that need disputing to boost your score quickly.

{{doneWhenLabel}}: You have a documented credit score and know if you meet the 620+ threshold.

{{whyLabel}}: Lenders and DPA providers limit how much of your income can go toward debt, usually capping it at 43-45%.

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• Add up all monthly debt payments (car loans, student loans, credit card minimums).
• Divide this total by your gross monthly income (before taxes).
• Aim for a ratio below 36% for the best program availability.

{{doneWhenLabel}}: You have a calculated DTI percentage to share with lenders.

{{whyLabel}}: HFAs are the primary state-run organizations that manage DPA funds and set eligibility rules.

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• Visit the National Council of State Housing Agencies (NCSHA) website at ncsha.org/find-your-hfa.
• Select your state to find the official government-backed housing agency.
• Bookmark the 'Homebuyer' or 'Down Payment Assistance' section of their site.

{{doneWhenLabel}}: You have identified the official state agency responsible for DPA.

{{whyLabel}}: Understanding the repayment terms prevents unexpected debt or tax implications later.

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• Look for 'Grants' which typically do not require repayment.
• Identify 'Forgivable Loans' (Second Mortgages) which are erased if you live in the home for a set period (e.g., 5-10 years).
• Note 'Deferred-Payment Loans' which must be repaid only when you sell or refinance.

{{doneWhenLabel}}: You have a list of 2-3 preferred program types from your state HFA.

{{whyLabel}}: Many cities (e.g., 'Community Development Block Grants') offer additional funds that can be layered on top of state programs.

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• Search '[Your City/County Name] + Down Payment Assistance'.
• Look for 'HUD-funded' local programs or 'Teacher/First Responder' specific incentives.
• Verify if these programs require you to live in a specific 'target area'.

{{doneWhenLabel}}: You have confirmed if local-level funding is available in your specific area.

{{whyLabel}}: Almost all DPA programs require a certificate of completion from a government-approved counseling agency.

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• Go to the HUD.gov website and search for 'Housing Counseling Agencies'.
• Choose an online provider like 'Framework' or 'eHome America' if permitted by your state program.
• Complete the 4-8 hour course covering budgeting, mortgages, and home maintenance.

{{doneWhenLabel}}: You have a certificate of completion for homebuyer education.

{{whyLabel}}: Not all banks work with DPA programs; you must use a lender specifically approved by the state HFA.

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• Download the 'Participating Lender List' from your state HFA website.
• Contact at least three lenders from this list to compare interest rates.
• Explicitly state: 'I am interested in the [State Program Name] down payment assistance.'

{{doneWhenLabel}}: You have a list of 3 lenders who confirmed they can process your chosen DPA.

{{whyLabel}}: A pre-approval proves you are a serious buyer and confirms the maximum home price you can afford with the DPA.

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• Submit your tax returns (last 2 years), W-2s, and bank statements to your chosen lender.
• Ensure the lender includes the DPA amount in your 'Estimated Cash to Close'.
• Ask for a 'Loan Estimate' to see the impact of the DPA on your interest rate.

{{doneWhenLabel}}: You hold a formal pre-approval letter mentioning the assistance funds.

{{whyLabel}}: You must verify that the assistance funds are correctly applied to your closing costs before signing.

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• Receive the CD from your lender 3 days before closing.
• Look at 'Section L' (Calculations) to see the DPA amount listed as a credit.
• Confirm the interest rate matches your initial Loan Estimate.

{{doneWhenLabel}}: You have verified that the DPA funds are accurately reflected on your final legal documents.