What is down payment assistance? It is financial help that may take the form of a grant, loan or shared-appreciation arrangement. Closing-cost assistance is related but addresses different purchase expenses. “Assistance” does not automatically mean money that never has to be repaid.
This is educational information, not lending, legal or tax advice. A participating lender and program administrator determine current eligibility and availability.
What is a grant?
A grant is assistance that generally does not require repayment when its conditions are met. The program documents establish those conditions and whether repayment can be triggered.
What are deferred-payment and forgivable loans?
A deferred-payment loan postpones required payments; it remains a loan. A forgivable loan may have some or all of its balance forgiven only after specified conditions are met. Sale, refinancing, occupancy changes or other events can affect obligations under the actual documents.
What is shared appreciation?
Shared-appreciation assistance can require repayment of the original amount plus a defined share of an increase in the home's value. The percentage, valuation method and repayment events depend on the program.
What is a junior or subordinate loan?
These terms describe a loan's position relative to another lien, commonly the first mortgage. “Silent second” commonly describes assistance with deferred payments, not a loan without obligations.
How do buyer and property eligibility differ?
Buyer eligibility can involve income, household size, homeownership history, education and occupancy. Property eligibility can involve location, price, type, condition and lender approval. Meeting one set of requirements does not establish approval of the other.
What does funding availability mean?
A listed program may not have an open application round or available funding. A lottery, waitlist or preliminary eligibility indication is not a commitment to fund a purchase. Current terms and approval must be confirmed with the administering program and participating lender.
Does assistance determine the total ownership cost?
No. Down payment and closing costs are different from ongoing mortgage payments, taxes, insurance, HOA charges, maintenance and utilities. A financing recommendation requires the buyer's specific circumstances, not just the assistance amount.