The biggest myth in home buying is that you need 20% saved up. You do not. And if the down payment is what has been keeping you on the sidelines, down payment assistance (DPA) might be the thing that gets you off them.
What is down payment assistance?
DPA is money that helps cover your down payment, your closing costs, or both. It comes through a second loan layered on top of your main mortgage, or as help with closing costs.
With our program, assistance can be up to 5% of the purchase price. On a $350,000 home, that is up to $17,500. Not pocket change.
Who qualifies?
Here is the part that surprises people.
- No first-time-buyer requirement. If you have owned before, you may still qualify.
- No income cap. Plenty of assistance programs shut out people who earn “too much.” This one does not.
You still need to qualify for the main mortgage, of course. Assistance does not replace that. It just reduces how much cash you need to bring.
The three types
1. Five-year forgivable second
This is a second loan that gets forgiven over five years. Stay in the home that long, and you never pay it back. There is no extra monthly payment on the assistance.
Good for: buyers who plan to stay at least five years.
Watch out for: selling or refinancing before the five years are up. You may owe some of it back.
2. Thirty-year repayable second
This is a second loan that you pay back over 30 years. It is a real loan with a real payment, but it gives you more flexibility if your plans might change.
Good for: buyers who might move or refinance sooner, or who want up-front help without a five-year commitment.
Watch out for: the second payment each month. Make sure it fits your budget.
3. Closing-cost assistance
Instead of helping with the down payment, this covers some of your closing costs. Those costs, such as title fees, lender fees, and prepaid items, add up fast.
Good for: buyers who have a down payment ready but are short on cash for everything else.
How to pick
Ask yourself three questions:
- How long will I stay? Five years or more points toward forgivable. Less or unsure points toward repayable.
- How tight is my monthly budget? A repayable second adds a payment. Forgivable does not.
- Where is my cash short? Down payment or closing costs? That decides between the first two options and closing-cost help.
If that feels like a lot, it is a ten-minute conversation. I will walk through your numbers and tell you which one makes the most sense.
What DPA can be paired with
Assistance is used alongside a regular mortgage. Depending on the situation, that might be FHA, which takes 3.5% down, or Conventional, which starts at 3% down. Which pairing works best depends on your credit, your income, and the home you are buying.
What it does not do
DPA does not mean free money with no strings. Each option has rules, and the main mortgage still has to work for your budget. A smaller down payment can also mean a bigger loan, which can mean higher monthly payments or mortgage insurance. That is why the numbers matter more than the headline.
Common questions
Does it slow down closing? Homes can still close in as little as 14 days. Get your documents in early and it moves along.
Can I use it for any home? Property types and locations can matter. Send me the address and I will check.
Do I need perfect credit? No. Different loan programs have different credit guidelines, and we will match you to the one that fits.
Is there a cost to ask? No. Asking is free.
A realistic example
Say you are buying a $300,000 home. A 5% assistance amount would be $15,000. With an FHA loan at 3.5% down, that $15,000 could cover the down payment and put some toward closing costs, depending on the program structure. That means a buyer who thought they needed $20,000 saved might need far less.
The details change with every deal. That is why I run the numbers on the actual house, not a general example.
Next step
Text me at (817) 697-4281 or tap See what I qualify for. Send me your price range and I will tell you how much assistance could make sense for you.
Néstor Caussade, NMLS #1538512, DFW Mortgage Pros
