First time homebuyer and down payment assistance programs may help reduce upfront costs with low down payment options, grants, or deferred assistance. If saving for a down payment feels like the biggest hurdle, these programs can help you buy sooner and with more confidence, with clear guidance from pre approval to closing.
First-Time Homebuyer and Down Payment Assistance (DPA) Loans help make homeownership more accessible by offering financial aid for down payments and closing costs. These programs are designed for new buyers who need extra support in affording a home and often come in the form of grants, second mortgages, or forgivable loans.
These programs are ideal for first-time buyers, individuals who haven’t owned a home in the past three years, and those with limited savings. Many DPA programs also cater to teachers, healthcare workers, and public service employees. If you’re struggling to afford a down payment but have steady income and credit, a DPA loan may be a great option.
DPA programs provide financial assistance through grants or low-interest second mortgages that cover down payments and closing costs. Some programs require repayment, while others are forgivable after a set number of years. Eligibility typically depends on income, credit score, and property location.
DPA funds can often be used with popular mortgage loan programs. FHA loans allow down payments as low as 3.5 percent, making them a great option for first-time buyers. VA loans provide zero down payment options for eligible veterans and active-duty military members. USDA loans offer 100 percent financing for homes in designated rural areas. Conventional loans, such as Fannie Mae’s HomeReady and Freddie Mac’s Home Possible programs, allow as little as 3 percent down.
These programs reduce upfront costs, making homeownership more accessible. Some offer forgivable assistance, meaning you won’t have to repay the funds if you meet residency requirements. Others provide flexible credit requirements and lower interest rates than traditional loans. By lowering the financial barriers to homeownership, DPA loans help buyers purchase a home sooner.
If saving for a down payment is the biggest obstacle to buying a home, a DPA loan can provide the financial help you need. These programs are designed to assist qualified buyers with securing a home loan while keeping upfront costs low. If you’re unsure whether you qualify, speaking with a mortgage expert can help determine the right solution for your situation.
Jon Shrum, President of KMC Financial and Team Shrum, guides first time buyers through every step of the process with patience and clear advice. He helps you explore low down payment and down payment assistance options, explains costs upfront, and makes sure there are no surprises. With a supportive, relationship first approach, Jon makes buying your first home feel simple and achievable.
Coordinate the mortgage, assistance application and household cash budget. Confirm the terms before counting on funds for a California purchase.
Compare eligible conventional, FHA, VA or USDA options based on your finances and the property. First-time status does not create a universal loan type. Assistance must be compatible with the selected first mortgage, so the two decisions need to be reviewed together.
Provide the relevant ownership history for applicants and spouses as the program requires. Some definitions use a three-year principal-residence lookback; other rules and exceptions exist. Have the exact criteria checked before assuming that earlier ownership qualifies or disqualifies the household.
CalHFA MyHome is a deferred-payment junior loan with an eligible CalHFA first mortgage, subject to its requirements. It is not an unrestricted cash gift. Confirm funding, education, interest and repayment terms with a participating lender before relying on it.
Income and property limits, approved lender participation, education and separate documentation can apply. Funding also needs confirmation. Ask who needs to complete each step and when, so the purchase schedule accounts for both the mortgage and assistance reviews.
Sometimes they reduce it, but permitted amounts and uses depend on the rules and transaction. Some costs or required contributions can remain. Request an itemized cash-to-close statement that shows each source and avoids counting the same expense twice.
Read the assistance agreement for sale, refinance, occupancy and forgiveness provisions. No monthly payment does not necessarily mean no repayment later. Compare the assisted arrangement with an eligible unassisted loan, including the first-mortgage rate and the expected time in the home.
Information checked September 6, 2026. Sources: CalHFA: MyHome assistance · CFPB: Mortgage costs · CFPB: Types of loans.
Team Shrum, KMC Financial and ARBOR Financial Group are not affiliated with any government agency. HUD, FHA, VA and USDA did not distribute or approve this material. Down payment assistance program availability, amounts and eligibility vary by program and location and are subject to change.
