Down payment assistance helps first-time home buyers come up with a down payment to purchase a home and begin building wealth through homeownership. Down payment assistance takes multiple forms, including loans, grants, vouchers and more. Assistance amounts can range from a few thousand to tens of thousands of dollars, and can be used toward closing cost assistance, and/or principal or down payment reductions.

Down payment assistance (DPA) programs are loans and grants aimed at assisting homebuyers with their down payment expenses. Down payment assistance programs are offered by local or state housing authorities and non-profit organizations. They work in conjunction with loan programs like those offered by the Federal Housing Administration (FHA), where you can put as little as 3.5% down. They’re also compatible with VA, USDA, and conventional loan types. There are also lenders that specialize in down payment assistance programs who work with state or local housing agencies, or they may offer their own down payment assistance programs.

To qualify for down payment assistance, you must have not owned a home in the past three years. You must also show proof of a credit score 620 or higher, a steady income, and a healthy debt-to-income ratio.

Individual programs may have more eligibility requirements, like that you must remain in the home for a specified period of time, ranging from as little as three years up to 10 years. Some programs are limited to certain geographic areas, which could affect your eligibility. You also may be required to take an educational course.

Yes, it’s possible to qualify for more than one down payment assistance program. For example, FHA loans, which are popular with first-time buyers, can also be combined with a down payment assistance program, helping offset financial requirements about down payment and mortgage insurance premiums.

There are multiple types of down payment assistance that may be available to you, depending on your location and financial situation. Here are a few key types.

Down payment assistance grants require no repayment. They’re typically government-funded, local- or state-run programs that subsidize part of the down payment for eligible buyers. They’re usually only available to first-time home buyers and require you to remain in your home for a set number of years before selling. If you do sell your home before the agreed-upon period of time, you’ll have to pay back the grant amount upon closing.

As the name implies, this type of loan, which is structured as a second mortgage, doesn’t have to be repaid unless you sell before an agreed-upon number of years. These loans have 0% interest, meaning you’ll just make a principal payment each month.

This type of loan covers a portion of your down payment. Also structured as a second mortgage with 0% interest, it gets repaid when you sell or refinance your mortgage.

This is a second mortgage with a low or no-interest rate. You open it when you get your first mortgage, and it covers the cost of your down payment. It gets repaid monthly over time, just like your first mortgage, but usually with a very low interest rate.

Offered by some banks, government agencies or community organizations, this program will match your down payment dollar for dollar. So, if you have $20,000 to put down on the purchase of a home, it will be matched by another $20,000.