What is this guide? Down Payment Assistance (DPA) is money that can help cover your down payment and sometimes your closing costs when buying a home — but figuring out how it works can feel overwhelming. This guide breaks the entire process into two plain-language phases so you can follow along yourself, ask the right questions, and never feel lost. Phase 1 is Intake — the information-gathering stage before any applications are submitted. Phase 2 is the DPC Walkthrough — a step-by-step guide through the actual assistance process, from finding a program through closing.

Phase One

Intake

Before anyone runs your credit or submits an application, a good loan originator (and a prepared borrower) needs to gather the right information. The intake phase is like filling in the blanks before starting a puzzle — it helps everyone figure out which programs you might qualify for, and it prevents surprises later. Think of this as your prep work.

Most DPA programs don't just look at your income — they look at your whole household. That means everyone who will live in the home may be counted, even if they're not co-signing the mortgage.

Be ready to share the following for every person age 18 or older who will live in the home:

Full legal name and relationship to the borrower
Gross monthly income (before taxes) from all sources — jobs, self-employment, Social Security, child support, etc.
Employment status (full-time, part-time, seasonal, self-employed)
Whether they have owned a home in the last 3 years

Why does this matter? Some programs set income limits based on your whole household, not just the people on the loan. A partner or roommate's income could push you over an income limit — or a program may only count the borrower's income and you'd still qualify. You won't know until you gather this information.

You'll also want to collect:

Social Security numbers for all borrowers
Two years of W-2s or tax returns
Recent pay stubs (last 30 days)
Bank statements (last 2–3 months)

Down Payment Assistance comes in several forms. Before you get excited about a program, understand what you're actually getting — because the structure affects what you'll owe after closing.

Type	What it means	Do you have to pay it back?
Grant	Free money — no strings attached once you close.	No
Forgivable Loan	A loan that disappears over time (usually 3–10 years) as long as you stay in the home.	Only if you sell or move out early
Deferred Loan	No monthly payments, but you repay it when you sell, refinance, or pay off the home.	Yes — later
Second Mortgage	A regular loan with a monthly payment added on top of your first mortgage.	Yes — monthly

Layman's tip: A grant is the best-case scenario — it's genuinely free money. A forgivable loan is almost as good if you plan to stay in the home. A deferred loan is manageable but shows up when you sell. A second mortgage is the most like a regular loan.

DPA programs also come in two structural forms:

Separate 2nd mortgage: Your regular lender handles your first mortgage, and the DPA funds come as a separate second loan from a city, county, or state program.
Combined assistance loan: One lender handles both the first mortgage and the DPA in one package. Easier to manage, but fewer options for customization.

The separate 2nd mortgage can often provide a larger dollar amount and give you more flexibility. Combined loans are simpler but may have fewer program options.

This is one of the most important things to understand about DPA, and it surprises a lot of people: your DPA income limit is NOT the same as your mortgage income.

Two ways programs calculate income:

1. Household Income (used by most Bond programs)
All adults age 18+ who will live in the home are counted — even if they're not on the mortgage. This is their gross monthly income from all sources. If your adult child lives with you, their income counts.

2. Credit Qualifying Income (used by most TBA programs)
Only the borrower(s) on the mortgage application count. Non-borrowing household members' income is ignored for the income limit check.

Program Type	Whose Income Counts?	Common Examples (Florida)
Bond Programs	All household members age 18+	Florida Hometown Heroes Bond, Florida First Bond
TBA Programs	Borrower(s) on the loan only	Florida Hometown Heroes TBA, Florida First TBA

Watch out: Don't assume you make "too much" to qualify. A household that seems over the income limit under one program type may be perfectly eligible under another. Always let the loan originator run the numbers using the specific program's worksheet — not just your 1003 mortgage income.

Also note: mortgage income calculations average variable income (overtime, bonuses, commission, tips) over two years. DPA programs may count that differently. Always confirm.

Every DPA program layers additional requirements on top of your regular mortgage. Think of it as two sets of rules — you have to pass both.

Credit Score

The DPA program's minimum credit score may be higher than what your mortgage requires. For example, you might qualify for an FHA loan with a 580 score, but the DPA on top may require 620 or 640. Know your number before you search for programs.

First-Time Homebuyer Status

Many programs require that you have not owned a home in the last 3 years to be considered a "first-time" buyer. But some programs waive this for veterans, buyers in certain areas, or specific workforce groups. Don't count yourself out without checking.

Property Eligibility

Most DPA programs cover single-family homes, condos, and townhomes — but not investment properties or vacation homes.
Some programs exclude 2–4 unit properties.
New construction is sometimes allowed but may have extra conditions.
Geographic restrictions are common — programs may only apply in specific counties, zip codes, or census tracts.
Purchase price caps apply — confirm the program's maximum sales price matches your target budget.

Pro tip: Bring the full address of the home you're considering so your loan originator can check program eligibility by location. A program that works in one zip code may not work two miles away.

DTI (Debt-to-Income) Ratio

DPA programs often have their own DTI caps. Even if your mortgage lender allows a 50% back-end DTI, the DPA program may cap it at 45%. If the DPA has a monthly payment, that payment must also be included in your DTI calculation — which can affect how much home you can afford.

Liquid Assets

Some programs have limits on how much cash you're allowed to have in the bank (retirement funds are usually excluded). If you have significant savings, check whether the program counts that as a reason to disqualify you from "need-based" assistance.

Phase Two

The DPC Walkthrough

Once intake is done and you have a clear picture of your household, it's time to move through the actual process. DPC stands for Down Payment Connect — the professional platform loan originators use to find and verify DPA programs across the country. The steps below walk you through what happens from program search all the way to closing day.

Two platforms you may hear about:
Down Payment Resource — Free and public-facing. Homebuyers, loan officers, and real estate agents can use it to explore available programs. Great for a first look.

Down Payment Connect (DPC) — A paid professional tool used by loan originators. It has access to nearly every DPA program in the country, with full program details, eligibility tools, and documentation requirements. This is what your loan officer uses on the back end.

Your loan originator uses the DPC platform to search programs available in your target county and filter them by what you actually qualify for. This step happens before any formal application — it's a research and screening step.

What's being filtered at this stage:

Income limit vs. your household income (using the right calculation method for each program)
Your credit score vs. each program's minimum
Property type (single-family, condo, etc.) and location eligibility
First-time homebuyer requirement (if applicable)
Maximum purchase price vs. your target price range
Whether the program is currently funded (funds run out — this matters)

Don't skip this: DPA programs run on limited funding and can close with no warning. A program that was open last month may be depleted today. Always confirm current availability before counting on a specific program.

After filtering, you should end up with 2–3 realistic programs to evaluate in detail. More than that can get overwhelming; fewer than two doesn't give you a backup if one falls through.

Loan originator reviewing DPA program options on a computer

A loan originator uses Down Payment Connect to identify and screen DPA programs available in the buyer's area.

Once programs are identified, the loan originator pulls your credit and runs Automated Underwriting System (AUS) findings using the first mortgage product that pairs with each DPA program. This confirms you actually qualify — not just in theory, but in the system that approves loans.

At this stage, your originator will:

Verify your income meets the DPA program's limit using the correct calculation method
Confirm your credit score clears the DPA program's threshold (separate from the mortgage minimum)
Verify the target property address is in an eligible area
Check that the sales price is within the program cap
Calculate your DTI ratio — including the DPA payment if it has a monthly payment
Document all eligibility verification in writing before issuing a pre-approval letter

Important: A pre-approval letter that includes DPA should only be issued after the above steps are confirmed. A pre-approval that assumes DPA without confirming program eligibility is not reliable. Ask your originator specifically: "Have you confirmed I qualify for this DPA program specifically — not just the mortgage?"

Most DPA programs work on a first-come, first-served basis. Funds are allocated as reservations come in, and when they're gone, they're gone — until new funding is approved. This means the moment you're ready to make an offer on a home, your originator should simultaneously:

Submit your mortgage application
Reserve or apply for the DPA funds with the program administrator

Don't wait until after contract. Some buyers wait until they have a signed purchase contract to inquire about DPA — by which point, funds may be depleted. Start the DPA reservation process as early as the program allows.

What you'll need to have ready for the DPA reservation:

Completed 1003 mortgage application
Income documentation (pay stubs, W-2s, tax returns)
Credit report (pulled by your originator)
Property address (even a preliminary address if you're still under contract)

The reservation puts a "hold" on the funds for you while the rest of the process plays out. Your originator manages the reservation deadlines — but you need to know they exist so you don't cause unnecessary delays.

Nearly every DPA program requires at least one borrower to complete a HUD-approved Homebuyer Education course before funds are released. Some programs require all borrowers. A few programs even require the loan originator and/or the real estate agent to complete training before they can work with that program's clients.

Start this as early as possible. It is one of the most common reasons DPA transactions get delayed. By the time you have a signed contract and a closing date, you may not have time to get enrolled and complete the course before the program's deadline.

What to know about homebuyer education:

Courses are typically 6–8 hours total
Many programs accept online courses (Framework, eHome America, others)
Some programs require in-person or phone-based counseling — especially if there are credit challenges
Verify the specific format your program accepts before enrolling
You'll receive a certificate of completion that becomes part of your DPA file
The certificate may have an expiration date — don't complete it too far in advance

Think of this like a class you need to pass before you can register. It's genuinely useful — the content covers budgeting, understanding your mortgage, what homeownership costs look like, and how to avoid foreclosure. It's not a formality; it's designed to help you succeed as a homeowner.

A DPA transaction has two parallel approval tracks:

Track 1: Your First Mortgage
This goes through standard mortgage underwriting — Fannie Mae, Freddie Mac, FHA, USDA, or VA depending on your loan type. The underwriter reviews your income, credit, assets, and the property appraisal.

Track 2: The DPA Program
The DPA program has its own underwriting and approval process. This is separate from your first mortgage lender and is handled by the program administrator. They review compliance with their program guidelines, income limits, homebuyer education completion, and property eligibility.

Your DPA file package typically includes:

A copy of your 1003 mortgage application
Income documentation (W-2s, pay stubs, tax returns)
Homebuyer education certificate
A signed and executed purchase contract
A commitment letter from your first mortgage lender

Set your expectations accordingly. DPA transactions take longer than standard loans. Make sure your purchase contract allows enough time for both approval tracks. Talk to your realtor and your originator about realistic timelines before writing an offer with an aggressive closing date.

Your loan originator should proactively manage both pipelines and keep you and your real estate agent updated. If you're not hearing status updates from both tracks, ask.

Closing with DPA requires additional coordination that a standard transaction doesn't. Your originator should handle this, but you should know what's involved so you can ask the right questions.

Before Closing Day

The DPA program administrator must confirm how funds will be disbursed — wire transfer, check, or direct payment to the title company
The closing agent (title company) must receive the DPA commitment letter and any special closing instructions from the program
Your Closing Disclosure (CD) must correctly show the DPA funds — review it carefully
Confirm your homebuyer education certificate is in the file before the closing date

At Closing

You'll sign documents for both your first mortgage and the DPA second lien. The DPA funds reduce your out-of-pocket costs at the closing table. Make sure you understand exactly what you're signing — especially the terms of the DPA loan, including any forgiveness schedule and what triggers repayment.

After Closing

Your responsibilities don't end at closing if you have a forgivable or deferred loan. You may be required to:

Live in the home as your primary residence for a set period
Submit annual owner-occupancy certifications to the program
Notify the program before refinancing (subordination rules may apply)
Repay the balance if you sell before the forgiveness period ends

Ask your originator to walk you through the post-closing obligations specific to your program before you sign — not after.

DPA Walkthrough