Calculate how DPA grants, forgivable loans, and second mortgages reduce your cash to close. See updated down payment and closing cost requirements.
Down payment assistance (DPA) programs exist at the federal, state, and local level to help buyers who lack enough cash to meet minimum down payment requirements. These programs come in several forms — outright grants, forgivable second mortgages, deferred-payment loans, and matched savings plans — each with its own repayment terms and eligibility criteria.
Even a modest DPA award can dramatically change your closing-day math. A $10,000 grant on a $300,000 purchase shifts you from needing $15,000 out of pocket (5 % conventional) down to just $5,000 plus closing costs. That difference can mean the difference between qualifying and not.
This Down Payment Assistance Calculator lets you model different DPA scenarios side by side. Enter your home price, base down payment, closing cost estimate, and the DPA amount and type to see exactly how much cash you still need at closing and how your loan-to-value ratio changes.
Homebuyers, investors, and real-estate professionals all benefit from precise down payment assistance figures when evaluating properties, negotiating deals, or planning long-term investment strategies. Save this calculator and revisit it whenever market conditions or your financial situation changes.
Many buyers assume they need 20 % down and walk away from homeownership unnecessarily. With over 2,000 DPA programs nationwide, understanding how assistance reduces your required cash is critical. This calculator shows the exact dollar impact of a DPA grant or loan on your closing cash, LTV, and potential PMI obligation so you can shop programs with confidence.
Cash to Close = (Down Payment − DPA Amount) + Closing Costs − Seller Credits. Effective Down = Own Funds + DPA Amount. LTV = (Home Price − Effective Down) / Home Price × 100.
Result: $7,600 cash to close
On a $320,000 home the buyer's own funds are $8,000. A $10,000 DPA grant covers the remaining down payment requirement and more. Closing costs at 3 % equal $9,600. The effective down payment becomes $18,000 (5.6 % of price), so LTV is 94.4 % and PMI still applies. Cash to close = $8,000 + $9,600 − $10,000 = $7,600.
Down payment assistance programs bridge the gap between what a buyer can save and what a lender requires at closing. The assistance may be funded by state housing finance agencies, city or county governments, employer-assisted housing programs, or nonprofit organizations. Each program defines eligible property types, income ceilings, and loan products.
Grants are the simplest — free money applied to your down payment or closing costs with no obligation to repay. Forgivable second mortgages act like grants if you meet occupancy requirements, typically five to ten years. Deferred-payment loans carry no monthly payment but come due when you sell, refinance, or no longer occupy the home. Standard repayable second mortgages add a small monthly payment but keep your first-mortgage rate competitive.
Apply early, because many DPA programs operate on a first-come, first-served basis with limited annual funding. Layer DPA with seller concessions and lender credits for maximum cash savings. Always compare the effective interest rate when DPA is bundled with a first mortgage to ensure the total cost remains favorable over your expected ownership horizon.
Down payment assistance refers to grants, low-interest loans, or forgivable second mortgages offered by government agencies or nonprofits to help homebuyers cover the down payment and sometimes closing costs. Programs vary by state and often target first-time buyers or low-to-moderate-income households.
It depends on the program type. Grants never require repayment. Forgivable loans are forgiven after you live in the home a set number of years. Deferred loans must be repaid when you sell, refinance, or move. Repayable second mortgages require monthly payments but often carry below-market rates.
Some DPA programs bundle with slightly above-market interest rates to fund the assistance. Others are independent of your first mortgage rate. Compare the total cost of the loan plus the rate premium versus saving a larger down payment without assistance.
Yes. FHA loans only require 3.5 % down, and many DPA programs cover part or all of that amount. Just ensure the specific DPA program permits use with FHA financing, as some are restricted to conventional loans.
Only if your effective down payment (own funds plus DPA) reaches 20 % of the purchase price. Most DPA programs provide between 3 % and 5 % of the price, so PMI usually still applies on conventional loans. On FHA loans, MIP is required regardless of down payment size.
Eligibility varies by program but commonly includes income limits (often 80–120 % of area median income), first-time buyer status, minimum credit scores, and completion of a homebuyer education course. Some programs also have purchase price caps.