Down payment assistance
Programs, often run by state or local housing agencies, that help buyers cover the down payment or closing costs through grants or low-cost or forgivable second loans. Most have income, price or first-time buyer rules.
Also called: DPA, down payment grant, first-time buyer assistance
Related terms
The part of the purchase price you pay in cash rather than borrow. A larger down payment lowers the loan amount and can remove the need for mortgage insurance on a conventional loan.
Someone buying their first home. Many programs define it as anyone who has not owned a home in the past three years, which can open access to special loans and assistance.
Money given by a relative or other allowed donor toward a down payment or closing costs, with no expectation of repayment. Lenders require a signed gift letter and proof of the transfer.
A mortgage insured by the Federal Housing Administration, allowing low down payments and more flexible credit standards. Borrowers pay an upfront and annual mortgage insurance premium, and loan amounts are capped by county.
Fees and charges paid at closing on top of the price, such as lender fees, title insurance, recording fees, taxes and prepaid items. Buyers often pay around 2% to 5% of the price; sellers pay their own set of costs.