• Ben Stiller
• Jan 07, 2025
• Mortgage Process
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Navigating the mortgage process can be challenging, especially for first-time home buyers trying to save for a down payment. Programs like Down Payment Assistance (DPA) grants aim to ease these challenges and make homeownership more accessible for more people.

In this article, we’ll explain what a DPA grant is, why it exists, who qualifies, what types of loans are compatible with it, and how to work with a mortgage lender to determine eligibility.

Down Payment Assistance Grants | What Does Down Payment Mean?

A down payment is the initial money paid upfront when purchasing a home. It typically represents a percentage of the property’s purchase price and is one of the largest upfront costs for homebuyers. Many struggle to save for a down payment, which is where DPA grants can help bridge the gap.

A DPA grant provides financial aid to eligible homebuyers to cover part or all of their down payment. These grants or loans are often offered by state housing agencies, nonprofit organizations, or local governments. For instance, MassHousing offers DPA loans of up to $30,000 to help Massachusetts homebuyers secure their dream homes.

The purpose of DPA grants is to make homeownership more accessible to low- and moderate-income buyers. By reducing the upfront financial barriers, these programs support first-time home buyers, stabilize communities, and hopefully promote economic prosperity.

Who Qualifies for DPA Grants?

Eligibility for DPA grants varies depending on the program, but here are some general criteria:

MassHousing Eligibility Requirements

• Income Limits: Applicants must meet income eligibility requirements.
• First-Time Buyer Status: Most programs define "what is considered a first-time home buyer" as someone who has not owned a home in the past three years.
• Primary Residence: The purchased property must be the buyer’s primary residence.
• Property Types: Eligible properties include single-family homes, condominiums, or multi-family homes (up to four units).

Additional criteria may apply, so working with a mortgage lender familiar with the program is crucial.

What Types of Loans Are Compatible with DPA Grants?

DPA grants are typically paired with specific loan programs. In the case of MassHousing, eligible borrowers must combine DPA with a MassHousing Mortgage loan. These loans are designed to be affordable and may offer competitive interest rates and terms.

MassHousing provides two DPA loan options:

Option 1:

- Deferred Payment Loan

- Up to $30,000 available statewide

- Interest-free with no monthly payments

- Full repayment is required upon sale, refinancing, or first mortgage payoff

Option 2:

- Amortizing Loan

- Up to $25,000 available statewide

- Fixed 2% interest rate over 15 years

- Monthly payments required

How to Work with a Mortgage Lender to Determine Eligibility

A mortgage lender is your best resource for understanding whether you qualify for a DPA grant. Here’s how to start:

• Research Programs: Familiarize yourself with local options, such as MassHousing, to understand basic requirements.
• Pre-Qualification: Work with a lender to review your financial situation and determine eligibility for both a mortgage and DPA.
• Explore Loan Options: Discuss which type of DPA loan—deferred payment or amortizing—works best for your needs.
• Application Process: Complete the necessary paperwork and provide documentation to secure approval.

By understanding the program’s requirements and partnering with a knowledgeable mortgage lender, you can confidently purchase your first home.