How to Get Down Payment Assistance: A First-Time Homebuyer’s Guide

If you’re buying your first home, the down payment can feel like one of the biggest obstacles standing between you and a set of keys.

The good news is you may not have to cover all of those upfront costs on your own.

Down payment assistance programs, commonly referred to as DPA programs, may help eligible homebuyers cover some or all of their down payment and, in some cases, certain closing costs or other eligible homebuying expenses. Programs are available across the country, but finding the right one takes a little planning.

If you’re wondering how to get down payment help as a first-time homebuyer, here are five steps that can help you get started.

You don’t need to wait until you’ve found a house to start looking into DPA programs. In fact, earlier is often better.

Exploring programs at the beginning of your home-buying journey can help you understand what resources may be available and how they could fit into your budget.

This can be especially helpful if you’ve been putting off homeownership because you think you need to save a large down payment first. Depending on the mortgage and assistance programs available to you, you may need less cash upfront than you originally anticipated.

Starting early also gives you more time to complete any additional steps a program may require before closing.

There isn’t one national DPA program that works the same way for every buyer.

Programs may be offered by state or local housing agencies, cities and counties, nonprofit organizations and other providers. Some are available throughout an entire state, while others are designed for buyers purchasing in specific communities.

That means the programs available to you can depend on where you plan to buy as well as information about your finances and homebuying plans.

At RWM, we help first-time homebuyers explore available assistance options early in the process. Our down payment assistance search tool can be a helpful starting point for identifying programs that may fit your homeownership goals. By answering a few basic questions, you can discover programs that may be available based on your homeownership goals and location.

At this stage, you don’t need to become a program expert. The goal is simply to find out whether down payment assistance may be part of your homebuying plan.

Finding a DPA program is an important first step, but it’s only part of the home financing picture.

Down payment assistance typically works alongside your primary mortgage, which means the program and the loan need to work together. An RWM loan officer can help you evaluate both your mortgage options and available assistance programs to understand how they may work together within your homebuying plan.

This is a good time to talk through questions such as:

• Which programs may be available to me?
• Which programs can be paired with the mortgage options I’m considering?
• How much money might I need to contribute myself?
• Could the program(s) also help with eligible closing costs?
• Are there additional program requirements or deadlines I should know about?

Your loan officer can also help you understand your mortgage options and what you may be able to afford, so you can approach your home search with a clearer picture of both your financing and any down payment help that may be available.

The goal isn’t simply to find a down payment program. It’s to build a home financing plan that makes sense for your situation.

Finding a down payment program doesn’t necessarily mean it will be the best option for you.

Different programs have different terms, benefits and requirements. Some assistance may not need to be repaid, while other programs may provide funds through a loan that is forgiven over time, deferred until later or repaid according to certain terms.

Don’t worry if those differences sound confusing at first. Your loan officer can help you compare the available options and understand how each one would affect your overall financing.

Some useful questions to ask include:

• How much assistance could I receive?
• What can the funds be used for?
• Does the assistance need to be repaid?
• Are there requirements for how long I must live in the home?
• Can I use the program with the mortgage I’m considering?
• How could the program affect my monthly payment or cash needed at closing?

The program that offers the largest amount of assistance isn’t always the best fit. Look at the complete financing picture and choose the option that works best for your circumstances and long-term plans.

If you decide to move forward with a program, there may be a few additional steps before you can receive the assistance funds.

For example, some down payment assistance programs require first-time homebuyers to complete an approved homebuyer education course or counseling session. You may also need to provide documentation showing that you meet the program’s requirements.

If homebuyer education is required, don’t think of it as just another item on your to-do list. These courses can help you better understand budgeting, mortgages, closing costs and the responsibilities that come with owning a home.

Completing requirements early can also help keep everything moving once you’re under contract on a home.

Once you’ve found a home and are moving through the mortgage process, your loan officer will coordinate the down payment assistance with your financing and closing.

You may need to provide updated documents or complete final program paperwork along the way. The assistance is then typically applied at closing according to the program’s guidelines.

The important thing is to keep your loan officer informed and respond promptly to requests for information, just as you would with the rest of your mortgage application.

You don’t need to have every detail figured out before exploring down payment assistance programs. Buying your first home may be more attainable than you think, even if saving for the upfront costs has been a challenge.

Start by finding out what programs may be available to you. Then work with your RWM loan officer to understand your options, determine what may fit your situation and build the assistance into your overall home financing plan.

The sooner you explore your options, the sooner you can make decisions based on what’s actually available to you, not assumptions about how much you need to buy your first home.

Ready to take the first step? At RWM, we can help you explore available down payment assistance options, review your mortgage choices, and determine how they may fit into your overall home financing plan. Start with our down payment assistance search tool, then connect with an RWM loan officer to discuss your goals and next steps toward homeownership.