Down Payment Assistance Programs by State: Your Guide to Affordable Homeownership

As the housing market remains competitive, affording a down payment has become a challenge for many first-time homebuyers. Fortunately, down payment assistance (DPA) programs are available in every state to help qualified buyers overcome this hurdle. 

What is Down Payment Assistance?

Down payment assistance refers to financial aid programs that help homebuyers cover their down payment and sometimes closing costs. These programs are designed to increase affordable housing opportunities and make purchasing a home possible for lower-income families. DPA is typically offered as no-interest loans or grants that do not need to be repaid, depending on the requirements of each individual program.


The two most common types of down payment assistance programs are:


Second mortgages are a type of down payment assistance loan where the funding for down payment and closing costs comes in the form of a secondary loan, usually at 0% interest. These loans are then repaid when the home is sold, refinanced, or the loan term expires.


Second mortgages allow homebuyers to qualify for a first mortgage with a lower down payment. For example, some programs provide funds equivalent to 3%-5% of the home’s purchase price to enable a buyer to qualify for a conventional loan with only 3% down rather than the typical minimum of 5%.


Down payment grants are funds that do not need to be repaid. Eligibility requirements tend to be more stringent than for loan programs, but grants eliminate the debt burden associated with a second mortgage. Some grants are forgivable over time if the homeowner remains in the home as their primary residence.

While DPA can come from a variety of sources like nonprofits or state/local governments, the largest providers of grants and low-interest loans nationwide are state and federal housing finance agencies. Understanding the options available through these agencies in your state is a great starting point.

Alabama Down Payment Assistance Programs

Alabama residents have access to DPA through both the Alabama Housing Finance Authority (AHFA) and the U.S. Department of Housing and Urban Development (HUD).



  • Eligibility: Must be a first-time homebuyer with household income at or below 80% of the state median.
  • Programs:
    • Homebuyer Down Payment Assistance (HBA): Offers 30-year, 0% interest second mortgages up to 5% of the purchase price. Funds do not need to be repaid as long as the home remains owner-occupied for five years.
    • Teacher Homebuyer Assistance Program (THAP): This program is similar to HBA but specifically for K-12 teachers. Loan amount up to 10% of the purchase price.
  • How to Apply: Work with an AHFA-approved lender and submit a completed application/documentation for pre-qualification.


Certain cities/counties in Alabama receive HUD funding to operate their own DPA programs. Eligibility and benefits vary by locality, so research individual programs for full details. Major participating areas include Mobile, Birmingham, and Huntsville.

Alaska Down Payment Assistance Programs

Alaska Housing Finance Corporation (AHFC) is the leading provider of DPA across most communities in Alaska.

  • Eligibility: First-time homeowners at or below 120% of state median income. Must complete homebuyer education class.
  • Programs:
  • Homeownership Assistance Program (HAP): Offers up to 5% of the purchase price as a deferred 0% interest second mortgage. Full amount is due upon sale or transfer.
  • Rural Homeownership Assistance Program: Similar to HAP but focuses on rural/smaller communities.
  • How to Apply: Contact an AHFC participating lender and submit a completed application/documentation for consideration. The process can take 4-6 weeks.

A few Alaska Native tribal organizations and the Alaska Commission on Postsecondary Education also offer DPA, scholarships, or forgivable loans for their members and students. Research specific tribal programs for eligibility and benefits.

Arizona Down Payment Assistance Programs

Arizona has various DPA programs available through the state housing finance agency and larger cities/counties.

  • Arizona Department of Housing (ADOH):
    • Homebuyer Incentive Program: Second mortgage up to 6% of purchase price (3% minimum) as deferred 0% loan. Due upon sale or transfer.
    • My House My Town: Assistance for underserved towns/zip codes. Up to 5% loan or grant depending on location.
  • City/County Programs: Most populated areas like Phoenix, Tucson, Mesa operate their own DPA initiatives with funding from ADOH and HUD. Options include grants, reduced interest loans.

ADOH programs are available statewide, while local programs focus on individual cities/regions. Research both to compare all down payment options near you. Homebuyer education is required by most Arizona DPA lenders and providers.

Arkansas Down Payment Assistance Programs

The Arkansas Development Finance Authority (ADFA) oversees three primary DPA initiatives across the state.

  • Eligibility: First-time homebuyers at or below 115% of the state median income. Must complete pre-purchase counseling.
  • Programs:
  • Homebuyer Assistance Program: Offers 1%-5% second mortgage at 0% interest. Due in 15 years or upon sale.
  • Teacher Assistance Program: Similar benefits exclusively for K-12 teachers.
  • Military Homebuyer Assistance Program: For active duty/veteran households. Amount varies by branch served.
  • How to Apply: Work directly with an ADFA-approved lender to access program funds during home shopping/purchase process. Application takes 4-6 weeks to complete once submitted.

In addition, a limited number of cities like Little Rock participate in HUD programs, providing grants or forgivable loans to low-income residents. Requirements differ by locality.

California Down Payment Assistance Programs

With numerous large population centers, California operates multiple DPA programs on both the state and local levels. Major options include:

  • California Housing Finance Agency (CalHFA):
  • MyHome Assistance Program: Offers up to 6% purchase assistance as a 30-year 0% interest loan. Forgiven after ten years of ownership.
  • School Faculty Program: Exclusively benefits K-12/college instructors and staff.
  • Local Initiatives: Many California cities distribute funds from HUD, the state, or municipal sources. Some offer larger grants than CalHFA—often up to 10% of the purchase price. Eligibility varies but typically for households under 80-120% of AMI.

Some of the largest local programs are run through Los Angeles, San Diego, Sacramento, San Francisco, and Oakland housing departments. Eligibility screenings happen on the city or county level. Apply directly with participating lenders and discuss all available options.

Colorado Down Payment Assistance Programs

Colorado Housing and Finance Authority (CHFA) operates multiple DPA initiatives across the state:

  • Eligibility: First-time buyers at or below CHFA income limits (varies by county, 80-140% AMI on average).
  • Programs:
  • Down Payment Assistance Loan: 0% interest second loan up to 5% of purchase price due in 30 years.
  • Colorado United Veterans Program: Grants or loans up to 6% exclusively for veterans and active-duty households.
  • Educator Assistance Loan: Forgivable loans up to 6% for K-12/higher ed employees.
  • How to Apply: Contact a CHFA-approved lender to apply. Funds can be layered with FHA, VA, or conventional first loans. Application review takes 2-4 weeks on average.

A limited number of communities may offer local or HUD-funded programs as well. Research additional options through your area’s housing authority too.

Connecticut Down Payment Assistance Programs

The Connecticut Housing Finance Authority (CHFA) is the primary statewide provider of DPA in Connecticut through two main programs:

  • Eligibility: First-time buyers at or below 110% of AMI. Must complete homebuyer course.
  • Programs:
  • Connecticut Housing Choice Voucher Program: Offers up to 5% of purchase price as a deferred 0% loan. Due upon sale or transfer.
  • CT Style Zero Down Program: Partners CHFA loan with FHA in place of full down payment. Borrowers only pay closing costs upfront.
  • How to Apply: Work directly with a participating CHFA lender during the home search and purchase process. Review and approval take 4-6 weeks on average.

Limited additional assistance may be available through some municipalities or nonprofits serving specific Connecticut cities/counties. Look into options where you hope to purchase.

Delaware Down Payment Assistance Programs

  • Delaware State Housing Authority (DSHA):
  • Delaware Homeownership Program: Offers 30-year, 0% interest second mortgages up to 5% of purchase price. Funds must be paid back if the property is sold within five years.
  • Mortgage Credit Certificate (MCC) Program: Provides 20% annual tax credit on mortgage interest for first-time buyers. It can help make homes more affordable.
  • Eligibility: Household income must be at or below 110-120% of AMI, depending on location/program.
  • How to Apply: Work directly with an approved DSHA lender to receive program funds at closing. Application review typically takes 4-6 weeks once submitted.

In addition, Wilmington and Sussex County operate local HUD-funded programs that may provide grants exceeding 5%. Eligibility and terms are handled separately in those jurisdictions—check directly with the housing department for full details.


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