# Down-payment assistance

> Down-payment assistance is help from state, local or nonprofit programs with a down payment or closing costs, as a grant or a deferred or forgivable loan.

URL: https://mortgage-math-us.com/glossary/down-payment-assistance/  
Last reviewed: 2026-10-29 · By the MortgageMath US Editorial team

## Quick answer

**Down-payment assistance (DPA)** is money from a state housing finance agency, local government, nonprofit or employer that covers part of a buyer’s down payment or closing costs. It usually comes with an income limit, often a [first-time homebuyer](https://mortgage-math-us.com/glossary/first-time-homebuyer/) requirement, and sometimes a homebuyer education course.

## Key facts

| Fact | Value | Source | As of |
|---|---|---|---|
| Fannie Mae maximum CLTV with a Community Seconds loan | 105% | [Fannie Mae Selling Guide B5-5.1-02](https://selling-guide.fanniemae.com/sel/b5-5.1-02/community-seconds-loan-eligibility) | May 3, 2023 |
| Payments deferred this long stay out of DTI | 5 years | [Fannie Mae Selling Guide B5-5.1-02](https://selling-guide.fanniemae.com/sel/b5-5.1-02/community-seconds-loan-eligibility) | May 3, 2023 |
| Freddie Mac maximum TLTV with an Affordable Second | 105% | [Freddie Mac Home Possible fact sheet](https://sf.freddiemac.com/docs/pdf/fact-sheet/home_possible_factsheet.pdf) | Feb 1, 2026 |

## Grant or loan?

*Common forms of assistance*

| Form | Do you repay it? |
|---|---|
| Grant | Usually not, though some require you to stay a set time |
| Forgivable second loan | Forgiven over a set period if you stay; repaid if you sell or refinance early |
| Deferred second loan | No payments; due when you sell, refinance or pay off the first mortgage |
| Low-rate second loan | Monthly payments alongside your mortgage |

Read the terms for what happens when you sell or refinance — that is where the programs differ most. The [grants guide](https://mortgage-math-us.com/first-time-buyers/grants/) compares them.

## How lenders count it

A DPA second loan sits behind your first mortgage as a junior [lien](https://mortgage-math-us.com/glossary/lien/). Fannie Mae calls these Community Seconds and allows a [combined loan-to-value](https://mortgage-math-us.com/glossary/combined-loan-to-value/) up to 105%; a payment deferred at least 5 years is left out of your debt-to-income ratio. Freddie Mac’s Affordable Seconds work the same way, up to 105%.

On a $300,000 home with a 97% first mortgage, the $9,000 down payment could come entirely from a Community Second, with up to $15,000 more toward closing costs.

## Related terms

- [Mortgage credit certificate](https://mortgage-math-us.com/glossary/mortgage-credit-certificate/)

## Sources

- [Fannie Mae Eligibility Matrix](https://singlefamily.fanniemae.com/media/20786/display) — Fannie Mae maximum LTV, one-unit principal residence purchase (Apr 1, 2026)
- [Fannie Mae Selling Guide B5-5.1-02](https://selling-guide.fanniemae.com/sel/b5-5.1-02/community-seconds-loan-eligibility) — Fannie Mae Community Seconds maximum combined LTV; Community Seconds payments deferred at least this long are left out of the debt-to-income ratio (May 3, 2023)
- [Freddie Mac Home Possible fact sheet](https://sf.freddiemac.com/docs/pdf/fact-sheet/home_possible_factsheet.pdf) — Freddie Mac Home Possible maximum TLTV with Affordable Seconds (Feb 1, 2026)
- [CFPB: Where can I find information on programs for first-time home buyers?](https://www.consumerfinance.gov/ask-cfpb/where-can-i-find-information-on-programs-for-first-time-home-buyers-en-2156/)
- [CFPB: Where can I get money for a down payment on a home?](https://www.consumerfinance.gov/ask-cfpb/where-can-i-get-money-for-a-down-payment-on-a-home-en-123/)

_General information, not financial advice._