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 requirement, and sometimes a homebuyer education course.
Key facts
105%
Fannie Mae maximum CLTV with a Community Seconds loan
Fannie Mae Selling Guide B5-5.1-02 · May 3, 2023
105%
Freddie Mac maximum TLTV with an Affordable Second
Freddie Mac Home Possible fact sheet · Feb 1, 2026
Grant or loan?
| 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 compares them.
How lenders count it
A DPA second loan sits behind your first mortgage as a junior lien. Fannie Mae calls these Community Seconds and allows a 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
Sources
- Fannie Mae Eligibility Matrix — Fannie Mae maximum LTV, one-unit principal residence purchase (Apr 1, 2026)
- Fannie Mae Selling Guide B5-5.1-02 — 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 — 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?
- CFPB: Where can I get money for a down payment on a home?
Last reviewed Figures are checked against the sources above. Read our editorial policy. This page is general information, not financial advice — see the disclaimer.