Beware of the Down Payment Assistance (DPA) Program

Special article brought to you by Econ Mortgage

If you’re trying to get into your first home but struggling to come up with a down payment, a down payment assistance program may sound like just what you need. Down Payment Assistance (DPA) programs are typically state- or federally-ran housing finance programs that provide grants or loans to help offset the amount needed for a down payment on a new home.

These DPAs are usually reserved for first-time homebuyers or individuals who fall below certain income requirements. There are several different types of DPA programs available, and they can be helpful for first-time homebuyers who are otherwise not able to save enough for a down payment, but before you use a DPA, make sure you know all the facts, so you know what you’re signing up for.

One of the main pitfalls of a DPA is that they often include hefty fees, which make it more expensive to get into a home than using a traditional mortgage with a traditional down payment. It may seem that you’re getting a good deal with the grant/loan for the DPA, but the loan fees can be as much as two to three times more expensive than a “normal” (FHA/Conventional/VA/USDA) mortgage when you have a standard down payment amount.

Buyers can be so focused on the down payment for their loan that they don’t consider how much the extra fees will increase their monthly payments, nor the overall amount financed, which can put you “upside-down” in your home from day one. This ends up costing you a LOT more in the long run.

DPAs can be helpful if you need help getting into your first home, but don’t automatically assume that a DPA is the default best way to go. See if you qualify for a DPA and evaluate the cost compared to other non-DPA options. There are a lot of low down payment options available, so you may be surprised what you’re able to do without getting saddled with extra fees that come with some of the down payment assistance programs.

Work with a qualified loan expert to explore your options and make a decision on the loan that is best for your personal circumstances.

Who is Econ Mortgage?

At Econ Mortgage, we keep our overhead low and use technology to streamline the mortgage process. We make less profit on each loan, so we can pass the savings on to our clients.

If you need a home loan or even just want to see if you qualify, call us at (385) 258-3588 or visit

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