Down Payment Assistance · Home Loan Studio

Down payment assistance

The threshold.

Down payment assistance is the threshold problem. The deal is doable, the income is there, the credit checks out. The cash to close isn't.

DPA programs cover that gap. Chenoa Fund is the most common one in our six licensed states: a 3.5% second lien that covers an FHA loan's down payment requirement, repayable on standard terms.

There are other DPA programs too. Which one fits depends on income, state, and program eligibility. We run the file against what's available.

04

Threshold A doorway is also a decision

01 · The down payment problem

If you think you cannot afford a home, you probably can.

The biggest barrier to first-time homeownership is the down payment, not the monthly payment. Down payment assistance programs solve the down payment problem. If you have been saving and the math has not worked, this page is for you.

Here is the math: if you can afford a $2,800 monthly payment but have only $5,000 saved, you are not actually priced out. You are priced out of conventional 5%-down. With a DPA second lien covering down payment and closing costs, you can buy on FHA terms with effectively no cash out of pocket. The monthly payment looks identical to a buyer who put down 5% in cash.

If you walked away from a home purchase after running the numbers, talk to us before you write off the next two years. DPA might change the math entirely.

02 · The programs we run

Programs in regular use.

DPA is fragmented. Hundreds of programs exist across federal, state, county, and city levels. These are the ones we run most often. We research per file what is available for your specific situation and state.

Nationwide

Chenoa Fund.

DPA second lien from CBC Mortgage Agency. Covers 3.5% down payment for FHA loans. Two variants: a repayable second (lower rate, paid back monthly) and a forgivable second (forgiven after 36 months of on-time payments on the first mortgage). Most flexible nationwide program we work with.

Pairs with: FHA · Available in all states we operate

California

CalHFA.

California Housing Finance Agency programs. Multiple variants including MyHome Assistance (deferred-payment subordinate loan up to 3.5%) and ZIP (zero-interest deferred for closing costs). Income and sales price limits by county.

Pairs with: FHA · VA · Conventional · CA only

Nationwide

Arrive Home.

DPA program designed for buyers with alternative credit profiles. Allows manual underwriting and accepts non-traditional credit history (rent payment history, utility payments). Useful if you do not have a thick traditional credit file but are otherwise credit-worthy.

Pairs with: FHA · Alternative credit OK

Conventional

HomeReady & HomePossible.

Fannie Mae's HomeReady and Freddie Mac's HomePossible. 3% down conventional programs for buyers under 80% of area median income. Reduced PMI compared to standard conventional. Pair with various second-lien DPA programs to bridge the down payment gap.

Pairs with: most DPA seconds · Income-limited

03 · How the stack works

First lien. Second lien. Your cash.

Most DPA structures involve a first mortgage (FHA, conventional, or VA) plus a DPA second lien that covers some or all of the down payment and closing costs. Here is the common structure.

Typical FHA + Chenoa structure

First lien: FHA loan at 96.5% loan-to-value (3.5% down)
Second lien: Chenoa DPA covers the 3.5% down payment
Your cash: Closing costs only (sometimes seller-paid, sometimes covered by additional DPA programs)
Total out of pocket: Often $3,000-$8,000 depending on closing cost coverage

Typical CalHFA + MyHome structure (California)

First lien: CalHFA FHA, VA, or conventional first
Second lien: MyHome subordinate up to 3.5% of purchase price
Third lien: ZIP zero-interest for closing costs (optional)
Your cash: Often near zero in qualifying scenarios

The trade-offs to know

DPA programs have specific eligibility (income limits, sales price limits, occupancy requirements, sometimes first-time buyer rules). The rates on the first mortgage are usually slightly higher than market rates. The total monthly payment with the second-lien repayment is sometimes higher than a market-rate conventional with normal down payment. The trade-off is that you are buying now instead of saving for two more years. In appreciating markets, this trade-off almost always favors buying.

04 · Who qualifies

Common eligibility filters.

DPA programs have rules. Here are the most common ones that affect whether you qualify for what.

Eligibility	Typical rule	Notes
Income limits	Usually 80%-140% of area median income	Higher for "non-targeted" census tracts. Some programs have no income limit (Chenoa).
Sales price limits	Often capped at HUD area median or specific dollar amount	Varies by county. Can be limiting in high-cost markets.
First-time buyer	Most programs: "no ownership in past 3 years"	Federal HUD definition, not literal first-time.
Occupancy	Must be your primary residence	No investment properties on DPA. Must occupy within 60 days.
Credit minimums	620 typical floor, some programs 580	Compensating factors can flex this slightly.
Education	Many programs require homebuyer education course	Online courses available. Approximately 8 hours, can be completed in a weekend.

Down payment. Solved.