Pillar guide

Down Payment Assistance, explained from scratch.

If you're new to the homebuying process, this is the page to start on. We cover what DPA actually is, the three forms it takes, and who qualifies. Then the question that matters most: when it's worth using, and when it isn't.

By Mike Certo, NMLS #260555 — Updated June 2026

The three structures DPA takes

1. Forgivable second (the "soft second")

The assistance is recorded as a second loan against your home, but no payments are required. If you continue to live in the home as your primary residence for the forgiveness period — typically 3, 5, or 7 years — the loan is forgiven and you owe nothing.

• You pay back: Nothing if you stay long enough.
• You pay back early if: You sell, refinance for cash-out, or stop using the home as your primary residence before the forgiveness period ends.
• Tradeoff: The first-mortgage rate is usually slightly higher than market — that's how the program funds the forgiven assistance.

2. Repayable second (amortized)

The assistance is a real second loan with a real monthly payment, typically a 10-year term at 1–2% above the first mortgage rate. You pay it down alongside the first mortgage.

• You pay back: The full amount over the term, with interest.
• Tradeoff: The first-mortgage rate stays closer to market because the program is being repaid. But you carry two payments and your DTI calculation includes both.

3. Deferred second (silent second / due on sale)

No monthly payments. The assistance sits as a silent second and is fully repaid only when you sell the home, refinance for cash-out, or stop using it as your primary residence.

• You pay back: The full assistance amount when one of the trigger events happens.
• Tradeoff: Better cash flow than a repayable second; but you eventually owe the full balance, so it's not "free money" — it's a deferred liability.

Where the money actually comes from

Most DPA programs are operated by state housing finance agencies, county housing departments, city governments, or non-profit organizations. The funding model: the program purchases your first mortgage at a slightly pricing structure that funds the assistance, and uses the spread to fund the down payment assistance grant.

This is the part most consumers don't understand at first: the assistance is not free money. It's funded by you paying a slightly higher rate on the first mortgage. That rate premium is real, usually 0.25% to 0.75% above what you'd get on a conventional or FHA loan without DPA.

For someone who has very little saved, that premium is worth it because it gets you into a home years sooner. For someone with most of the down payment saved, the premium can cost more over time than the assistance is worth. That's the calculation we run in your consult.

Down payment assistance FAQ

Do you have to pay back down payment assistance in Arizona?

It depends on the structure. A forgivable second is erased if you stay in the home as your primary residence for the forgiveness period, usually 3, 5, or 7 years. A deferred (silent) second is repaid only when you sell, refinance for cash-out, or move out. A repayable second has a real monthly payment until it is paid off. Home Plus and Home in Five use forgivable or deferred seconds, so most buyers owe nothing if they stay put.

How much down payment assistance can I get in Arizona?

Home Plus gives up to 5% of the purchase price statewide (4% base plus a 1% boost for Active Duty and Veterans). Home in Five, available only in Maricopa County, gives up to 6.5% (5% base, plus 1% for teachers, first responders, military, Veterans, or income-qualified buyers, plus a 0.5% boost). Both cover down payment and closing costs and run as a second lien behind your first mortgage.

What credit score do I need for Arizona DPA?

You need a 620 minimum credit score for Home Plus and 640 for Home in Five, the two largest Arizona DPA programs. That is higher than FHA's own 580 floor, because the DPA layer sets its own bar. If your score is close, we can map out what it takes to reach 640, or look at whether a standard FHA loan without DPA fits better for now.

What are the income limits for Arizona DPA?

Home Plus uses a borrower income limit of $155,386, or $146,503 when paired with an FHA, VA, USDA, or conventional HFA loan. Home in Five uses a household income limit of $157,360, current as of June 10, 2026. These are ceilings, not targets, and they change periodically, so confirm your figure against our current DPA figures page before you rely on a number.

Do I have to be a first-time buyer to use DPA?

No. Home Plus and Home in Five both allow repeat buyers, so you can use them on your second or third purchase. A handful of local programs, like Flagstaff CHAP, do require first-time status. When a program uses that term, "first-time buyer" means you have not owned a home in the last three years, so prior owners often still qualify.

Home Plus vs. Home in Five — which is better?

Home Plus is statewide and gives up to 5%; Home in Five is Maricopa County only and gives up to 6.5%. If you are buying in Phoenix, Mesa, Scottsdale, or anywhere else in Maricopa, Home in Five usually delivers more assistance. Outside the county, Home Plus is the answer. Home Plus wants a 620 minimum score and Home in Five requires 640, both allow repeat buyers, and both pair with FHA, VA, USDA, or conventional.

Do I need a homebuyer education course?

Yes, most Arizona DPA programs require a homebuyer education course before closing. It typically runs about 4 to 8 hours, is taken online, and is often free or costs $50 to $100. The course covers budgeting, the loan process, and homeownership costs. We point you to an approved provider early so the certificate is in hand well before your closing date.

Can I combine two DPA programs or use DPA with FHA, VA, USDA, or conventional?

You cannot stack two DPA programs on the same purchase — it is one DPA program per loan. But DPA does layer on top of your first mortgage, and Home Plus and Home in Five both work with FHA, VA, USDA, and conventional first loans. So you pick a single assistance program, then choose the first-mortgage type that fits your credit, price point, and military status.