Forgivable vs. Repayable DPA — the honest tradeoff most loan officers won't explain.
Both structures help you get into a house with less of your own money. But they cost very different amounts depending on how long you stay, and the loan officer doesn't always pick the cheaper option for you. Here's the math.
Two-line summary
- Forgivable DPA: No second-mortgage payment, but the first-mortgage first-mortgage pricing is structured to fund the assistance to fund the eventual forgiveness. You "pay" via rate.
- Repayable DPA: First-mortgage rate stays close to market, but you carry a separate 10-year second-mortgage payment with its own pricing. You "pay" via a second monthly bill.
How forgivable DPA actually pays for itself
The assistance isn't free money. It's funded by the slightly-higher rate on your first mortgage. Over the life of a 30-year loan, that rate premium adds up.
Worked example — $300,000 first mortgage, 5% DPA = $15,000 assistance
| Structure | How the cost shows up | What you carry monthly | How long you carry it |
|---|---|---|---|
| Forgivable DPA | Pricing built into the first mortgage rate | Single first-mortgage payment | 30 years on the first mortgage |
| Repayable DPA | Pricing closer to market on the first; second mortgage carries its own payment | First-mortgage payment + second-mortgage payment | 30 years on first; 10 years on second |
| No DPA | Standard market pricing | Single first-mortgage payment | 30 years on the first mortgage |
Specific pricing is quoted file-specific during the consult, not from generic ranges.
Illustrative only. Real rates and pricing change daily.
The "no DPA" path is cheapest over time — by ~$50,000 over 30 years in this scenario. That's the cost of the assistance. But that path requires you to have $15,000 saved already. If you don't, the DPA path is what gets you into the home now instead of in 5 years.
When forgivable beats repayable
- You're going to stay 5+ years In the home (or however long the forgiveness period is).
- You don't want a second monthly payment Showing up on your DTI for the next 10 years.
- You're stretching your DTI to qualify already — adding a $150–$300/month second mortgage payment may break the qualification.
When repayable beats forgivable
- You may move within the forgiveness period. If you move before forgiveness completes, you owe the unforgiven portion and you've been paying the higher rate.
- You can comfortably afford the second payment. Repayable's lower first-mortgage rate often saves more in interest than the second-payment costs.
- You want maximum assistance. Some programs (like Arrive) only offer 5% on the repayable structure.
The hidden cost of forgivable: prepayment
If you sell or refinance the home before the forgiveness period ends, you owe the unforgiven balance. Most programs forgive monthly (1/36th, 1/60th, or 1/84th per month) — so partial credit applies — but the balance is real.
Worse: you've been paying the elevated first-mortgage rate the whole time. So you've been paying for an assistance benefit you didn't ultimately receive in full.
The upshot: forgivable DPA only beats no-DPA if you stay long enough. Don't pick forgivable just because "free money" sounds good — model the breakeven.
How we pick for your file
In your consult, we model:
- Your actual rate quotes on Forgivable, Repayable, and No-DPA paths.
- Total interest cost over your realistic stay length (not the 30-year worst case).
- How a second payment affects your DTI cushion.
- Your honest answer to: "How long will I stay in this house?"
If you'll stay long-term and you have most of your down payment, the cheapest path is no DPA at all. We'll tell you that straight. When NOT to use DPA →
Forgivable vs. repayable DPA — common questions
Do you have to pay back down payment assistance in Arizona?
It depends on the structure. Forgivable (soft-second) DPA forgives over a set period with no monthly payment, so if you stay long enough you repay nothing. Repayable DPA is a real second mortgage you pay back, usually over 10 years. Arizona's main programs, Home Plus (up to 5%) and Home in Five (up to 6.5%), use the forgivable structure with no monthly payment.
How much down payment assistance can I get?
Home Plus gives up to 4%, plus an extra 1% for Active Duty and Veterans, for up to 5% statewide. Home in Five (Maricopa County only) gives up to 5%, plus 1% for teachers, first responders, military, Veterans, or income-qualified buyers, plus a 0.5% boost, for up to 6.5%. Both are forgivable soft seconds with no monthly payment. See our current DPA figures.
What credit score do I need for Arizona DPA?
You need a 620 credit score for Home Plus and 640 for Home in Five. There is no single Arizona DPA credit score; it depends on the program. FHA financing on its own allows scores down to 580, and each DPA program sets its own minimum. If you're close, we can map out what moves your score before you apply.
Do I have to be a first-time buyer to get DPA?
No. Home Plus and Home in Five both allow repeat buyers, so you don't have to be a first-time buyer to qualify for the assistance. When a program does require "first-time" status, that means no ownership interest in a home during the past three years, not that you've literally never owned. Most Arizona buyers qualify either way.
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%, so it's the bigger grant if you're buying in Phoenix Metro. Home Plus needs a 620 score and Home in Five needs 640, both allow repeat buyers, and both work with FHA, VA, USDA, and conventional loans. The right pick depends on your county and how much assistance you need.
Can I combine two DPA programs on one purchase?
No. You can use only one DPA program per purchase; the programs do not stack with each other. What does layer is the assistance on top of your first mortgage, so a single DPA grant pairs with your FHA, VA, USDA, or conventional loan. We'll model which one program gives you the most help for your specific file.
Does DPA work with FHA, VA, USDA, and conventional loans?
Yes, all four. Home Plus and Home in Five both pair with FHA, VA, USDA, and conventional first mortgages, and both are VA eligible. The loan type changes the income limit (Home Plus borrower income is $155,386, or $146,503 with FHA, VA, USDA, or conventional HFA loans), but you keep DPA access across every common program.
Is DPA always the right move?
No. DPA can carry slightly higher first-mortgage pricing, so over a full 30-year stay the no-DPA path can cost about $50,000 less on a $300,000 loan. If you already have most of your down payment and plan to stay long-term, skipping DPA is cheaper. If you don't have the cash yet, DPA is what gets you in now instead of years from now.
Ready to model the math on your file?
Send your numbers — we'll quote 3 paths side-by-side and show the actual breakeven.