LendingProf of Loan Factory, Inc. | Company NMLS #320841
Holly Luca | NMLS #586712

First-Time Homebuyers & Down Payment Assistance

Learn how loan choices, assistance programs, cash-to-close, and credit preparation fit together.

By Holly Luca | Mortgage Strategist | LendingProf | Loan Factory, Inc. | NMLS #586712. Licensed in CA, FL, IA & TX.

Many first-time buyers need less than 20% down. Depending on eligibility, conventional and FHA programs may allow low down payments, subject to their credit, mortgage-insurance, property, occupancy, and other requirements, eligible VA or USDA borrowers may qualify for no required down payment, and separate assistance programs may help with eligible upfront costs.

What is down payment assistance?

Down payment assistance (DPA) may be offered as a grant, forgivable loan, deferred-payment loan, repayable second mortgage, or other benefit. Program funding, income limits, purchase-price limits, property location, occupancy, credit, education, and first-time-buyer definitions vary.

Does assistance make the home free?

No. Assistance may reduce eligible upfront costs, but buyers remain responsible for the mortgage and other ownership expenses. Some assistance must be repaid when the home is sold, refinanced, transferred, or no longer owner-occupied.

How much cash should a buyer plan for?

Down payment not covered by assistance
Closing costs and prepaid taxes or insurance
Earnest money, option fees, appraisal, and inspections
Required reserves and moving or repair costs

Credits and assistance cannot always cover every expense. Obtain a transaction-specific estimate.

What should first-time buyers compare?

Compare payment, interest rate, mortgage insurance, funding fees, assistance repayment terms, upfront cash, property restrictions, time-in-home expectations, and total cost. A program with the smallest down payment is not automatically the best fit.

How do I get ready?

Review credit early, avoid new debt, organize income and asset documents, identify large deposits, build an emergency reserve, and discuss a comfortable total payment. Preapproval is conditional and not a final loan approval.

Build Your Credit & Homebuyer Readiness Plan

Important assistance-program notice

Assistance programs are administered by third parties and may change, pause, or exhaust funding without notice. Eligibility, availability, rates, fees, income limits, purchase-price limits, credit rules, property rules, education requirements, and repayment terms vary. Completing an inquiry does not guarantee qualification or funding.

Read a practical checklist

Use these educational checklists to organize questions and documents before a mortgage conversation. Select a checklist to read it on this page.

First-Time Homebuyer ChecklistOrganize documents, costs, application guardrails, and property questions.

Build your first-time buyer plan

Discuss documentation, loan choices, assistance considerations, and realistic cash-to-close.

Schedule a Mortgage 101 Conversation

Preparation Checklists

Read the checklist here or print a copy for your planning conversation. Use the secure application or upload process for identity and financial documents.

First-Time Homebuyer Checklist

Organize the documents, costs, and questions for a homebuying conversation.

Documents to gather

Government-issued identification and the information requested through the secure application process.
Recent pay statements and two years of W-2s, 1099s, or applicable income records.
Complete bank and investment statements, including all pages, as requested.
Federal tax returns when requested for self-employment, rental, or variable income.
Applicable housing, employment, and other income records.

Plan the full cost

Estimate down payment, closing costs, prepaid taxes and insurance, and any required reserves.
Budget for inspections, appraisal, moving, repairs, and contract deposits where applicable.
Review assistance availability and eligibility without assuming funding is guaranteed.
Compare the total housing payment, including taxes, insurance, mortgage insurance, and HOA dues where applicable.

Protect the application

Continue making payments on time and keep a record of deposits, transfers, and gifts.
Discuss new credit, financed purchases, co-signing, and employment changes before acting during underwriting.
Document the source of funds used for closing.

Evaluate the property and offer

Review property taxes, homeowners insurance, flood or wind coverage, HOA dues, and maintenance.
Arrange appropriate inspections and confirm the property fits the intended loan program.
Confirm occupancy plans, seller credits, concessions, and closing timelines.

Holly Luca | NMLS #586712 | LendingProf of Loan Factory, Inc. | Company NMLS #320841 | Equal Housing Opportunity.
Educational preparation guide; not an approval or commitment to lend. Program requirements and availability vary.