Down Payment Assistance Guide

Down payment assistance (DPA) programs help home buyers bridge the gap between their savings and the amount needed to purchase a home. These programs are particularly valuable in high-cost markets like San Diego, where even a 3% down payment on a $700,000 home requires $21,000. DPA comes in several forms: grants that do not need to be repaid, forgivable loans that are forgiven over time (often 3-5 years), and deferred loans with no monthly payments that are repaid when you sell or refinance. Most programs target first-time home buyers, though some are available to repeat buyers

Income limits apply, but they are often higher than expected - many middle-class families qualify.

The California Housing Finance Agency (CalHFA) offers the most widely used DPA programs. MyHome Assistance provides up to 3.5% of the purchase price as a deferred-payment junior loan. This can cover most or all of an FHA down payment. The loan has 0% interest for the first 30 years, with payments deferred until you sell, refinance, or pay off the first mortgage

CalHFA Zero Interest Program (ZIP) provides up to 3% of the loan amount as a zero-interest loan, forgiven after 3 years if you remain in the home. Income limits for San Diego County are approximately $180,000 for most household sizes, well above median income. CalHFA programs can be combined with FHA, VA, or conventional first mortgages from approved lenders.

The San Diego Housing Commission (SDHC) offers additional assistance for qualifying buyers. The SDHC First-Time Homebuyer Program provides deferred-payment loans of up to $100,000 for down payment and closing costs, depending on income and purchase price. Eligibility requires income at or below 120% of Area Median Income and purchase within the City of San Diego limits. The program has limited funding and periodic application windows

Requirements include homebuyer education courses and owner-occupancy. These programs can significantly expand buying power for qualifying buyers.

Many San Diego employers offer home buying assistance as a benefit. Major employers with known programs include UC San Diego, which offers employee housing assistance loans, Scripps Health and other healthcare systems with employer-assisted housing, and some tech companies with down payment matching or loans. Check with your HR department about available benefits. Some employers offer forgivable loans tied to employment tenure

Others provide direct grants or interest-free loans. These can often be combined with government DPA programs.

Down payment assistance changes the math of home buying but involves trade-offs. Benefits include lower upfront costs enabling you to buy sooner, potentially avoiding PMI with higher effective down payment, and preserving savings for reserves and moving costs. Considerations include that some programs add second mortgages that appear on your credit report, higher total debt may limit your purchase price, and repayment terms kick in if you sell or refinance within program periods. Most buyers find DPA highly beneficial despite these considerations

The key is understanding the specific program terms and how they fit your timeline.

Eligibility varies by program but typically includes income limits where household income must be below program thresholds (often 100-150% of Area Median Income), first-time buyer status meaning you have not owned a home in the past 3 years (exceptions exist), homebuyer education with completion of a HUD-approved course (often 8 hours online), property requirements where the home must meet program guidelines for price, condition, and location, and owner occupancy where you must live in the home as your primary residence. We work with lenders who specialize in DPA programs and can evaluate your eligibility across multiple options.