Compare two ways to use down payment assistance
One option helps with the down payment only. The other may help with down payment and closing costs, but usually comes with a higher rate.
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Rate Assumptions
DPA + Closing Cost Help typically runs higher, since that rate funds the extra assistance.
Closing cost is defaulted to 2.5% of the purchase price, which covers lender's origination, underwriting and processing, appraisal, escrow, and title insurance. Rate buy downs are not included.
Assumptions: Prepaids & Impounds
15 days of pro-rated interest, 12 months of insurance premiums, and a 3-month reserve for property tax and insurance. Actual amounts depend on your closing date and county.
A seller credit can only be applied to closing costs and prepaids and cannot exceed your actual closing costs. Any excess is not paid to you. Defaults to $0.
Down Payment Assistance Only
Lower Rate
Estimated Cash Needed
$0
You bring the closing costs
DPA + Closing Cost Help
Slightly Higher Rate
Estimated Cash Needed
$0
Down payment and closing costs covered
Credit Requirement
Most down payment assistance programs require a minimum credit score, often around 640 or higher.
The first mortgage is typically an FHA loan, but program rules can vary.
About Down Payment Assistance
Both paths use a deferred second with NO monthly payment, repaid at sale or refinance, at 1% simple interest. DPA + Closing Cost Help adds a second deferred loan, funded by a slightly higher first-mortgage rate.
Want to see if there's a better structure?
I can compare this against FHA and seller credit options for your specific situation.
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