HousingWireHousingWire
As the year comes to a close, states are adding more down payment assistance (DPA) programs to help first-time buyers achieve homeownership.
Down Payment Resource — a national database for connecting prospective homebuyers to financial assistance programs — recently released its newest Homeownership Program Index (HPI) report based on data collected in third-quarter 2024.
The report found 29 new DPA programs — a 1.2% increase from the prior quarter and an 8% increase from the end of last year. The total number of programs sits at 2,444. California stands out with the most first-time buyer programs and available funding. Programs designed specifically for first-generation homebuyers also increased by 5% between the second and third quarters.
DPR pointed out that first-time buyers have been “singled out” by presidential candidate Kamala Harris in her housing policy proposal. Harris’ plan would include the addition of 3 million affordable housing units, $25,000 in down payment assistance for first-time buyers and additional resources.
Rob Chrane, founder and CEO of Down Payment Resource, said that more programs equate to better, more targeted assistance for first-time buyers.
“We are pleased to see a growing number of these programs, and think they are becoming a targeted way to help first-time and first-generation homebuyers struggling to save for a down payment get into a home they can afford,” Chrane said in a statement. “Our data shows the average DPA benefit is roughly $17,000. That can be a nice jump-start for saving for a down payment and other costs of homeownership.”
Newly added DPA programs also target first-time homebuyers through access to homes that are priced below market rates.
The report highlighted an 8% quarterly increase in below-market-rate (BMR) and resale programs. BMR homes are sold with deed restrictions — including rental limits and fixed resale prices — in exchange for lower prices.
Grant-funded programs also grew by 7% from the second quarter. Municipalities still lead as the primary source of DPA funding, comprising 39% of all sources, followed by nonprofits at 21% and housing finance agencies at 19%.
Borrowers seeking help for multiunit homes also have more options compared to the second quarter. DPA programs that supported the purchase of two-, three- and four-unit properties rose by 7% in Q3 2024.
Down Payment Resource reported an increase in first-time buyer assistance programs for each quarter of this year. But with the election season winding down and mortgage rates continuing to fluctuate, program numbers could also shift.
