New Hampshire Housing Finance Authority has helped 55,000 families buy homes and financed nearly 16,000 multifamily units on top of that. Those are lifetime numbers since the organization’s 1981 inception, with zero clarity on what “helped” or “financed” actually means.

I’ve also been seeing a lot of local mortgage people tiktoking about how they can get you free money anywhere from $5,000 to $15,000 in down payment assistance through New Hampshire Housing’s Cash Assistance Program.

I’ve begun to notice a pattern here: the numbers sound maybe too generous?

THE FOOTNOTE

Real estate without the real-estate-speak.

A Coffee With Steve Publication

And those figures are quite like another number that severely gets under my nerves: the claim that homeowners who sell without a Realtor lose 10 to 15% of their sale price, according to the National Association of Realtors. That statistic is self-reported, and we are asked to trust an organization that profits from people hiring a Realtor. We have no idea whether a home seller who goes it alone actually leaves money on the table because those sales numbers aren’t being accurately reported anywhere.

New Hampshire Housing is not unique. Similar programs exist across the U.S.

In Arizona, the Home Plus program is one of the most lauded, offering up to 5% of the loan amount as a forgivable second mortgage, fully erased after three years if the homeowner stays put. Indiana’s Next Home delivers a 3.5% second mortgage that’s forgiven after two years. Missouri provides a 4% forgivable loan wiped clean after ten years, while New Jersey’s First-Time Homebuyer Down Payment Assistance gives $15,000 forgiven after five, explicitly funded by a state budget allocation. Massachusetts’s $50,000 forgivable loans also rely upon direct legislative appropriations.

Georgia and Michigan keep their programs self-sustaining through “forever-payable” silent seconds—zero-interest loans due upon sale or refinance—essentially allowing buyers to borrow their own down payments in advance. These states defend the approach as pragmatic fiscal policy.

Before August 2025, NHHFA’s down payment assistant programs resembled more along the lines of Arizona, Missouri, Indiana. Zero percent interest, no payment public-mission subsidy—a forgivable, quasi-grant that converted into homeowner equity if you stayed in the home for five years. It treated affordability as wealth-building: help someone buy, let them keep the benefit, and trust that stable ownership strengthens both the household and the community.

After August, NHHFA joined Georgia and Michigan in the “forever-payable” camp. By removing forgiveness but maintaining the lien, in effect creating a secondary mortgage on the property, NHHFA reframed the same money as a revolving asset. The homeowner still gets in the door, but help is temporary and recycled back to NHHFA to fund future borrowers.

The median loan amount for NHHFA borrowers in 2024 was around $300,000. Meanwhile, the average statewide closed sale price is about $640,000. NHHFA borrowers sit well below the state’s median home price because the programs are capped by income limits, price ceilings, and debt-to-income thresholds that deliberately restrict buyers to low and moderate-income households.

In an already tight-inventory environment with roughly 2,500 homes on the market at any given time, that shopping budget provides you with about 370 possibilities to choose from.

NHHFA’s Home First / Home Preferred Plus program rules:

• Income caps: typically up to 80% of Area Median Income (AMI) for Home First, or as high as $167,800 in high-cost counties under Home Preferred Plus.

• Credit score: minimum 620–640, depending on loan type (FHA, VA, USDA, or conventional).

• Out-of-pocket Down payment: as little as 1% of your own funds.

• Debt-to-income (DTI): generally under 50%, including the second lien.

• Homebuyer education: mandatory completion of a HUD-approved course.

• Purchase price cap: varies by county, roughly $480K–$515K for single-family in 2025, but many borrowers stay below $350K so they don’t end up house poor.

In immediate terms, the program allows buyers to purchase sooner and with less personal savings, sidestepping years of rent payments. It directly reduces the upfront cash burden, making the difference between qualifying for a mortgage and remaining locked out of ownership. Borrowers also benefit from competitive first-mortgage rates through NHHFA’s bond-funded channels and mandatory homebuyer-education courses that aim to reduce default risk. Even under the new repayable structure, this upfront relief still functions as the key gain—buyers are supposed to be able to enter the market with almost no liquid capital while leveraging state-subsidized interest rates and closing-cost support.

The trade-off is that these consumer gains are short-term by design. The program provides liquidity and access, not lasting wealth. The value proposition is front-loaded by helping at the closing table and in the first few years of mortgage payments, but can sink long-term affordability once repayment becomes due. And full-amount repayment does become due. If you have to sell because of a life change, are foreclosed upon on, or you simply decide to refinance, you have to pay off the entire enchilada. Or the day you finally pay off your entire primary mortgage, the NHHFA secondary mortgage must be paid in full that day as well.

Top 5 New Hampshire Towns to Maximize Your NHHFA Down Payment Assistance

• Keene

• Rochester

• Swanzey

• Manchester

• Franklin & Hillsborough tied

Not a grant, nor a profit-seeking loan, but in no definition of the word is this free money.

The down payment assistance can be built into the rate structure of the primary mortgage. That is, NHHFA or any Housing Finance Agency could choose to use mortgage-backed securities to fund both the primary mortgage and the DPA, raising the primary mortgage’s interest rate to cover the cost of free. In 2016, the HUD’s Inspector General bared this out, discovering higher rates and/or fees were charged to fund the DPA, resulting in not only higher mortgage payments overall, but increased risk for the borrower. Thus, the home purchaser paid more over time than they would have if they had not used the DPA. Basically, benefiting bond investors at the expense of individual homeowners’ monthly budgets.

And honestly, anytime someone whispers in my ear “mortgage-backed securities,” I tend to get shaky PTSD 2008 flashbacks.

In turning forgiveness into debt, the state traded trust for collateral. The homeowner is no longer a partner in community building but a temporary custodian of public investor capital.

NHHFA issues tax-exempt mortgage revenue bonds to fund the primary mortgages. Those bonds are bought by private investors—banks, mutual funds, insurers—looking for safe, government-backed yield. The Authority then recycles the interest spreads (the difference between what an institution pays for money and what it earns when that money is lent out) along with servicing fees, and investor premiums into its operations, including the down-payment-assistance pool.

NHHFA raises capital by selling tax-exempt mortgage revenue bonds. Investors buy those bonds and receive, say, 3% interest on their money.

NHHFA then lends that same money to homebuyers as mortgages that might earn 5% interest.

The spread — the 2 percentage-point difference between the 5 % it collects and the 3 % it pays — is the interest spread. That spread covers NHHFA’s operating costs, program subsidies (like down-payment assistance), and reserves for future loans.

The DPA becomes a loan mechanism not to benefit the consumer but designed to keep NHHFA’s bond portfolio liquid as a quasi-state investment bank that monetizes public purpose through the bond market.

That, by the way, is the definition of state capitalism: the government deploying capital, trading in securities, and extracting surplus from the market it claims to democratize, government acting as investor, underwriter, and market participant all at once.

And the DPA program in New Hampshire feels way more like that lender who defers your car payment in a financially tight month. They’re not forgiving anything. They’re restructuring time in their favor by moving your payment out, charging compounding interest on a larger principal, and branding it as mercy. You get short-term relief, they get long-term yield.

It’s the same kind of benevolent debt alchemy: liquidity today, leverage tomorrow.

And let’s be blunt. These structures—down-payment assistance, bond-backed first mortgages, forgivable secondary mortgages—keep housing stock and volume moving. DPA programs expand the eligible pool of potential home buyer clients for both mortgage brokers and Realtors.

These programs work for the industry because they lubricate transactions, pad metrics, and let everyone appear altruistic while staying comfortably inside a profit-driven model. And look, I’m not saying don’t take advantage of a DPA program. I’m just saying, beware of exactly what you’re getting into, and know that when someone says free, in the long run, it’ll cost you money. The irony, of course, is that the very system marketed as helping the little guy depends solely on the little guy taking on structured debt that keeps agents, brokers, lenders, and underwriters in motion.

Capitalism with a halo.

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About this publication.

Coffee with Steve is an independent publication by Steve Bargdill. Views are my own and do not represent Keller Williams Coastal & Lakes & Mountains Realty (“KWCLM”) or any other organization. Each Keller Williams Office is Independently Owned and Operated.

Not advice. Content is informational and educational; it is not legal, tax, or financial advice and does not guarantee results. Talk to a licensed professional who knows your situation before you act.

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You can reach Keller Williams Coastal and Lakes & Mountains Realty at 603-610-8500 or Steve Bargdill directly at 603-617-6018.

Steve Bargdill | Realtor & Author | Seacoast NH | Licensed in NH as Stephen Bargdill Jr., with Keller Williams Coastal & Lakes & Mountains Realty.

Pronouns: he, they