As the year comes to a close, states are adding more down payment assistance (DPA) programs to help first-time buyers acquire homeownership.
Deposit source – a national database to connect potential homebuyers with financial assistance programs – recently released its latest Homeownership Program Index (HPI) report, based on data collected in the third quarter of 2024.
The report notes 29 new DPA programs – an increase of 1.2% from the previous quarter and an increase of 8% from the end of last year. The total number of programs is 2,444. California stands out for having the most incubator programs and available financing. Programs specifically designed for first-generation homebuyers also increased 5% between the second and third quarters.
DPR pointed out that first-time homebuyers 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 payments for first-time buyers and additional resources.
Rob Chrane, founder and CEO of Down Payment Resource, said more programs equal better, more targeted help for first-time buyers.
“We are excited to see a growing number of these programs, and believe they are becoming a targeted way to help first-time and first-generation homebuyers who are struggling to save for a down payment get a home they can afford ,” Chrane said in a statement. “Our data shows that the average DPA benefit is approximately $17,000. That can be a great stepping stone to saving for a down payment and other homeownership costs.”
Newly added DPA programs also target first-time homebuyers through access to below-market homes.
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% compared to the second quarter. Municipalities are still the main source of DPA financing, representing 39% of all sources, followed by non-profit organizations with 21% and housing finance institutions with 19%.
Borrowers seeking assistance for multi-unit properties also have more options compared to the second quarter. DPA programs supporting the purchase of two-, three- and four-unit properties increased 7% in the third quarter of 2024.
Down Payment Resource reported an increase in new buyer assistance programs for each quarter of this year. But as election season draws to a close and mortgage rates continue to fluctuate, program numbers could shift as well.
