As you begin to look for properties you can afford, it has probably become obvious to you that there is a growing "affordability gap" in the Bay Area. A growing number of cities, counties, school districts and employers are able to help close that gap for a few buyers with Down-Payment Assistance loans (aka DPAs). For qualifying households, a DPA can make up the difference between the price of the home you are trying to buy and the amount of mortgage financing you can afford.

Here's more detail. To keep the DPA from making your total monthly housing costs unaffordable, you usually don't have to make any payments for five to ten years. Also, the interest rate is usually lower than the current market rate. In exchange for these favorable terms, and to make sure the money in there is enough money in the loan fund to help the next household when you pay your loan off, the program sponsor sometimes takes a share of the appreciation (increase in property value) when you pay off the loan. This is usually just proportional to how much the sponsor helped out: if your DPA closed a gap that was 20% of the cost of the property, then the sponsor's share of the appreciation
would typically be 20%.

Each DPA program is a little different. Our Directory of Bay Area Affordable Homeownership Program provides links or contact information to many excellent programs.

To find out more about a Down Payment Assistance Program near you, please select one from the left menu.