Down payment assistance: read the fine print.

My honest take

I'll be straight with you: I'm generally not the biggest fan of down payment assistance. It isn't always bad, and for some buyers it's the right move. But it's rarely "free money," and the terms are where people get surprised.

If you're considering DPA, research your state and county programs and make sure you fully understand the terms before you build your plan around one.

The terms to look for

• How long you have to stay. Many programs require you to keep the home and the loan for a set number of years.
• Payback if you sell or refinance. With some programs, if you sell or refinance before that period ends, you owe the assistance back. That can limit your options if rates drop or your life changes.
• Grant, forgivable or second mortgage. Some assistance is a grant. Some is a loan that's forgiven over time. Some is a second mortgage you repay with a monthly payment, or all at once when you sell.
• Rate and costs. Some programs come with a higher interest rate or extra fees than a loan without assistance. Compare the total cost, not just the cash you need at closing.
• Income and price limits. Many programs cap household income and purchase price, and some are only for first-time buyers.
• Homebuyer education. A class is often required before closing, so build that into your timeline.
• Funding and timing. Programs can run out of money or change their rules, and approval can add time.

Where to start your research

Start with your state's housing finance agency and your city or county housing office. HUD lists local resources by state: hud.gov/states.

Other options worth comparing

Depending on the loan program, you may need less down than you think. Some programs allow low down payments, eligible veterans may qualify for $0 down with a VA loan, and USDA loans may offer $0 down in eligible areas. Gift funds from family and seller credits toward closing costs can also help. Sometimes these are simpler than DPA.