DPA Program ROI Calculator
Calculate ROI of down-payment-assistance programs: forgivable grants, second mortgages, deferred-payment loans. See net benefit after rate penalty.
| DPA Type | — |
| DPA Cash Value | — |
| Extra Rate Cost Over Stay | — |
| Forgiveness / Repayment Impact | — |
| Net Benefit | — |
Down Payment Assistance (DPA) programs help first-time and low-income buyers cover down payment + closing costs. Most programs come with a higher first-mortgage rate (0.25-0.75% above market) — the trade-off must be carefully analyzed. Forgivable grants (5-year occupancy) often beat deferred or amortizing 2nd mortgages. Source: HUD, NCSHA Annual Survey.
DPA Program Types
(1) Grant — no repayment ever. Rare, typically only for very low income or specific localities. (2) Forgivable — second mortgage forgiven after 5-10 years of owner-occupancy. Most common form. (3) Deferred — second mortgage with zero payments until home is sold or refinanced. Acts as silent partner. (4) Amortizing — second mortgage with monthly payments at low rate (1-3%). Acts as low-cost extra loan.
The Hidden Rate Penalty
Most DPA programs require the first mortgage to come from an approved lender, at a higher rate (typically 0.25-0.75% above market). Calculate the rate penalty over your expected hold period: a 0.5% penalty on $300k for 7 years costs $10,500 in extra interest. If DPA is $10,000 grant, net benefit is only $500 — easily flipped negative if mortgage insurance is added.
When DPA Wins Big
DPA wins when: (1) program offers FORGIVABLE grant of $10,000+, (2) you plan to stay 5+ years to satisfy occupancy requirement, (3) the rate penalty is small (<0.375%). DPA loses when you might move sooner, the program is deferred/amortizing (recapture eats benefit), or the 1st-rate penalty is large (>0.75%). Always compute net benefit for YOUR stay duration before deciding.
Last updated May 2026. Sources: HUD Mortgage Rules, NCSHA DPA Database.