Worried you need 20% down to buy a home in Los Angeles County? You have options. With the right down payment assistance, you can lower upfront costs and move forward with confidence. In this guide, you’ll learn the main types of assistance, how they work with mortgages, where to find programs, and the exact steps to apply. Let’s dive in.
What down payment help looks like
Down payment assistance (DPA) comes in several forms. Each type has different rules for repayment and eligibility.
- Grants. One-time funds you do not repay. Funds are limited and often first come, first served.
- Forgivable loans. A second mortgage that is forgiven after you meet the time-in-home and program rules.
- Deferred or zero-interest seconds. No monthly payment. You repay when you sell, refinance, or pay off the first mortgage.
- Repayable second mortgages. A monthly-payment second loan, sometimes at low or zero interest.
- Gift funds and family help. Allowed by many loan programs with proper documentation of the source.
- Employer-assisted housing. Some large employers and universities offer grants, forgivable loans, or shared equity for employees.
- Mortgage Credit Certificates (MCCs). A tax credit that can reduce your federal income tax liability and improve monthly cash flow.
- Matched savings and nonprofit programs. Community groups may match your savings for down payment.
- Conventional program DPA and lender credits. Certain lenders and community organizations offer DPA that can work with FHA, VA, USDA, or conventional loans.
How programs pair with mortgages
DPA must align with your primary mortgage. Always confirm with your lender early.
FHA loans
FHA financing allows gifts, grants, and many DPAs. The minimum 3.5% down can often be covered by permitted assistance. Lenders document the source and confirm program approval. For broader federal guidance, review resources from HUD.
Conventional loans
Low-down-payment options like HomeReady and Home Possible allow approved DPA sources. For rules and updates, check Fannie Mae and Freddie Mac. Borrower contribution and reserve requirements can vary by program.
VA loans
Eligible veterans can buy with 0% down using VA financing. Some assistance and seller contributions are permitted if they meet VA rules. Learn more from the U.S. Department of Veterans Affairs.
USDA loans
In eligible rural areas, USDA loans can be 0% down. Assistance can sometimes help with closing costs and other allowed uses. See USDA Rural Development for program information.
Layering DPA and lender overlays
Many DPAs are designed to be combined with FHA, conventional, VA, or USDA loans. Even if a program is technically eligible, individual lenders may apply stricter credit or documentation standards. Confirm your combination with a DPA-aware lender early.
Who qualifies in LA County
Specific rules vary by program. Expect several of the following:
- Income limits tied to Area Median Income (AMI), often 80% to 120% AMI depending on the program and household size.
- First-time buyer definition commonly means no ownership in the last three years. Some programs have exceptions.
- Purchase price limits that reflect local market conditions and program goals.
- Property and occupancy rules requiring the home to be your primary residence. Single-family homes, some condos, and PUDs are typically eligible.
- Minimum borrower contribution of your own funds in the 1% to 3% range for some programs.
- Credit and DTI standards that follow lender and program underwriting.
- Homebuyer education from an approved provider prior to closing.
- Recapture or resale provisions that may apply on sale or transfer.
- Documentation and timing requirements, including early reservation of funds.
Where to start your research
Program details change often. Use these trusted sources for current offerings, lender lists, and eligibility:
- State programs from the California Housing Finance Agency (CalHFA)
- Percentage-based assistance through the Golden State Finance Authority (GSFA)
- Countywide options via the Los Angeles County Development Authority (LACDA)
- City-specific programs from the City of Los Angeles Housing + Community Investment Department
- Federal guidance and local program links on HUD
- Consumer tips and scam warnings from the Consumer Financial Protection Bureau
- Conventional loan program requirements at Fannie Mae and Freddie Mac
- Local counseling help through HUD’s Find a Housing Counselor tool
Step-by-step timeline
Follow this roadmap to stay organized and on time.
- Assess eligibility and goals
- Estimate your household income vs. AMI, target neighborhoods, and whether you meet the first-time buyer definition. Note any profession-based or location-based preferences.
- Complete homebuyer education
- If required, finish this early so you can reserve funds as soon as you enter escrow.
- Contact a DPA-experienced lender or counselor
- Ask if the lender is approved for CalHFA, GSFA, or local programs. A HUD-approved counselor can provide personalized guidance.
- Get pre-approval and confirm compatibility
- Lock in a mortgage pre-approval while verifying that your chosen DPA is acceptable to both the lender and the program.
- Find a home and reserve funds early
- Many programs are first come, first served. Funds may need to be reserved shortly after your purchase contract is signed.
- Submit documentation
- Prepare income verification, asset statements, ID, purchase contract, and homebuyer education certificate. Keep copies organized for both the lender and the DPA administrator.
- Close with confirmed DPA funding
- Your DPA is typically wired to escrow at closing. Coordinate timing with your lender and escrow team to avoid delays.
Tradeoffs to weigh
DPA can be a smart tool, but understand the fine print.
- Repayment timing. Deferred and forgivable loans often come due if you sell, refinance, or move before the forgiveness period ends.
- Resale or recapture provisions. Some programs include affordability covenants or shared equity. Read the terms closely.
- Interest rate and fees. DPA does not automatically raise your mortgage rate, but some lenders may price complex loans differently. Compare APRs.
- Program availability. Funds can run out. Apply early and have a backup plan if a program pauses.
- Documentation workload. Expect detailed income and asset verification and allow time for processing.
Quick checklist
- Confirm first-time buyer status and AMI-based income eligibility.
- Review CalHFA, GSFA, LACDA, and City of LA offerings.
- Finish required homebuyer education.
- Choose a lender approved for your target DPA.
- Get pre-approved and verify program compatibility.
- Reserve funds early after contract acceptance.
- Keep documentation organized through closing.
Local insight for Antelope Valley buyers
If you are shopping in Lancaster, Palmdale, Quartz Hill, Rosamond, or nearby communities, the same DPA categories apply. Purchase price limits and program fit can differ by city and property type, so match your search to the program rules from the start. A local, DPA-aware agent and lender can help you focus on homes that align with the assistance you plan to use.
Buying with less cash up front is possible when you pair the right mortgage with the right program. If you want a clear path from pre-approval to keys, connect with a local guide who understands the rules and the timing. For one-on-one help, reach out to Lori Fischer to schedule a Free Consultation.
FAQs
What is the difference between grants and forgivable loans in LA County?
- Grants do not require repayment, while forgivable loans are forgiven after you meet program rules for a set period; both depend on funding and eligibility.
Can down payment assistance cover closing costs in Los Angeles County?
- Some programs allow funds for closing costs in addition to down payment, but others limit use to down payment only; read the specific program guidelines.
How do income limits for LA County DPA work?
- Most programs use Area Median Income thresholds that vary by household size; check the administrator’s website for current limits and rules.
Do I need a certain credit score to use DPA in LA County?
- You must meet the lender’s credit and debt-to-income standards; DPA does not replace underwriting requirements.
Can I combine down payment assistance with a VA loan?
- Some assistance can be combined with VA financing if it meets VA rules; confirm details with your lender and review guidance from the U.S. Department of Veterans Affairs.
How long does it take to receive DPA funds in Los Angeles?
- Timing depends on the program and documentation; funds are often reserved during escrow and wired at closing, so apply as early as possible.
Where can I find a trusted housing counselor in LA County?
- Use HUD’s Find a Housing Counselor tool to locate HUD-approved agencies that provide free or low-cost guidance on programs and the purchase process.
