If you’re buying your first home in Phoenix, Sacramento, Denver, or Omaha, there’s a decent chance a state down payment assistance program can shrink or eliminate what you need to put down. Arizona has Home Plus, California has CalHFA, Colorado has CHFA, and Nebraska has NIFA. Each one pairs with an FHA, conventional, or VA loan and offers assistance as a low-interest second loan or a grant. The catch: income limits, minimum credit scores, and a homebuyer education class. Here’s how each program actually works and how I help clients stack them with their first mortgage.
What “first-time buyer” really means to these programs
Most people assume “first-time buyer” means you’ve literally never owned a home. That’s not quite right. In almost every state program I work with, you qualify as a first-time buyer if you haven’t owned a primary residence in the past three years. So if you sold a house in 2020 and have been renting since, you’re still eligible in 2024. This trips up a lot of people who assume they’re disqualified when they’re not — always worth checking before you count yourself out.
Arizona: Home Plus Program
The Arizona Department of Housing’s Home Plus program is the one I use most often with Phoenix, Tucson, and Mesa buyers. It provides down payment and closing cost assistance as a soft second loan, meaning it doesn’t require monthly payments — it’s repaid when you sell, refinance, or pay off the first mortgage.
- Pairs with FHA, VA, USDA, or conventional first mortgages
- Income limits vary by county and household size
- Minimum credit score requirements typically run higher than a standard FHA minimum
- Requires a homebuyer education course, usually completed online
One thing I tell Arizona clients: the assistance amount is a percentage of your loan, not a flat dollar figure, so run the math with your loan officer before you assume it covers everything.
California: CalHFA
California’s cost of entry is steeper, so CalHFA offers a few different tools depending on the market — Sacramento looks very different from a coastal county. Two programs I see used most:
- MyHome Assistance Program — a deferred-payment junior loan for down payment or closing costs, typically a percentage of the purchase price or appraised value
- Forgivable Equity Builder Loan — assistance that can be forgiven if you stay in the home for a set period, aimed at income-qualified first-time buyers
CalHFA loans are income-limited by county, and those limits are set higher in expensive metros than in inland areas — which makes sense, but it also means a Sacramento buyer and a Bay Area buyer might see very different eligibility even at similar household incomes. CalHFA generally requires the first mortgage to also come through a CalHFA-approved lender, so not every lender combination works. Worth confirming early, not after you’ve fallen in love with a house.
Colorado: CHFA
Colorado Housing and Finance Authority (CHFA) is a strong option for Denver metro buyers, and it’s also used heavily in Colorado Springs and along the Front Range where home prices have climbed faster than wages. CHFA offers down payment assistance as a second loan, and it typically comes in as a percentage of your first mortgage amount, repayable over time or due on sale/refinance depending on the specific program you land in.
What I like about CHFA is the flexibility on property types — it works with single-family homes, condos, and in some cases manufactured housing, which matters in markets where condos are often the realistic entry point for a first buyer. Income limits and purchase price limits apply and vary by county, and CHFA requires the homebuyer education course as well.
Nebraska: NIFA
Nebraska Investment Finance Authority (NIFA) programs are, in my experience, some of the more straightforward down payment assistance options out there — helpful for Omaha and Lincoln buyers who don’t want to wade through a dozen overlapping program names. NIFA’s Homebuyer Assistance Program typically provides a set amount toward down payment and closing costs, structured as a second loan with its own repayment terms.
Nebraska’s income and purchase price limits tend to be more forgiving relative to local home prices than what you’ll see in California, simply because the housing market there is less expensive. That doesn’t mean the assistance is any less useful — it just means more buyers tend to qualify.
How to Combine State Down Payment Assistance With FHA or Conventional Financing
This is the part people get confused about. State down payment assistance is not a substitute for your first mortgage — it’s a second loan or grant layered on top of an FHA, VA, USDA, or conventional loan. Here’s a simplified, hypothetical example of how it might work for a buyer purchasing a $350,000 home:
- First mortgage (FHA, 96.5% loan-to-value): roughly $337,750
- Down payment assistance second loan covers most or all of the required 3.5% down payment
- Buyer brings cash primarily for closing costs and reserves, not the down payment itself
The exact numbers depend on the program, your credit profile, and current guidelines — this is illustrative only, not a quote. HUD’s overview of home-loan and down payment options is a good starting point if you want the federal-level picture before we get into state specifics. But the structure is consistent: your first mortgage still has to meet FHA or conventional underwriting on its own merits. The state program doesn’t relax your debt-to-income ratio or credit requirements for the first loan; it just reduces or eliminates the cash you need at closing.
Who typically qualifies
Requirements vary, but state down payment assistance programs like Home Plus, CalHFA, CHFA, and NIFA share common threads:
- Household income at or below the program’s limit for your county and family size
- Minimum credit score, often somewhat higher than the bare minimum for the underlying FHA or conventional loan
- Completion of an approved homebuyer education course
- Purchase price under the program’s cap, which is usually tied to local median home values
- Intent to occupy the home as a primary residence — these programs aren’t for investment or vacation properties
All of this is subject to credit approval, and program terms change from year to year as funding is renewed, so I’d never quote you exact numbers in a blog post — that’s a conversation for underwriting, not marketing copy.
FAQ
Can I use state down payment assistance with a VA loan?
In most cases, yes — Home Plus, CHFA, and NIFA all have combinations that work with VA financing, though since VA loans often require no down payment anyway, assistance there is usually applied toward closing costs instead.
Do these programs require repayment?
It depends on the program. Some are deferred second loans repaid when you sell or refinance; others are partially or fully forgivable if you stay in the home for a required period. Read the specific program terms — don’t assume “assistance” means “free money.”
What if I don’t qualify for state assistance — are there other options?
Yes. Standard FHA loans with as little as 3.5% down, or conventional loans with as little as 3% down for qualified first-time buyers, are still solid paths even without state assistance layered on top. It’s worth getting pre-approved to see what you actually qualify for before assuming assistance is your only route into homeownership.
Thinking about your next move? Get a fast, no-pressure look at your options with a licensed Loanatik officer. Start here →
This article is general education, not financial advice or a commitment to lend. Loan programs, terms, and availability are subject to credit approval and may change. Loanatik LLC is an Equal Housing Lender. See our licensing & disclosures.