FHA and down payment assistance can work together—but the second mortgage has to fit FHA rules.
Many state, local, tribal, nonprofit and housing-finance-agency programs are designed to pair with FHA. The assistance structure matters: grant, forgivable second, deferred second or amortizing second.
DPA is not one thing
Assistance may be a true grant, forgivable subordinate lien, deferred-payment second mortgage, amortizing second mortgage or another permitted structure. FHA eligibility depends on the provider, source, terms, lien position and applicable Handbook requirements.
Government entities and approved instrumentalities
FHA has detailed secondary-financing provisions for government entities and other permitted providers. The lender must document the provider and terms rather than assuming every “homebuyer assistance” program is FHA-compatible.
Monthly-payment DPA
If subordinate financing requires monthly payments, those obligations can affect DTI. A zero-payment deferred second affects qualification differently from an amortizing second.
Sale and refinance consequences
A DPA second can become due on sale, refinance, payoff, transfer or loss of occupancy—or can forgive over time—depending on that program. FHA eligibility does not erase the DPA provider's separate repayment rules.
Official FHA policy baseline
Primary source: HUD/FHA Single Family Housing Policy Handbook 4000.1. HUD identifies it as the consolidated, comprehensive source of FHA Single Family policy; the current update was published August 12, 2026.