Not every nonprofit calling itself a DPA provider has the same FHA status.
FHA has formal participation rules for HUD-approved nonprofit organizations and governmental entities involved in FHA homeownership activities and secondary financing.
HUD-approved nonprofits
HUD maintains a Nonprofit Roster. FHA-approved nonprofit organizations can participate in authorized Single Family activities such as HUD Homes, the FHA Mortgagor program and secondary financing when their approval/authorization permits it.
Government entities
Federal, state and local governmental entities can participate under FHA rules, but HUD notes that it does not maintain a master list of government-entity DPA providers. The FHA lender is responsible for determining that the governmental provider meets Handbook requirements.
Secondary financing is not automatically a gift
FHA Connection defines secondary financing as financing other than the first mortgage that creates a lien against the property. Even a “soft” or forgivable second can remain secondary financing rather than becoming a gift simply because no monthly payment is required.
Why this matters for DPA
The provider's legal status, FHA authorization where required, lien documents, source of funds and repayment/forgiveness terms all matter. This is why Mortgage Navigator's state DPA pages separate true grants from deferred, forgivable and amortizing seconds.
Source standard
Mortgage Navigator uses HUD/FHA Handbook 4000.1 and current HUD program materials as its policy baseline. Current Handbook update: August 12, 2026. Draft policy is not treated as effective policy.