Down Payment Assistance in NC, SC & GA

What is down payment assistance?

Down payment assistance is money from a housing agency, local government, or nonprofit that helps cover your down payment, and often your closing costs, when you buy a home. It is usually tied to a specific first mortgage offered through participating lenders, and it comes with rules about income, credit, the home price, and living in the home as your primary residence.

The most important thing to understand: most state DPA is not free cash. It is usually a second mortgage that sits behind your main loan. The good ones carry a 0% interest rate and no monthly payment, and many are forgiven over time if you stay in the home. Others are simply deferred, meaning you pay them back when you sell, refinance, or pay off the first mortgage.

How DPA combines with FHA, conventional, VA, and USDA loans

State DPA programs are built to sit on top of the standard loan types. What changes is how much help you actually need and which trade-offs come with it.

• FHA. The most common pairing, and the one the Chenoa Fund is built on. FHA needs 3.5% down with a 580 or higher score, and DPA can cover all or most of it. Many state programs set their own higher credit minimum (often 640).
• Conventional. Agency programs often use Fannie Mae HFA Preferred or Freddie Mac HFA Advantage, which can come with reduced mortgage insurance for eligible incomes. With 3% down, DPA can cover the down payment and part of closing.
• VA. VA already allows $0 down for eligible borrowers, so DPA is mostly used for closing costs. Some programs also have veteran-specific options.
• USDA. Also $0 down in eligible areas, so DPA typically helps with closing costs and prepaid items. You still need to meet USDA income and location rules.

How to use down payment assistance, step by step

1. 1

   Check the basics

   Your credit score, household and borrower income, how much you have saved, and roughly where you want to buy. That is enough to rule programs in or out.

2. 2

   Compare DPA vs. no DPA

   Look at payment, cash to close, and the long-term cost both ways. The program compare tool and affordability calculator are a good start.

3. 3

   Confirm who can offer it

   The Chenoa Fund is the assistance I can place. State programs are delivered only through lenders approved for that program, so as a broker I confirm whether one of my wholesale lenders participates before recommending one.

4. 4

   Take the homebuyer course and get pre-approved

   Finish the required education early so it never holds up closing, and get a full pre-approval that reflects the program you plan to use.

5. 5

   Reserve the assistance and close

   Once you are under contract, the lender reserves the program funds. In NC, SC, and GA an attorney handles the closing, and your DPA is recorded as a second lien.

Common questions.

• What down payment assistance can Keith place?

  The Chenoa Fund, from CBC Mortgage Agency, available in North Carolina, South Carolina, and Georgia. It pairs an FHA 30-year fixed loan with a second mortgage for 3.5% or 5% of the sales price or appraised value, whichever is less, with a forgivable option (0% interest, no monthly payment, forgiven after three years of on-time payments) and a repayable 10-year option. Program terms and availability change with market conditions, so I confirm current terms for your file before you count on it.

• Is down payment assistance free money?

  No. The Chenoa Fund and most state programs in NC, SC, and GA are second mortgages. Some are forgiven over time if you meet the terms, and others are repaid when you sell, refinance, or pay off the first mortgage. Read the repayment terms before you commit.

• Do I have to be a first-time buyer to get down payment assistance?

  Not always. The Chenoa Fund has no first-time buyer requirement, and North Carolina's NC Home Advantage Mortgage and South Carolina's Palmetto Home Advantage are open to move-up buyers too. Georgia Dream Standard is aimed at first-time buyers, while Georgia's Peach Plus and Peach Advantage options allow repeat buyers. Definitions vary, so check the program.

• What credit score do I need for down payment assistance?

  It depends on the program. The Chenoa Fund has its own credit and underwriting requirements, which I review with you. NCHFA and SC Housing's Palmetto Home Advantage both list a 640 minimum on their official pages. Your loan type and lender can add their own requirements on top.

• Can I use down payment assistance with an FHA loan?

  Yes. FHA is one of the most common pairings, and the Chenoa Fund is built on an FHA first mortgage. State programs in NC, SC, and GA also work with FHA, and most also work with conventional, VA, and USDA loans. The program's own credit and income limits apply in addition to FHA rules.

• What happens to my assistance if I sell or refinance?

  On most programs, selling, refinancing, or no longer living in the home before the forgiveness or deferral period ends means you repay the remaining balance at that time. On a deferred program like Georgia Dream, you repay the full amount when those events happen. On the Chenoa Fund's forgivable option, refinancing the FHA loan during the first three years can cancel the forgiveness.

• Does down payment assistance raise my interest rate?

  It can. Agency first mortgages are priced by the program, and the version with assistance may carry a slightly higher rate than a comparable loan without it. I show both options side by side so you can see the real long-term cost. I never quote rates on this site because they change daily.

• Can I combine state DPA with seller concessions or gift funds?

  Often, yes, within the limits of your loan type and the DPA program. Seller-paid closing costs and gifts from eligible family members can reduce your cash to close further. Each program has rules about cash back at closing, so we plan the numbers carefully.

• How do I apply for down payment assistance?

  For the Chenoa Fund, you apply with me as part of your FHA loan. State programs are applied for through a lender approved for that specific program, not directly with the state agency, and as a broker I confirm whether one of my wholesale lenders participates before recommending one. Either way, I walk you through any required homebuyer course and the paperwork.