The number of down payment assistance (DPA) programs for homebuyers has reached an all-time high.
That’s according to the second-quarter 2024 Homeownership Program Index report from Down Payment Resource, which tracks homebuyer assistance programs. In Q2 2024, the number of down payment assistance options rose 2% relative to the previous quarter, while the number of organizations that offer DPA rose by 29 compared to Q1 2024.
The number of organizations using federal money to fund their programs is also increasing.
The American Rescue Plan Act (ARPA) — President Joe Biden’s COVID-19 stimulus package passed in 2021, funded 24 programs in Q2 2024 — which is double the number from a year ago. Programs funded by the U.S. Department of Health and Human Services (HHS) rose 121% in Q2 2024 compared to a year ago.
“It’s very encouraging to see more state [housing finance agencies] allocating ARPA and HHS funds to support homeownership,” Rob Chrane, founder and CEO of Down Payment Resource, said in a statement.
“We think this indicates that local municipalities are increasingly viewing affordable homeownership as a stabilizing force that fosters prosperity within communities. We are also particularly encouraged by the rise in programs targeting first-generation homebuyers to ensure more Americans can achieve the dream of homeownership.”
According to the report, the rise in funding from ARPA is the result of rules tied to the use of hat money. The program authorized $350 billion to state, local and tribal governments, but with the stipulation that the money be allocated by the end of this year and spent by the end of 2026.
First-time homebuyers have 1,445 programs that are restricted to assisting only them, while 970 allow for assistance to repeat buyers. First-generation buyers now have 21 programs dedicated to financial assistance related to buying a home.
At the state level, the number of programs generally tracks with the total population as California, Florida and Texas have the most. Rounding out the top 10 in order are Minnesota, Colorado, Maryland, New York, Ohio, Massachusetts and Pennsylvania.
Down payment assistance is in high demand. Median prices for both new and existing homes are at or near all-time highs, while elevated mortgage rates are making it harder for buyers to find and afford homes.
