Down Payment · 7 min read
A Practical Guide to Down Payment Assistance
How grants, second liens, and state programs actually work, and when they're worth using.
Corie AdamsClient Login (opens in a new tab)Get Pre-Approved (opens in a new tab)
Lending Team|Personalized Mortgage Experience
Results update as you type. Use the arrow keys to review suggestions and Enter to open one.
Specialized Financing
When your assets say yes and your tax return says no
Asset based qualification, often called asset depletion, is a way of reviewing eligible assets as part of mortgage qualification. It is a method, not a product, and it is never automatic.
Corie Adams · Producing Branch Manager · NMLS #1875205
Who this is for
Whether this fits the plan you have.
The common thread is a gap between what someone can comfortably afford and what a monthly income figure shows on paper.
Retirees with substantial accounts
Money is there, distributions are small or not running at all, and the monthly figure looks thin. The sequencing of a whole move is covered on Home Financing After 55.
Buyers who paid off the last house
Low expenses and a large savings position, with an income number that never had to be impressive.
Business owners between liquidity events
Proceeds from a sale are sitting in accounts while current income is modest. If deposits tell the better story instead, look at qualifying on business deposits.
Investors living on portfolio proceeds
Spending comes from savings and repositioning rather than from a scheduled payment that a lender can document as income.
Households with a large down payment
The purchase would use a fraction of what is available, and the remaining balance is the part of the story a standard income review does not capture.
Anyone who assumed the answer was no
The most expensive move is quietly lowering the price range before anyone has reviewed the documents.
How it works
The path, step by step.
The order matters more than most people expect. Nothing here is a preapproval, and no structure is chosen before the documents are reviewed.
Separate the money into what a file actually does with it
Income already being received. Income expected to continue. Funds needed for closing and reserves. Eligible assets that may support a calculated qualifying amount. Those are four different questions.
Identify the documented sources first
Social Security, a pension, an annuity, scheduled distributions, interest and dividends, rental income. Each has its own documentation and continuance rules, and many files qualify on these alone.
See whether an asset based calculation is available
Whether eligible assets may be converted into a monthly qualifying amount depends on the program, the agency or investor, the account type and your circumstances. Availability is confirmed against the program you are actually using, not assumed.
Account for the money leaving the account
Funds used for the down payment, closing costs and required reserves are spent once. They cannot also be treated as still standing behind a future income calculation.
Compare it against the plain conventional path
Sometimes a documented distribution, a co-borrower, a different price point or a larger down payment produces a cleaner file. The method is a tool, not a destination.
Application, underwriting, closing
Once a structure is chosen, the file moves like any other mortgage, with the income documentation built around the sources we identified.
Start with a real number, not an estimate.
A pre-approval reviews your income, assets, and credit so you know the price range you can actually work with before you tour a home or sign a builder contract.
Requirements at a glance
What underwriting looks at.
I will not publish numbers I cannot verify. What follows is what the review looks at, not a set of thresholds.
- What is being reviewed
- Eligible assets, ownership, access, and the documentation that supports each source
- Calculation
- Set by the applicable program, agency or investor; not a fixed formula I can publish
- Eligible accounts
- Varies by program and account type; not every account qualifies
- Age related rules
- May apply depending on the program and the account; confirmed against current guidelines
- Funds for closing and reserves
- Accounted for separately from any amount used in an income calculation
- Property and occupancy
- Primary residences, second homes and investment properties are treated differently
- Where it applies
- Pennsylvania and the other states Corie is licensed to serve, subject to program availability
Percentages, seasoning periods, minimum balances, ratios and qualifying formulas are deliberately not listed here. They are program specific, they change, and publishing a number that does not match your file would be worse than publishing nothing. Nothing on this page is a commitment to lend or an approval of credit.
Costs and assumptions
What it costs, and what we assumed.
Costs follow the same categories as any mortgage. The parts worth thinking about early are the ones that happen outside the loan file.
Down payment and closing costs
Whatever is used at closing leaves the accounts permanently, which changes both the cash picture and any calculation that depends on remaining balances.
Moving money before you talk to anyone
Consolidating accounts, selling a position, or sweeping a balance into checking creates sourcing questions in the file, and some moves carry tax consequences that do not reverse.
Rate and terms
Pricing depends on the program, the property, credit and the structure chosen. Those are quoted against a real file rather than published here.
Common misconceptions
What people get told, and what is actually true.
Often heard
A large balance is income.
In practice
A balance is a number. Qualifying income is a monthly amount that can be documented and is expected to continue. Nothing converts one into the other by itself.
Often heard
Asset depletion is a special loan product.
In practice
It is a way of calculating qualifying income within a program, not a product with its own brochure. That is why the answer depends on which program the file is running under.
Often heard
Every lender treats the same account the same way.
In practice
Agencies and investors do not handle accounts identically. When two guidelines differ, the honest answer is that they differ and your file has to be reviewed under the one you are using.
Often heard
If my income is low, I should not bother applying.
In practice
The review is what tells you. Plenty of files become workable once income, assets and documentation are looked at together. If the move is also a downsizing move, start at Home Financing After 55.
A quiet first step
Not ready to apply. Just want to know what counts.
Send me a short note and I will tell you which income sources and eligible assets are worth documenting, and which questions still need verification. No credit check, no application, no numbers required here.
Ready sooner than that? Get Pre-Approved (opens in a new tab).
Questions
Asked at the kitchen table.
From the Learning Center
Related guides.
Reads that answer what buyers ask before they ever tour a home.
Getting Ready · 6 min read
Pre-Approval vs. Pre-Qualification
The difference matters more than the words suggest, especially when you're competing for a home.
First-Time Buyer · 9 min read
The First-Time Homebuyer's Timeline
A month-by-month look at what buying your first home actually feels like, from the first conversation through closing day.
Client Stories