Here’s a question we get from many new homebuyers: Do you have to use an Federal Housing Administration (FHA) loan with down payment assistance? The answer is no — there are different types of mortgages available depending on your situation.
Each down payment assistance program has a list of “eligible first mortgages” that can be used with the program. A first mortgage is simply your primary home loan. And your down payment assistance can come in many forms, such as a gift forgiven at closing or a second mortgage — funded by a Housing Finance Agency (HFA), municipality, nonprofit or employer. Most down payment programs accept a range of first mortgages, including conventional, FHA, USDA and VA loans. keep reading