Down-Payment Grant at Closing Test
Learn how down-payment grants can make homeownership accessible and affordable.
Understanding Down-Payment Grants
DPA Grant at Closing: what Minnesota buyers actually ask
A true grant — not a forgivable loan — that covers 3.5% of your purchase price with nothing to repay, ever.
What is the DPA Grant at Closing program?
It's a true down payment grant — 3.5% of the purchase price, 100% forgiven the day of closing, with no repayment ever required.
Unlike the 3-year forgivable option, this program isn't structured as a lien at all. There's no silent second mortgage sitting on title and no equity-sharing arrangement — the money simply reduces what you need to bring to closing and is forgiven immediately, not over time.
"True grant" is the key distinction from other DPA options. Compared to the 3-year forgivable program, the difference is timing and structure: this one has no waiting period and no risk if you move or refinance, since there's nothing left to forgive after closing day.
How much can I receive, and is there any repayment?
3.5% of the home's purchase price, and none of it is ever repaid.
Because there's no lien or second mortgage attached, there's no balance to track, no note date to watch, and no scenario where selling or refinancing early triggers a payback — the grant is simply gone once it's used.
Which percentage a buyer qualifies for still depends on their loan scenario, so this is a number to confirm case by case rather than assume.
What credit score do I need?
A minimum FICO score of 620.
That threshold is slightly more flexible than the 3-year forgivable program's 640 minimum, which makes sense given this grant is paired with FHA 203(b)/Renovation loans — a loan category already built to accommodate a wider credit range.
620 is the floor to qualify for the grant itself; the underlying FHA loan will still have its own full underwriting review beyond credit score alone.
What loan types can this be paired with?
A standard FHA 203(b) loan or an FHA Renovation loan.
FHA 203(b) is the standard FHA purchase loan, and pairing the grant with it (or its renovation variant) keeps the program aligned to FHA's existing down payment and underwriting framework rather than requiring a separate approval process.
Buyers considering renovation work as part of their purchase should specifically ask about the FHA Renovation loan pairing — it's easy to overlook that this grant supports fixer-uppers, not just move-in-ready homes.
Can this be combined with seller concessions?
Yes — it's stackable with up to 6% in seller concessions toward closing costs.
Since the grant covers the down payment side and seller concessions cover closing costs, combining the two addresses both cash-to-close obstacles at once, which is often what actually keeps a qualified buyer from being able to purchase.
Getting a seller to agree to 6% in concessions is a negotiation, not a guarantee — it depends on market conditions and how motivated the seller is, so this stacking benefit is most powerful in a buyer's market or with a motivated seller.
How does the grant money actually get to closing?
The lender orders the funds once the loan receives a clear-to-close, and they're wired directly to the closing table.
Tying the fund order to clear-to-close, rather than earlier in the process, ensures the grant is only disbursed once the loan is fully underwritten and approved — protecting both the buyer and the program from funding a deal that falls through.
Because funding happens at the clear-to-close stage, buyers shouldn't expect to see or access this money any earlier in the process — it's a closing-day mechanism, not something available during the offer or underwriting stages.