FAQ – What Is The Maximum Amount I Can Purchase When Using A Down Payment Assistance Program

The maximum purchase price allowed will always be the lessor of

  • The maximum Purchase price (dollar amount) that your first loan program will do for any borrower.
  • Maximum Debt To Income that your first loan (your maximum Loan based on your income)
  • Maximum Debt To Income that your Down Payment Assistance Program allows (your maximum loan based on your income)
  • The maximum dollar amount that is allowed for your Down Payment.


  • Your first mortgage does not have a maximum purchase price, so you can buy any amount of a house.
  • But the next test is your debt to income.  Based on your debt to income the lender of your 1st mortgage tells you you can have a maximum loan amount of “350,000”.
  • You are planing on putting down 50,000 so 350,000 + 50,000 is 400,000 maximum purchase price.
  • However you now decide to get a Down payment Assistance program that gives you silent second of 75,000.  That program lowers your allowable debt to income and says that your maximum loan amount is now only 325,000.  Thus 325,000 + your down payment of 50,000 + your DAP of 75,000 = a new maximum purchase price of 425,000.
  • However your DAP program also specifies no sales price over 400,000.  So you reduce the amount you are going to put down from 50,000 to 25,000 and it looks like this.  325,000 Purchase Price, + 25,000 Down Payment From You + 75,000 DAP = 400,000 purchase price.

With the DAP you kept 25,000 more in your pocket, purchased a home that was 50,000 more that you were originally qualified for, and your payment is significantly lower because you have no payment on 75,000 of the Down Payment Assistance Silent Second loan.

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Want even more information? Watch the First Time Home Buyer Tutorial located in our Video Tutorial Section

Still Have Questions? Call 877-696-7373 x777 or email Don Gardnier at Don@sd4u.com


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