Think a 20 percent down payment is the only way to buy in Pasco? Many buyers in Franklin County purchase with far less cash by using down payment assistance. If you want to buy soon but feel stuck on upfront costs, you are not alone. In this guide, you will learn the types of help available, who offers it locally, how to qualify, and the exact steps to apply. Let’s dive in.
Down payment assistance basics
Down payment assistance, or DPA, helps you cover part of your down payment and sometimes closing costs. Programs can be grants, forgivable loans, or second mortgages that you repay later. Most pair with a traditional first mortgage and have income and purchase price limits. Availability and terms change often, so plan to verify details with the program sponsor or a local lender.
Grants and forgivable loans
Some programs offer funds that are forgiven if you live in the home for a set number of years and stay current on your loan. If you sell or refinance before the forgiveness period ends, you may repay part or all of the assistance. Forgivable help is popular because it usually does not add a monthly payment. Funding can be limited and first-come, first-served.
Deferred or low-interest seconds
Other programs offer a second mortgage that is either zero interest or low interest. You typically repay this second when you sell, refinance, or reach the end of your first mortgage term. Some seconds require no monthly payment, while others do. Ask how the second affects your total loan-to-value and your future options to refinance.
Tax-based help with MCCs
Mortgage Credit Certificates, or MCCs, reduce your federal tax liability by giving you a credit based on a portion of the mortgage interest you pay. An MCC is not cash at closing, but it can improve your monthly cash flow over time. Check current availability and income limits before you count on an MCC.
Loans that reduce down payment
These are not DPA, but they can lower cash needed at closing:
- FHA loans: allow low down payments with mortgage insurance.
- VA loans: available to eligible veterans and active-duty service members with no down payment in many cases.
- USDA loans: offer 0 percent down in eligible rural areas, subject to property and income rules.
Pasco providers to contact
Multiple organizations serve Pasco and the Tri-Cities. Start with these sources to find current options and approved lenders.
Washington State Housing Finance Commission
The Washington State Housing Finance Commission is the primary state agency for DPA and related tools like MCCs. Its programs are often paired with a first mortgage and have income and purchase price caps. You will apply through a WSHFC-approved lender.
City of Pasco and Franklin County
The City of Pasco and Franklin County sometimes offer or fund local assistance, often through Community Development or housing offices. These funds may be grants or forgivable loans targeted to first-time buyers and income-qualified households. Funding can open and close in cycles, so check early and often.
Local lenders and credit unions
Community banks, credit unions, and mortgage brokers in the Tri-Cities may offer their own DPA or participate in WSHFC programs. Many can also advise on stacking assistance from more than one source. Ask if they are approved to offer state products and what proprietary options they have.
Employers and nonprofits
Large employers, public agencies, and local nonprofits sometimes provide grants, forgivable loans, or matched savings. Availability depends on the organization and may require employment or residency in the area. HUD-approved housing counselors can point you to current nonprofit resources and required education.
HUD-approved housing counselors
Counselors offer free or low-cost guidance and homebuyer education that many programs require. They can help you review your budget, credit, and readiness. They also know which programs are open now and how to apply.
Eligibility rules to expect
Each program sets its own limits, but most include the following:
- Income limits based on area median income and household size.
- First-time buyer status, often defined as no ownership in the past 3 years, with some exceptions.
- Purchase price caps for Franklin County that vary by property type.
- Primary residence required. Second homes and investment properties are usually ineligible.
- Credit and debt-to-income standards tied to your first mortgage product.
- Homebuyer education completion from an approved provider.
- Residency or employment rules for some local or employer programs.
- Funding windows that can open and close quickly. Apply early.
Documents you will need
Be ready to verify your identity, income, assets, and the property you want to buy. Most programs ask for:
Identity and Social Security
- Government-issued photo ID
- Social Security numbers for all borrowers
Income and employment
- 30 days of pay stubs
- W-2s for the past 2 years
- Tax returns if self-employed
Assets and funds to close
- Recent bank statements
- Gift letters for any gifted funds
- Grant or DPA award letters if applicable
Property and program items
- Purchase contract and listing details
- Homebuyer education certificate if required
How to apply in Pasco
Follow this local workflow to move from research to approval with fewer delays:
Get your finances organized
- Pull your credit report, fix errors, and note your estimated score.
- Set a target monthly payment and down payment range.
Contact approved lenders
- If you want state assistance, speak with a WSHFC-approved lender.
- Ask local credit unions and community banks which DPA products they offer.
Compare options side by side
- Confirm income and purchase price limits for each program.
- Ask if MCCs are available and how they affect your tax situation.
Complete homebuyer education
- Schedule a HUD-approved class or counseling early so you have the certificate ready.
Get pre-approved and apply for DPA
- Submit documents for pre-approval and request DPA at the same time.
- Reserve funds as soon as your lender allows because some pools run out.
Align your purchase timeline
- Some programs require approval or reservations before or shortly after contract acceptance.
- Share program deadlines with your agent so they align with your offer and closing.
Verify restrictions before closing
- Confirm occupancy requirements, forgiveness timelines, and repayment triggers.
- Keep copies of all program agreements for your records.
Combining programs
Some buyers use more than one tool, such as a state DPA paired with a lender credit. This is called stacking and it depends on the rules of each program and your first mortgage. Your lender will check cumulative loan-to-value limits and investor guidelines. Always ask which combinations are allowed before you write offers.
Impact on payments and rate
Your monthly payment depends on how the assistance is structured. A forgivable or deferred, zero-interest second usually does not add a monthly payment. An interest-bearing or repayable second can add a payment to your housing costs. Some programs tie your first-mortgage interest rate to the assistance, so ask your lender how the rate may change.
If you do not qualify
You still have paths to reduce cash to close:
- Consider FHA, VA, or USDA loans if you meet their eligibility rules.
- Ask your lender about gift funds from family and the documentation needed.
- Check with your employer for any housing benefits.
- Discuss seller-paid concessions that your loan program allows.
- Give yourself more time to save and retest eligibility when a new funding round opens.
Mistakes to avoid
- Waiting to apply until after you are under contract.
- Assuming you earn too much or too little without checking the current limits.
- Skipping homebuyer education when it is required.
- Overlooking property type rules for condos, manufactured homes, or acreage.
- Not telling your agent and lender about program deadlines that affect your closing.
Your next local moves
- Talk with a WSHFC-approved or local Tri-Cities lender about current DPA, MCCs, and loan options.
- Contact the City of Pasco or Franklin County housing offices to ask about any active local assistance rounds.
- Schedule a HUD-approved homebuyer education class to meet program requirements and strengthen your budget.
- Gather your documents so you can reserve funds quickly when you qualify.
If you want a clear game plan tailored to your budget and timeline, connect with a local guide who understands Tri-Cities lending partners and program timing. For introductions to trusted lenders, offer strategy, and neighborhood insights, reach out to Lee Davidson. Let’s connect.
FAQs
What is down payment assistance in Pasco?
- DPA is funding that helps cover part of your down payment or closing costs through grants, forgivable loans, or second mortgages offered by state, local, lender, employer, or nonprofit sources.
Who offers down payment help in Franklin County?
- Common providers include the Washington State Housing Finance Commission, City of Pasco or county housing offices, local lenders and credit unions, employers, nonprofits, and HUD-approved counselors.
Do I need to be a first-time buyer to use DPA?
- Many programs require first-time buyer status, usually defined as no home ownership in the past 3 years, though some have exceptions for certain buyers or locations.
Can I combine DPA programs with my loan?
- Sometimes you can stack assistance if program rules and your first-mortgage investor allow it, subject to income limits, purchase price caps, and loan-to-value limits.
Will DPA affect my monthly payment?
- It depends on the structure: forgivable or deferred zero-interest seconds usually have no monthly payment, while interest-bearing or repayable seconds can add to your monthly costs.
