General Guidelines/Information For Lenders - Atlanta Housing DPA Homeownership Program

AH Down Payment Assistance Subsidy Loan (General Guidelines/Information For Lenders)

The AH DPA Homeownership Program is modeled to mortgage industry standards known as a ‘community second’ or a subsidy assistance loan.  AH will secure a subordinate lien position on the property being purchased.


There is no negative amortization.  Interest will not accrue during the term of the loan.


The subsidy loan cannot be assigned.

DPA Funds

AH subsidy loan must be applied to customary closing costs.  AH subsidy can be used to either: a) reduce the primary loan amount, b) pay for closing costs, c) buy-down the interest rate, or d) as a combination of either a, b, or c.  It cannot be used to subsidize the sales price, or solely used to buy-down the interest rate of the primary loan.  Funds are prohibited from being used to pay-off or to satisfy any outstanding debt of the borrower, at closing.

First-Time Homebuyer

A borrower is eligible as a ‘first-time home buyer if he/she has not owned a home or had an ownership interest in a residential or commercial property in the past three (3) years.


The subsidy loan is completely forgiven after a 10-year term of owner-occupancy.

Geographical Restriction

The property being purchased must be within the ‘City of Atlanta' geographical boundaries. Properties out-side of the geographical restrictions are not eligible.

Gift Funds

Gift funds are permitted, however, gift funds cannot be used in lieu of the borrower’s own funds/investment of not less than $1,500.  Gift funds can be in addition to the borrower’s own $1,500 investment.  AH must be made aware of ‘gift funds’ at the time the credit file is submitted to AH.  AH must be provided with the customary documentation of the donor’s name, address, telephone number, his or her relationship to the home buyer, the dollar amount of the gift, and a statement that no repayment is required or expected.


Eligibility income cannot exceed 80% of the current HUD MSA AMI for metro-Atlanta, and is updated annually by HUD.  If married, the combined income for all borrowers, on the primary loan, cannot exceed the maximum 80% of current AMI, even if only one spouse or partner is on the note; if two or more unrelated buyers will be on the primary loan, the combined income for all borrowers cannot exceed the maximum 80% of current AMI.

  • Wages/earnings/W-2 income cannot exceed max eligible income of 80% of the current AMI
  • Self-employed (Schedule C) gross income (not the adjusted income with allowable IRS write-offs) cannot exceed eligible income of 80% of the current AMI
  • Wage/earning/W-2 income PLUS self-employed (Schedule C) gross income cannot exceed maximum eligible income of 80% of AMI

Income includes, but is not limited to, employment income, overtime income, commissions, bonuses, alimony, child support, second job income, stipends, and self-employment (Schedule C, K, Corporation or Subchapter S) income, etc.  Current income/earnings determine eligibility income.  Eligible income cannot exceed the prescribed percentage of the area median income (AMI) at time of DPA approval.  The qualifying income used on the lender’s 1003 loan application will not be AH’s sole source of verification to determine if the buyer is income eligible.

Interest Rate

There is no interest rate or deferred interest rate charged on the AH DPA subsidy.

Layering Other DPA Sources:

The AH DPA can be used in conjunction (layered) with other DPA sources approved and accepted by AH and the primary lender.  AH reserves the right to modify and/or reject layering of its subsidy.

Lien Position

The AH subsidy assistance will be in a second (2nd) lien position, after the primary lender.  AH will consider a third (3rd) lien position when the City of Atlanta, Invest Atlanta, or the Atlanta Community Land Trust's subsidy assistance sources are also 'layered' as part of the transaction.

Married Persons

For married persons who are not legally divorced or legally separated through sufficient documentation from the courts to confirm same, income verification for both parties must be provided in the credit package from the lender, regardless if only one person is making application and will be signing the AH loan documents.

Non-Occupant Co-Borrowers

Purchases with a non-occupant co-borrower and/or with co-signers, are not eligible.

Own Funds

The minimum contribution from the buyer cannot be less than $1,500 from their own funds.  Gift funds cannot be used in lieu of the borrower’s own funds.  The $1,500 can be in the form of the earnest money deposit, closing costs on the HUD-1, or related POCs, e.g. appraisal, home inspection, etc.

Primary Loan

The primary loan cannot be held by a private individual neither by the seller.


Eligible properties are: single-family detached (SFD), townhomes (THs) and Condominiums (CONDOs).

Property Inspection Report

A property Inspection Report is required on all existing properties; and optional for new construction.

Purchase Price

The maximum purchase price for properties purchased is $335,000.

Purchase Rehab Loans

For purchase/rehabilitation loan transactions, the maximum rehabilitation costs for improvements is limited to $35,000 and can be used for safety and soundness repairs, functional obsolescence, energy efficiency, and handicap accessibility.

Re-Sale Restrictions

The AH Deed-to-Secure Debt (DSD) has no re-sale restrictions.


There is no repayment requirement as long as the homeowner occupies the property as his/her primary residence during the 10-year affordability period.  Repayment/Recapture of the AH subsidy amount is triggered when:

  • the property is no longer the homeowner’s primary residence;
  • the property is sold, regardless of the reason for the sale;
  • the homeowner obtains a ‘cash-out’ refinance, a HECM or HELOC loan; and/or
  • the homeowner obtains a reverse mortgage, regardless of payment structure.

Repayment/Recapture terminates, or is no longer in effect, after the 10th year.

Example of Subsidy Repayment/Recapture, if triggered during the 10-Year Affordability

Anniversary Year        Recapture %

Years 1 thru 5                100%

Year 6                             80%

Year 7                             60%

Year 8                             40%

Year 9                             20%

After year 10                  No Recapture is due

Shared Appreciation

In addition to ‘repayment/recapture’ (as noted above), shared appreciation is applicable at the time of sale of the property, regardless of the reason for sale.  Shared appreciation is triggered by the sale of the property only, and is based on the percentage of AH’s initial DPA investment.  Shared appreciation is no longer applicable after the 10-year affordability period.

Tax Returns

DPA submissions must have complete, filed and signed tax returns or tax transcripts for the most recent three (3) years.

Total Debt-to-Income Ratio

The total debt-to-income ratio for all submissions cannot exceed 55%.


Effective as of 12-2021                        Guidelines are subject to change without advance notice

EHO Logo