Remember when every phone had its own charger?
You had a drawer full of them. A tangle of cords. And the one you needed was never the one in your hand. The phone worked fine. The electricity worked fine. The problem was the plug.
Hold on to that picture. Because it’s the best way I know to explain what’s happening with down payment assistance right now.
The Money Is There. The Plug Isn’t.
This week, Rob Chrane, founder and CEO of Down Payment Resource, made a case in HousingWire that every loan officer and Realtor should read. His argument is simple: down payment assistance doesn’t need simplification. It needs standardization.
Here’s what stopped me in my tracks. Down Payment Resource tracks more than 2,700 assistance programs, with an average benefit of about $18,000. And when the company analyzed $6.5 billion in declined loan volume, it found that 35% of those loans could have been saved with a DPA program that closed the affordability gap.
Read that again. More than a third of the declined loans in that analysis didn’t have to be declines.
Those aren’t just numbers. Those are families who heard “not yet” when the answer could have been “yes.”
Why Nobody’s Using It
So if the money exists, why isn’t it getting used?
Chrane’s answer is the part I appreciated most. He doesn’t point fingers. In fact, he writes, “No one is being lazy here.”
The real problem is that there’s no common data model for DPA. Every program describes its eligibility, income limits, property rules, and benefit structure its own way. So every lender, every loan origination system, every point-of-sale platform, and every pricing engine has to build its own DPA approach from scratch. Most decide it isn’t worth the effort.
That creates a loop:
- Lenders don’t prioritize DPA because their systems don’t support it well.
- Technology vendors don’t build DPA support because lenders say they don’t need it.
- Borrowers who could qualify never hear about it, because their loan officer has no easy way to find it.
Everybody is acting rationally. The system is what’s broken.
The Fix: One Plug, Not One Phone
Here’s where Chrane’s thinking gets smart. The usual industry reaction is, “Let’s just create one universal DPA program.” That’s like solving the charger problem by making everyone buy the same phone. It’s never going to happen. And it shouldn’t. Local programs exist because local markets are different.
Instead, he’s asking MISMO, the Mortgage Industry Standards Maintenance Organization, to build a data standard. One common language that lets thousands of different programs show up consistently inside the systems lenders already use.
We’ve seen this movie before. Before automated underwriting, credit decisions were fragmented and slow. Standardization made automation possible, cut cycle times, and changed the whole industry. Chrane believes DPA data is at that same turning point. I think he’s right.
If it happens, here’s what changes:
- Loan origination systems finally get a spec to build against.
- Point-of-sale platforms can flag DPA eligibility early, right when a buyer first applies.
- Investors can evaluate DPA-assisted loans with more confidence.
- Loan officers spend a lot less time digging through program guidelines by hand.
He also makes a point I love. This doesn’t have to wait for MISMO’s bigger Mortgage Ready initiative. And organizing the industry behind it, in his words, is “on us, not MISMO.”
What This Means for You Today
A data standard could take a while. Your buyers can’t wait for it. So here’s the principle I want you to keep:
A decline is a diagnosis, not a verdict.
Technology will eventually make DPA easier to find. Until then, the gap gets closed by people who know where to look.
For loan officers: Before you turn a file down for cash to close or affordability, give it a second look for DPA. Build your own short list of the programs you can actually close in your footprint, including your state housing finance agency programs. Note the income limits, credit minimums, purchase price caps, and how each one pairs with the first mortgage. Know which ones are forgivable and which ones must be repaid. That cheat sheet is worth its weight in closings.
For Realtors: Don’t let “they don’t have enough saved” end the conversation. Ask your lender one question: “Did you check down payment assistance?” If the answer is a shrug, get a second opinion. Your buyer’s path to the closing table might be sitting in a program nobody looked at.
For buyers: Ask about assistance early. Many programs aren’t limited to first-time buyers, and income limits are often higher than people expect. Some have rules on home price, homebuyer education, or repayment, so learn the terms before you fall in love with a house.
Here in Tennessee, THDA programs are a big part of how I help buyers bridge that gap. And I’ve watched it happen over and over. A family that thought they were years away is turning the key on their own front door a few months later.
The Deal Doctor’s Prescription
Technology should make us more human, not less. A good data standard would do exactly that. It would take hours of manual research off a loan officer’s plate and give that time back to the conversation that actually matters.
But don’t wait for the industry to catch up. This week, go back through your recent “not yet” buyers. The declines. The stalled pre-approvals. The “let’s try again next year” folks. Pick three, and look at them through a DPA lens.
If you want a second set of eyes, send them my way. Complex and declined files are kind of my thing.
Knowledge is power. Sometimes it’s also a down payment.
Questions? Just call Kate at (931) 980-9764 or email Kate@VanDykMortgage.com. Buyers can get started any time right here: create your account.
Frequently Asked Questions
1. What is down payment assistance (DPA)?
DPA is money that helps buyers cover a down payment, closing costs, or both. It can come as a grant, a forgivable loan, a deferred-payment second mortgage, or a repayable second mortgage. Programs are offered by state housing finance agencies, cities, counties, nonprofits, and some employers.
2. How many down payment assistance programs are there?
Thousands. Down Payment Resource tracks more than 2,700 programs nationwide, with an average benefit of about $18,000, according to the HousingWire column by its CEO, Rob Chrane.
3. What did the analysis of declined loans find?
Down Payment Resource reviewed $6.5 billion in declined loan volume and found that 35% of those loans could have been salvaged with DPA programs that closed the affordability gap.
4. What is MISMO?
MISMO, the Mortgage Industry Standards Maintenance Organization, is the mortgage industry’s standards body. It develops the common data formats that let lenders, vendors, and investors exchange loan information consistently. It is a subsidiary of the Mortgage Bankers Association.
5. Why not just create one universal DPA program?
Because local programs reflect local needs, funding sources, and housing markets. Chrane argues the better fix is a shared data standard so thousands of different programs can be represented the same way inside lender systems, without forcing them into one product.
6. How would a DPA data standard help homebuyers?
It would make it easier for lender technology to spot DPA eligibility automatically and early in the process. More buyers would hear about assistance they qualify for, instead of depending on whether their loan officer happens to research it by hand.
7. Is down payment assistance only for first-time buyers?
Not always. Many programs focus on first-time buyers, and some define that as anyone who hasn’t owned a home in the past three years. Others are open to repeat buyers or have special provisions for veterans. Every program sets its own rules.
8. Does down payment assistance have to be paid back?
It depends on the program. Some assistance is a grant, some is forgiven over time if you stay in the home, and some is a second loan that is repaid monthly or when you sell or refinance. Always read the terms before you commit.
9. Can DPA be combined with FHA, VA, or conventional loans?
Many programs pair with FHA, VA, USDA, and conventional financing, but each program lists the first mortgage types it allows. Your lender can confirm which combinations work for your situation.
10. What should a Realtor do if a buyer is told they don’t have enough cash to close?
Ask the lender whether down payment assistance was reviewed. If it wasn’t, ask for it, or get a second opinion from a loan officer who works with DPA regularly. Also look at seller concessions, which can help cover closing costs within program limits.
Source: Rob Chrane, “Down payment assistance doesn’t need simplification; it needs standardization”, HousingWire, Oct. 12, 2026. Statistics on program counts, average benefits, and declined loan volume are from Down Payment Resource as reported in that column. Commentary and opinions in this post are my own.
Kate Deiboldt, Senior Mortgage Advisor, NMLS #18487. VanDyk Mortgage Corporation, Company NMLS #3035. Licensed in TN, KY, AL, FL, GA, TX, and IL. Equal Housing Lender. This is not a commitment to lend. All loans subject to credit approval, underwriting guidelines, and program eligibility. Rates, terms, and programs are subject to change without notice. Down payment assistance programs are subject to funding availability and program guidelines, including income limits, purchase price limits, credit requirements, and homebuyer education requirements. Some assistance must be repaid, and some programs place a second lien on the property. VA loan eligibility requirements apply. http://www.nmlsconsumeraccess.org
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