Lenders can use DPA to reduce a homebuyer’s loan-to-value (LTV) ratio by an average of 6%, significantly improving loan qualification rates for first-time mortgage-ready buyers. Beyond the down payment, many DPA programs also help cover closing costs, prepaid items, interest rate buydowns, mortgage insurance premiums, and even the buyer’s agent commission. In some cases, buyers can stack multiple programs for greater financial benefit.
This support is increasingly vital as affordability challenges rise. In Q2 2025, the median U.S. home price climbed to $369,000 — up from $350,275 in Q1 — while the average 30-year fixed mortgage rate was 6.82%.
DPA turns manufactured into mortgage-ready
Our latest Homeownership Program Index (HPI) report, published in July, shows a 4% jump in DPA programs supporting the purchase of manufactured homes, climbing from 971 programs in Q1 2025 to 1,006 in the second quarter of 2025.
That’s tracking with growing demand: According to the Manufactured Housing Institute (MHI), more than 100,000 new manufactured homes were shipped across the United States in 2024. This figure represents a significant increase compared to previous years and signals a growing demand for this type of housing. Why the excitement? Simple economics. While site-built homes cost around $166 per square foot, manufactured homes clock in at a budget-friendly $87 per square foot, says MHI.
Because manufactured homes are built indoors in modern, carefully controlled factories, every step of construction is consistent, from the materials used to how the house is assembled. That kind of controlled environment often leads to better, more reliable quality than homes built outside on a job site, where weather and other factors can affect the outcome.
These homes don’t look or perform like your grandpa’s mobile home. Manufactured homes today are built to rigorous federal standards established by the U.S. Department of Housing and Urban Development (HUD), which have evolved significantly since the 1976 HUD Code was introduced.
These standards regulate everything from structural design and durability to fire safety, plumbing, heating and energy efficiency. As a result, modern manufactured homes are safer, more resilient, and more comfortable than their predecessors.
Although some old stereotypes still linger, manufactured housing has become a smart, stylish, and financially sound choice for many first-time homebuyers. More communities and policymakers are starting to recognize its value, especially as housing prices continue to rise. We are heartened to see the number of DPA programs allowing for manufactured homes consistently rising, opening the doors to affordable homeownership for many buyers.
Live-in, rent-out, pay down
With median home prices up and interest rates unyielding, many buyers opt for multi-family purchases — including duplexes, triplexes, and fourplexes. Our Q2 HPI report shows 861 DPA programs supporting multifamily purchases, with growing support for three-unit (573 programs) and four-unit (546 programs) properties — a 3% quarterly gain.
These homes are more than residences, they’re income-generating assets. Buyers can live in one unit by purchasing a duplex, triplex, or fourplex while renting out the others, generating monthly income that can offset or even fully cover their mortgage payments. This “house hacking” model particularly appeals to first-time buyers and younger generations facing high home prices and steep borrowing costs. With the right tenants and rental rates, owners can create cash flow that reduces their housing expenses and builds equity and long-term financial security.
In many cases, the rental income from additional units can help borrowers qualify for a larger loan. When underwriting the mortgage, lenders may count a percentage of projected rental income, typically 75%, toward the borrower’s income, making multifamily properties more accessible than buyers might assume. As housing demand continues to outpace supply in many markets, particularly for affordable rentals, owning a multifamily property positions buyers to benefit from steady tenant interest and rising rents.
It’s also important to note that DPA-backed buyers won’t be going blindly forward into homeownership and being a landlord. Most programs mandate standard homebuyer education classes and specific landlord training. This ensures that first-time buyers, especially younger investors, are equipped with the knowledge they’ll need to manage the property as both the owner and an investor.
Fresh builds, zero sticker shock
DPA programs increasingly support new construction, offering more homebuyers a pathway to purchasing brand-new homes. With more than 2,044 programs now available for new construction, a statistic we are just beginning to track, buyers have unprecedented opportunities to access recently built properties that might have previously been out of their financial reach.
For national home builders like Lennar and D.R. Horton, these DPA programs represent a strategic advantage in a challenging real estate market. By making new construction more accessible, builders can potentially generate more foot traffic to their developments and sell homes more quickly. The programs help reduce financial barriers for buyers interested in a newly built home but lack sufficient upfront capital.
Many new construction DPA programs come with additional educational requirements, ensuring buyers are prepared for homeownership, such as specific training or resources to help buyers understand the nuances of purchasing a newly constructed home. This comprehensive approach helps mitigate risks for both the buyer and the builder.
Expanding new construction DPA programs is part of a broader strategy to increase housing supply and accessibility. By supporting buyers in purchasing newly built homes, these programs help address inventory challenges and provide more options for first-time homeowners. They’re particularly valuable in markets with limited inventories and high home prices like San Francisco, Los Angeles, Seattle, Honolulu or Miami.
Turning new buyers into new business
Allowing DPA to purchase manufactured homes, multi-family properties, and new construction isn’t just an incremental change — it’s a strategic revolution in mortgage lending. For forward-thinking lenders, these expanded DPA programs represent a critical opportunity to capture emerging market segments and drive loan origination in a challenging environment.
Manufactured homes are no longer a stigmatized market. Multi-family investments are now accessible. New construction has suddenly become a viable option for a broader range of borrowers. These aren’t just housing options — they’re untapped revenue streams for lenders willing to adapt their approach.
Millennials and Gen Z represent a massive, underserved market segment systematically priced out of traditional homeownership. By leveraging these expanded DPA programs, lenders can position themselves as innovative partners who understand the evolving needs of younger borrowers. DPA is emerging as a powerful tool in 2025 that unlocks previously inaccessible markets and creates competitive advantages for agile lenders. To those who claim affordable homeownership is dead: Watch. Us. Innovate.
Rob Chrane is the founder and CEO of Down Payment Resource and is a leader in the homeownership affordability space.
This column does not necessarily reflect the opinion of HousingWire’s editorial department and its owners.
To contact the editor responsible for this piece: [email protected].
