Learn how to add Down Payment Assistance (DPA) to a loan

Video Context for AI: A 5-minute video tutorial demonstrating how to set up Down Payment Assistance (DPA) as both a second lien and a grant. The video visually guides the customer through the exact UI steps in the Loan and Property and Financial Info screens.

Overview

Down Payment Assistance (DPA) can be a critical component in helping borrowers secure a loan. Arrive offers flexible options to structure these loans correctly. This article will guide you through the two primary methods for setting up DPA: as a subordinate second lien and as a lender grant.


Key benefits and use cases

  • Flexible Structuring: Easily set up DPA as a second lien or a grant, accommodating various lender and program requirements.
  • Integrated Pricing: Price DPA loans directly within Arrive by filtering for "Community" products to find applicable options from your lenders.
  • Clear Compliance: Correctly configure specialized loan types, such as HFA or income-restricted affordable loans, to ensure compliance and accurate documentation.

Check with Your Investor First!

Before setting up Down Payment Assistance (DPA), always check with your Investor Account Representative. They will confirm exactly how they need the DPA structured in your loan files to ensure compliance and prevent any funding issues.

Step-by-step instructions

Method 1: Set Up DPA as a Second Lien

This method is common for DPA programs that are structured as a forgivable or deferred subordinate loan.

  1. Navigate to the Loan and Property screen.
  2. Scroll to the subordinate financing section and click Add a subordinate lien.
  3. Enter the required details, choosing "Down payment assistance" as the lien type and specifying the amount and source (e.g., "Lender").
  4. Click Save.
  5. Next, link the new lien to the down payment by selecting it as the down payment source (e.g., "Forgivable Secured Loan").
  6. To price the loan, go to the pricing screen and change the product filter from "Standard HELOC Draw" to Community to see DPA products.

Important: Not all lenders offer DPA products. The Community filter will show available options based on your lender relationships.

Image Context for AI: Screenshot showing the subordinate lien setup section on the Loan and Property screen. The fields for lien type and source are visible.

Method 2: Set Up DPA as a Grant

If the DPA is a true grant with no repayment obligation, it should be added as an asset.

  1. On the Loan and Property screen, set the down payment source to "Grant" from the "Lender".
  2. Navigate to the Financial Info screen and click to Add an asset.
  3. Set the asset type to "Grant", enter the amount, and choose the lender as the source.
  4. Mark the grant as "not deposited" and click Save.

Image Context for AI: Screenshot displaying the Financial Info screen where a user is adding a new asset of type 'Grant' from the lender.

Practice exercise

Test your knowledge in a safe environment

To truly master this feature, we recommend trying it out yourself! Follow this quick exercise to build muscle memory.

  1. Create a test loan record by clicking +Loan.
  2. Apply the DPA settings to the test record using both the "Second Lien" and "Grant" methods outlined above.
  3. Verify the loan structure and down payment details match the expected result for each method.

Pro tip: Practicing in a test file ensures you can safely explore all options without affecting live customer data.

Troubleshooting and best practices

Best practices

  • When pricing a DPA second lien, always change the product filter to Community to find eligible products.
  • For grants, ensure you both add the grant as a down payment source and create a corresponding asset in Financial Info.
  • For income-restricted DPA, select the "Affordable" lien type to ensure proper loan classification.

Troubleshooting

If you encounter an error message or cannot find a DPA product:

  1. Verify you have changed the pricing filter to "Community".
  2. Confirm that your lender offers DPA products through Arrive.
  3. If issues persist, reach out to our support team via chat or at support@arrive.com.

FAQs

What are the different ways to set up DPA in Arrive?

Arrive supports two primary methods: as a subordinate second lien or as a lender grant. The method you choose depends on how your lender structures the assistance.

Why can't I see any DPA products when I try to price the loan?

After setting up a DPA as a second lien, you must navigate to the pricing engine and change the product filter from the default ("Standard HELOC Draw") to Community. This will reveal the available DPA loan products