Down-payment assistance (DPA) is certainly harder to find these days than it was during the boom, but it’s not extinct. DPA programs earned a bad name during the housing bust as foreclosures and large numbers of distressed properties were linked to shady seller-funded DPA practices.

But Atlanta-based Workforce Resource is confident that things are different now in the world of DPA—since FHA will no longer insure any mortgage linked to seller-funded DPA—and the company is working to get the word out on where to find it with a new software program, titled Down Payment Resource. The software pairs potential buyers with down-payment assistance programs available to them, based on the buyer’s circumstances and the individual home.

One difference in down-payment assistance these days, says Tracey Shell, a Workforce Resource spokesperson, is that the programs now available are usually specialized to target certain demographics—teachers, emergency responders—or neighborhoods that a city or town is trying to revitalize, although there are also some broader programs.

And unlike the seller-funded down-payment assistance programs that helped people to buy homes they couldn’t afford during the boom, Shell says that most of the programs today are government run, or funded by grants or donations.

According to HUD data on FHA-insured mortgages, home loans procured with government-sponsored DPA have a higher rate of default (5.7%) than loans obtained with down-payment money that came from the borrower (4.13%) or a family member (5.26%). But the average default rate of those three categories is just half of the 9.9% default rate among loans purchased with seller-funded DPA.

Because the specialization included in these new programs can make it difficult to find what is available and match it to a given buyer’s situation, Down Payment Resource simplifies the process by working through multiple listing services (MLS). When a home is listed with a participating MLS, Down Payment Resource does the research on what down-payment assistance programs each home would qualify for and aggregates the results, which then show up under an icon that appears with the listing.

Because many programs also depend upon a buyer’s circumstances, the software also has a short survey of eight questions for them to fill out to help pinpoint which programs they could apply for.

"Builders can get some of these [possible DPA program] results and then send a link out to their client and say, ‘Hey, answer some of these questions and let’s see if you qualify,’" Shell says.

The good news is, because MLS companies pay for the service, there is not an additional cost to the builder.

The bad news is that the service is not yet available everywhere, although the company is working toward that. Currently it is working with multiple listing services in Central Florida, Minneapolis, western Wisconsin, and suburban New York, and has contracts to expand to northern Illinois, southern Wisconsin, Reno, Nev., Tucson, Ariz., and northern New England.

For builders not in those areas, or for those whose homes don’t appear in MLS databases, the company is trying to create a channel that would be available to the home building industry specifically, but it has not yet materialized. "It’s a little harder to do, because with MLS, the cost is spread over thousands of Realtor members," says Rob Chrane, president of Down Payment Resource. "If you’re a home builder, that’s not as feasible, but we’re trying to solve that problem."

Until that happens, there are alternative ways to find down-payment assistance for buyers, Chrane says. "My advice would be to find out who the mortgage lenders are that offer these programs, because in most areas the administrators of these programs have a list of lenders willing to do the program. … There’s a relatively small percentage of loan officers that take the time to be specialists in this area, but they are out there and they are in every area."

Chrane also recommends checking out your state’s housing finance agency’s website. "Most at the state level have pretty good websites, and you can find out from there who the lenders are who participate."

Claire Easley is a senior editor at Builder.

Learn more about markets featured in this article: Minneapolis-St. Paul, MN, Reno, NV, Tucson, AZ, Greenville, SC.