Utah Housing DPA + FHA Loan: How the Pairing Works
An FHA loan needs 3.5% down. Utah Housing can cover that down payment and most closing costs with a second mortgage, so first-time Utah buyers can get into a home with little cash of their own. Here is how the two fit together.
Why FHA is the common pairing in Utah
Most first-time buyers who use Utah Housing pair it with an FHA loan, and the reason is simple. FHA allows a 3.5% down payment and is more forgiving on credit than conventional financing. Utah Housing’s FirstHome program is built to sit on top of an FHA first mortgage, so the DPA second steps in to cover that 3.5% down payment and a good chunk of closing costs. Put together, a buyer with a 660 score and steady income can often get into a Salt Lake or Utah County home without draining savings.
How the FHA loan and the DPA second stack
Think of it as two loans working together. The FHA first mortgage is your primary loan. The Utah Housing second is a separate lien that funds your down payment and closing costs at the table. Choose the Traditional structure and that second is an amortizing loan at one point above your first-mortgage rate, so you make a small monthly payment on it. Choose Deferred and there is no monthly payment on the second at all until you sell, refinance, or pay off the home. Either way, the FHA loan itself behaves like any other FHA loan, with its usual mortgage insurance.
Traditional or Deferred with an FHA loan?
For FHA buyers who are tight on monthly budget, the Deferred second is often the better fit because it adds no monthly payment. For buyers who can handle a slightly higher payment and want less owed later, Traditional can make sense. There is no single right answer. It depends on your budget and how long you plan to stay. I walk buyers through both on the Traditional vs. Deferred page, and you can check your county caps on the eligibility page.
Program facts verified August 2026 against Utah Housing forms (utahhousingcorp.org) and HUD FHA guidance. This is not a commitment to lend. Related: DPA + VA loan · Salt Lake County DPA.
Common questions
Can Utah Housing DPA cover an FHA down payment?
Yes. FHA requires a 3.5% minimum down payment, and Utah Housing's DPA second mortgage can cover that down payment plus most closing costs. The FirstHome program is designed to pair with an FHA first mortgage.
What credit score do I need for an FHA loan with Utah Housing DPA?
First-time buyers need a 660 credit score for the FirstHome program. Buyers who have owned before use the FHA/VA program, which allows a 620 minimum. Both can pair the FHA loan with the DPA second.
Do I make a payment on the DPA second with an FHA loan?
It depends on the structure you choose. Traditional DPA is an amortizing second at one point above your first-mortgage rate, so you make a small monthly payment. Deferred DPA has no monthly payment until you sell, refinance, or pay off the home.
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