Utah Housing DPA: Traditional vs. Deferred Second Mortgage
Utah Housing offers two ways to take your down payment assistance: a Traditional second with a small monthly payment, or a Deferred second with no monthly payment. Picking the right one comes down to your budget and how long you will stay.
The core trade-off
Both structures do the same job, they get your down payment and closing costs covered so you can buy. The difference is what happens after closing. Traditional gives you more money up front (up to 6% versus 3.5%) but adds a small monthly payment, because it is an amortizing second at one point above your first-mortgage rate. Deferred gives you less (up to 3.5%) but asks for nothing monthly, the balance and its 3.5% deferred interest come due only when you sell, refinance, or pay off the home. More help now, or a lighter monthly payment, that is the choice.
Traditional vs. Deferred at a glance
| Feature | Traditional DPA | Deferred DPA |
|---|---|---|
| Maximum assistance | Up to 6% of first-mortgage amount (max $27,500) | Up to 3.5% of first-mortgage amount (max $27,500) |
| Interest | 1% above your first-mortgage rate | 3.5% deferred interest |
| Monthly payment | Yes, small amortizing payment | No monthly payment |
| When it is due | Paid down monthly over 30 years | On sale, refinance, or payoff |
| Best for | Buyers who want maximum help and can handle the payment | Buyers who need the lowest monthly cost |
Covers down payment and closing costs. Requires a Utah Housing first mortgage. May be subject to recapture tax (UHC Form 048).
Who picks which
In practice, buyers who are stretching to afford the monthly payment lean Deferred, because a zero-payment second keeps their debt-to-income ratio lower and the monthly budget manageable. Buyers who need every dollar of help at closing, and can carry the extra payment, lean Traditional for the full 6%. If you plan to sell or refinance in a few years, Deferred can be attractive because you settle the second then. If you plan to stay put for the long haul, the math is closer. I run both scenarios with real numbers so you see the actual difference before you commit.
Program structure verified August 2026 against Utah Housing Form 305 (DPA Second) and Form 300 (Comparison Matrix), utahhousingcorp.org. This is not a commitment to lend. Related: Utah Housing (UHC) program · DPA + FHA · County limits.
Common questions
What is the difference between Traditional and Deferred Utah Housing DPA?
Traditional DPA gives up to 6% of the first-mortgage amount (max $27,500) as an amortizing second at 1% above your first rate, with a small monthly payment. Deferred DPA gives up to 3.5% (max $27,500) with 3.5% deferred interest and no monthly payment until you sell, refinance, or pay off the home.
Which Utah Housing DPA option gives more money?
Traditional gives more, up to 6% of the first-mortgage amount versus 3.5% for Deferred. Both cap at $27,500. The trade-off is that Traditional adds a monthly payment, while Deferred has no monthly payment.
Do I have to repay Utah Housing down payment assistance?
Yes, both structures are second mortgages that are repaid. Traditional is paid down monthly over 30 years. Deferred is repaid in full, with its deferred interest, when you sell, refinance, or pay off the home. Assistance may also be subject to a recapture tax under UHC Form 048.
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