How Down Payment Assistance Works for Commercial Property

Down Payment Assistance

Let us start off by first dispelling the rumor that down payment assistance (DPA) is something for nothing. For commercial projects the down payment may come from a third party but it is in reality funded by the seller. This means it is a creative way to allow the seller to cover the down payment and sometimes even the closing costs. This will allow a real estate investor to purchase an income producing property for little or no money at closing. To make any deal work you first need a motivated owner who is willing to cover the required DPA and the costs associated with it. THE DPA is Seller Funded!!! The seller Funds (Pays The Down Payment) the Down Payment from their equity!!!

Unlike a residential first time home buyer programs that the DPA will come from a government entity, bank (for CRA purposes) or a non for profit organization; in commercial transactions the seller always funds the assistance. No entity has a financial or other interest to give money to people to purchase multimillion dollar income producing investment property other than the seller.

Seller Funded DPA

Once you have an owner – seller willing to utilize creative financing the assistance in the sell of their property you now have the first requirement for a successful creative transaction. Without a willing seller there are no creative financing deals. As a commercial real estate investor attempting to purchase property using little or none of their own money, your first job is to find that willing and motivated seller. But not only must the they be willing, they must be able. This translates to equity in the investment property. Lots of equity. If you expect to fund a project without using your funds the property should have at least 30% equity. Sure you can do deals with as little as 20% equity, but the options for financing are greatly reduced and the buyer will pay at least the closing costs which would include substantial fees for the DPA. Most loan programs that work with DPA are hard money or stated lenders. These programs require a larger down payment.

Given a willing seller and an income producing property with substantial equity, you now have the minimum requirements for a seller funded assistance program.

How the DP Program Works

  • Willing Seller
  • Property with Substantial equity
  • Contract is written for value of the property (seller will receive agreed upon net amount)
  • Third Party DPA Company or private investor sends funds to escrow for closing (from buyer).
  • Escrow title company sends DP funds plus fee back to 3rd party company at disbursement of escrow (from seller).


  • PropertyValue: $1,000,000
  • Loan amount: $750,000
  • Seller to net: $700,000
  • Down Payment: $250,000 from 3rd party DPA Company
  • DPA Fee: $30,000
  • Return to DPA Company from escrow: $280,000
  • Balance for additional closing costs: $20,000
  • Net to Seller: $700,000


This is an ideal situation. There are many variations to this deal based on the terms of your specific transaction. You have an opportunity to purchase property from motivated owners willing to utilize creative financing with seller funded assistance for both the closing costs and /or the required down payment. This is how the seller funded program works.


19 thoughts on “How Down Payment Assistance Works for Commercial Property

  1. I have a spec home in observatory park denver co with a large commercial note. I presently have it rented. lease runs out in april…no longer can afford to float this home. want to be rid of it. any suggestions? it is 3 years old.

  2. could use more information about the DPA and I would like a little help if you will. may be you could help and at close I could ask for all the deposits and first months rents and you could get some amount from that. I don’t know just want help

  3. I have a 6 unit with a listing price of $200,000.. I need a DPA, ASAP. I’m a first time invester

  4. I am currently taking a course in buying commercial property. I would like to buy a property using the Down Payment Assistance Program. Can you tell me how to get started? I am still looking for the property that will qualify for this program. Thanks, Judie

  5. Have 3 property portfoli purchase. contract price of 1.66m and sellers get 1.26m down payment of 332k and leaving 68k for fees, insurance and closing costs. Can you help.

  6. I have a seller willing to do owner financing or carry a second on the property. Need DPA assitance to make this deal work. Please contact me so i can discuss more about it with you.

  7. Hi, i have a commercial property in mind it’s free and clear and the seller is super motivated. I am really interested in this seller funded assistance program. Thank you for your time.

  8. Hi: Louisj

    I have the property and the seller willing to help me with the down payment assistance .

    I need help It’s my first property.
    let me know if you want me to call you.


  9. Hello,
    I have bulk deal: 11 SFR with 3 residential in AZ. Asking is 1.5 MM, Seller will carry note with 35% down @ 6% for 2 years.
    Looking for help to make this deal work.

  10. Hi Louis,
    There is a hotel property for sale in a resort area and the owner is EXTREMELY motivated to sell. I have 15 years of experience in running successful hotel and would like to own this property. I have some of my funds but need DPA. Current owner is foriegn investor and its hard to explain how DPA works. Would you be able to help ASAP?

  11. Im trying to purchase a multifamily property I havr financing lined up I need DPA as soon as possible please email contact number if you can help

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