GA Dream Program: Requirements, Down Payment Tracks, and Peach Plus

The Georgia Dream program requirements come down to five things: you haven’t owned a primary residence in the last three years, your middle credit score is at least 640, your household income falls under the cap for your county, the home costs $550,000 or less, and you don’t have more than $20,000 (or 20 percent of the sale price) in liquid assets after closing. Meet those, and the Georgia Department of Community Affairs (DCA) pairs you with a 30-year fixed-rate first mortgage and a zero-interest second loan of up to $12,500 for your down payment and closing costs.¹

Who Qualifies

The three-year rule is the gatekeeper. If you’ve owned a primary residence at any point in the past 36 months, you’re out — with one exception. Buyers purchasing in a designated targeted area don’t have to meet the first-time buyer test at all, so previous homeowners can still qualify in those locations.²

Credit and debt matter next. Your middle score has to be 640 or higher. If it lands between 640 and 699, your debt-to-income ratio cannot exceed 45 percent. Scores of 700 and above follow whatever the automated underwriting system approves.³

The house has to be where you actually live. Investment properties and second homes are not eligible. And your cash reserves after closing cannot exceed $20,000 or 20 percent of the purchase price, whichever is greater.¹

Income and Purchase Price Limits

Income caps depend on where you’re buying and how many people are in the household. Every household member’s income counts, not just the people signing the loan.¹

Atlanta–Sandy Springs–Roswell metro (Barrow, Bartow, Cherokee, Clayton, Cobb, DeKalb, Fulton, Gwinnett, and surrounding counties): $130,290 for one to two people, $149,833 for three or more.
Athens metro (Clarke, Madison, Oconee, Oglethorpe, Morgan counties): $113,160 for one to two people, $132,020 for three or more.
All other Georgia counties: $98,400 for one to two people, $113,160 for three or more.

The purchase price ceiling is $550,000 statewide, regardless of county.⁴

Down Payment Assistance Tracks

The assistance is a zero-interest second mortgage with no monthly payment. Which track you fall into determines how much you can receive, and each track caps at both a percentage of the purchase price and a dollar amount. You get the lower of the two.

Standard: open to all eligible buyers. 5 percent of the purchase price or $10,000, whichever is less.
Protectors, Educators, and Nurses (PEN): for public safety workers, teachers, healthcare providers, and active-duty military. 6 percent or $12,500, whichever is less.
CHOICE: for households with a member who lives with a disability. 6 percent or $12,500, whichever is less.

The percentage cap can bite on lower-priced homes. A $150,000 purchase under the Standard track yields $7,500, not the full $10,000. The dollar maximums only apply once the purchase price is high enough for the percentage to reach them. Every dollar has to go toward the down payment or closing costs at the time of purchase.¹

How the Second Loan Gets Repaid

DCA files a second-mortgage lien for the assistance amount. You owe no interest and make no monthly payments while you live in the home. The full balance becomes due when you sell, refinance the first mortgage, or stop using the property as your primary residence.²

Refinancing is the trigger people most often miss. If rates drop and you refinance three years in, the entire assistance balance comes due at that closing. Factor that into any refinance math before you sign.

Compatible Loans and Current Rate

The Georgia Dream first mortgage can sit on top of an FHA, VA, USDA Rural Development, or conventional uninsured loan. Your lender underwrites the primary loan under whichever program fits, and the Georgia Dream assistance layers on top.²

The first mortgage is a 30-year fixed rate. The current DCA rate is 5.875 percent, and it stays the same whether or not you take the down payment assistance. Rates change periodically, so check the DCA rate sheet before locking.⁵

Homebuyer Education

You have to finish an approved homebuyer education course before closing, and your completion certificate must be dated within 12 months of your closing date. DCA accepts three formats:⁶

An in-person workshop through a DCA-certified or HUD-approved housing counseling agency.
One-on-one counseling sessions with a certified housing counselor.
The online E-Home America course, which costs $50. Income-based vouchers can cover the fee; your lender submits a Certification of Income Form to request one.

Without the certificate, DCA will not release the assistance funds.

Documents and Application Process

You don’t apply to DCA directly. A participating lender pre-qualifies you, picks the right primary loan program, determines your assistance track, and submits the full file to DCA for state-level review. After DCA issues a commitment letter, you go to closing.²

You can pick a lender from the DCA participating lender directory or call 800-359-4663 for a referral.¹ The core documents the lender will assemble are:

IRS tax transcripts for the most recent three years. If you itemized in any of those years, include Schedule A. If you weren’t required to file for a given year, the lender will have you complete a DCA affidavit and pull transcripts confirming no filing.
Year-to-date pay stubs from each employer, dated within 45 days of the lender’s underwriting approval.
The most recent statement, covering at least 30 consecutive days, for every bank account.
A DCA household income worksheet listing income from every person who will live in the home.
Your homebuyer education certificate from within the past 12 months.

Federal Recapture Tax If You Sell Early

Georgia Dream mortgages are funded through tax-exempt bonds, so federal law imposes a potential recapture tax if you sell within nine years of closing, turn a profit on the sale, and your income has risen above certain thresholds.⁷

The ceiling is 6.25 percent of the highest principal balance you carried on the loan. On a $300,000 mortgage, that puts the maximum at $18,750. What you actually owe is the lowest of the ceiling adjusted by holding-period and income percentages, or 50 percent of your gain on the sale.⁸

The holding-period percentage climbs from 20 percent in year one to 100 percent in year five, then tapers back to 20 percent by year nine. After nine full years, no recapture applies. You also owe nothing if you sell at a loss, if the home transfers because of your death, or if it goes to a spouse in a divorce.⁷

Report the recapture on IRS Form 8828 with your federal return for the year of sale. File the form even when the calculated amount is zero.⁹

If Your Income Is Too High: Peach Plus

Georgia Dream isn’t the only DCA option. If your income exceeds the Georgia Dream caps, Peach Plus is a separate program for FHA and VA borrowers with higher income limits and a purchase price ceiling of $650,000 in the Atlanta metro. The Standard Peach Plus track covers 3.5 percent of the purchase price or $10,000, whichever is less; PEN and CHOICE cover 4 percent or $12,500. The zero-interest, no-monthly-payment structure works the same way. Ask your lender about it before assuming you don’t qualify for any state help.¹⁰

1
Georgia Department of Community Affairs. Georgia Dream
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Georgia Department of Community Affairs. Georgia Dream Loan Program FAQs
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Georgia Department of Community Affairs. Georgia Dream Loan Program Term Sheet
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Georgia Department of Community Affairs. Georgia Dream Mortgage Products
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Georgia Department of Community Affairs. Current Interest Rates
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Georgia Department of Community Affairs. Approved Housing Counseling Agencies
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Office of the Law Revision Counsel. 26 USC 143 – Mortgage Revenue Bonds
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Georgia Department of Community Affairs. Notice To Purchaser Of Potential Recapture Tax On Sale Of Home
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Internal Revenue Service. Instructions for Form 8828
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Georgia Department of Community Affairs. Peach Plus Loan Program