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American Dream Downpayment Initiative


The American Dream Downpayment Initiative (ADDI) was signed into law on December 16, 2003. The American Dream Downpayment Assistance Act authorized up to $200 million annually. Funds were appropriated for fiscal years 2004-2008. ADDI provided funds to all fifty states and to local participating jurisdictions that had a population of at least 150,000 or qualified for an allocation of at least $50,000 under the ADDI formula. ADDI is administered as a part of the HOME Investment Partnerships Program, a formula grant program.


ADDI helped first-time homebuyers with the biggest hurdle to homeownership: downpayment and closing costs. The program was created to assist low-income first-time homebuyers in purchasing single-family homes by providing funds for downpayment, closing costs, and rehabilitation carried out in conjunction with the assisted home purchase.

Type of Assistance

ADDI provides downpayment, closing costs, and rehabilitation assistance to eligible individuals. The amount of ADDI assistance provided may not exceed $10,000 or six percent of the purchase price of the home, whichever is greater. The rehabilitation must be completed within one year of the home purchase. Rehabilitation may include, but is not limited to, the reduction of lead paint hazards and the remediation of other home health hazards.

Eligible Customers

To be eligible for ADDI assistance, individuals must be first-time homebuyers interested in purchasing single family housing. A first-time homebuyer is defined as an individual and his or her spouse who have not owned a home during the three-year period prior to the purchase of a home with ADDI assistance. ADDI funds may be used to purchase one- to four- family housing, condominium unit, cooperative unit, or manufactured housing. Additionally, individuals who qualify for ADDI assistance must have incomes not exceeding 80% of area median income.

Eligible Activities

ADDI funds may be used for downpayment, closing costs and, if necessary, rehabilitation in conjunction with a home purchase. ADDI funds used for rehabilitation may not exceed twenty percent of the participating jurisdiction's total ADDI allocation. The rehabilitation assisted with ADDI funds must be completed within one year of the home purchase.

Funding Status

Congress appropriated ADDI funding for fiscal years 2003-2008.

  • FY2008 - $10,000,000
  • FY2007 - $24,750,000
  • FY2006 - $24,750,000
  • FY2005 - $49,600,000
  • FY2004 - $86,933,113
  • FY2003 - $74,457,526

Obtaining Assistance

To determine if ADDI or other homeownership assistance is available in your area, contact your local HOME administering agency. For further information regarding the administration of ADDI, visit our Q&A page (PDF | Word).