There are some DPA programs... the APR for these types of loans?
This isn't a simple matter, because you can't generalize--every program must be fully digested in order to determine what must be disclosed.
Section 1026.17(c)(1) tells us that "The disclosures shall reflect the terms of the legal obligation between the parties." Who are the parties? Typically, government-assisted financing involves three, maybe more, parties who are contractually obligated to do certain things.
Are you a bank, or some other type of lender? What is your role in a typical transaction? You mentioned that there is an "agency providing the loans." If an "agency" is providing the funds, isn't the agency the lender? If another entity is the lender, then what's your interest in the transaction? Unless you're the creditor, how can Regulation Z cover you?
Does the program involve "credit"? Section 1026.2(a)(14) defines "credit" as "the right to defer payment of debt or to incur debt and defer its payment." Is there a debt, or does the homebuyer only incur a contingent debt? Unless the contract documents for the program require the homebuyer to commit one of the acts that triggers partial or full payment, then the program may be a gift, not a loan. Gifts are not "credit"--even if there is a possibility that the gift could be cancelled at some future date. Coverage of Regulation Z is based on requirements, not possibilities. Therefore, if the buyer's obligations are to accept funds from a community development agency, live in the residence for ## years, and then own the property free and clear, there is no debt, no "credit", and no coverage by Regulation Z.
If the program's only gift to the homebuyer is waiver of fees and/or reduction of the interest rate to 0.00%, but the homebuyer will be required to repay some or all of the funds that were advanced toward the cost of acquisition, then you have a debt...which is "credit"...which triggers coverage by Regulation Z.
Assuming the program involves "credit" (even if the credit is accompanied by a gift), then you determine what the contract documents require the borrower to repay, how, and when. There could be no specific payment schedule (payable on demand), a single payment on a stated future date, or a series of installment payments. However the payments are scheduled, for APR calculation purposes, they must include all amounts that are classified as Finance Charges. That doesn't mean that payments must contain FCs...only that you can't leave FCs out. Amounts representing the recapture of gifts (because the homebuyer no longer qualifies to receive the gift), should not be included in the payment schedule used for APR calculation because these amounts are neither FCs nor repayments of a portion of the AF.
In order to calculate an APR, you only need one additional item--the Amount Financed. The AF is the "amount of 'credit' provided to [the borrower] or on [the borrower's] behalf." Since gifts are not "credit", you ignore them when calculating the AF--just like you left them out of the payment schedule.
To illustrate, let's say the homebuyer needs $12,000 in assistance in order to close on the purchase money loan (which we'll say is a separate transaction.) Because the buyer pledges to live in the home for ## years, the government agency will give (not lend) $4,000 if a lender will make an interest-free loan for twice that amount ($8,000.) The program allows the lender to charge an origination fee that works out to be $200. The lender requires 80 monthly payments of $100 (interest-free) and the govt. agency requires repayment of the $4,000 if (and only if) the buyer no longer meets the qualifications to receive the gift.
The TIL disclosures for this illustration take no account of the $4,000 gift, resulting in an AF of $7,800 (8,000 - 2,000) and 80 monthly payments of $100. Assuming the first payment due date is exactly one month after consummation, you will get an APR of 0.75%. As Randy observes, interest isn't necessarily the only FC in a loan of this type. Fees that are Prepaid FCs factor into the APR by way of the AF, not the interest-free payment schedule.