diff --git a/examples/dreambooth/train_dreambooth_lora.py b/examples/dreambooth/train_dreambooth_lora.py
index 2d2629b2fd87..3724e3d140d9 100644
--- a/examples/dreambooth/train_dreambooth_lora.py
+++ b/examples/dreambooth/train_dreambooth_lora.py
@@ -35,7 +35,7 @@
 from huggingface_hub.utils import insecure_hashlib
 from packaging import version
 from peft import LoraConfig
-from peft.utils import get_peft_model_state_dict
+from peft.utils import get_peft_model_state_dict, set_peft_model_state_dict
 from PIL import Image
 from PIL.ImageOps import exif_transpose
 from torch.utils.data import Dataset
@@ -54,7 +54,13 @@
 )
 from diffusers.loaders import LoraLoaderMixin
 from diffusers.optimization import get_scheduler
-from diffusers.utils import check_min_version, convert_state_dict_to_diffusers, is_wandb_available
+from diffusers.training_utils import _set_state_dict_into_text_encoder, cast_training_params
+from diffusers.utils import (
+    check_min_version,
+    convert_state_dict_to_diffusers,
+    convert_unet_state_dict_to_peft,
+    is_wandb_available,
+)
 from diffusers.utils.import_utils import is_xformers_available
 from diffusers.utils.torch_utils import is_compiled_module
 
@@ -892,10 +898,33 @@ def load_model_hook(models, input_dir):
                 raise ValueError(f"unexpected save model: {model.__class__}")
 
         lora_state_dict, network_alphas = LoraLoaderMixin.lora_state_dict(input_dir)
-        LoraLoaderMixin.load_lora_into_unet(lora_state_dict, network_alphas=network_alphas, unet=unet_)
-        LoraLoaderMixin.load_lora_into_text_encoder(
-            lora_state_dict, network_alphas=network_alphas, text_encoder=text_encoder_
-        )
+
+        unet_state_dict = {f'{k.replace("unet.", "")}': v for k, v in lora_state_dict.items() if k.startswith("unet.")}
+        unet_state_dict = convert_unet_state_dict_to_peft(unet_state_dict)
+        incompatible_keys = set_peft_model_state_dict(unet_, unet_state_dict, adapter_name="default")
+
+        if incompatible_keys is not None:
+            # check only for unexpected keys
+            unexpected_keys = getattr(incompatible_keys, "unexpected_keys", None)
+            if unexpected_keys:
+                logger.warning(
+                    f"Loading adapter weights from state_dict led to unexpected keys not found in the model: "
+                    f" {unexpected_keys}. "
+                )
+
+        if args.train_text_encoder:
+            _set_state_dict_into_text_encoder(lora_state_dict, prefix="text_encoder.", text_encoder=text_encoder_)
+
+        # Make sure the trainable params are in float32. This is again needed since the base models
+        # are in `weight_dtype`. More details:
+        # https://github.com/huggingface/diffusers/pull/6514#discussion_r1449796804
+        if args.mixed_precision == "fp16":
+            models = [unet_]
+            if args.train_text_encoder:
+                models.append(text_encoder_)
+
+            # only upcast trainable parameters (LoRA) into fp32
+            cast_training_params(models, dtype=torch.float32)
 
     accelerator.register_save_state_pre_hook(save_model_hook)
     accelerator.register_load_state_pre_hook(load_model_hook)
@@ -910,6 +939,15 @@ def load_model_hook(models, input_dir):
             args.learning_rate * args.gradient_accumulation_steps * args.train_batch_size * accelerator.num_processes
         )
 
+    # Make sure the trainable params are in float32.
+    if args.mixed_precision == "fp16":
+        models = [unet]
+        if args.train_text_encoder:
+            models.append(text_encoder)
+
+        # only upcast trainable parameters (LoRA) into fp32
+        cast_training_params(models, dtype=torch.float32)
+
     # Use 8-bit Adam for lower memory usage or to fine-tune the model in 16GB GPUs
     if args.use_8bit_adam:
         try: