First Time Homebuyer Loan Assistance Programs
Purchasing your first home is one of life’s greatest milestones! In Ohio, there are several programs available to assist first time homebuyers with their purchase. The Ohio Housing Finance Agency (OHFA) offers help for low and moderate-income borrowers on a variety of mortgage products, including 30-year, fixed-rate conventional loans, Federal Housing Administration (FHA) insured loans, Veterans Affairs loans, and U.S. Department of Agriculture Rural Development mortgages.
These are just a few of the programs the OHFA offers to assist first time homebuyers. Those who qualify can enjoy benefits such as reduced mortgage rates, down payment assistance, tax credits, and special financing that covers the cost of purchasing and renovating a home.
Down Payment Assistance
Eligible buyers may apply for down payment assistance totaling 2.5% or 5% of the home’s purchase price. This money can be put toward a down payment, closing costs or other qualifying “pre-closing” expenses.
Do You Qualify?
To qualify for OHFA assistance, first time homebuyers must meet one or more of the following requirements:
- You have not had an ownership interest in your primary residence in the last three years.
- You are an honorably discharged veteran.
- You are purchasing a home in a target area.
- Income limits, debt-to-income requirements, minimum credit qualifications, and other stipulations will also apply depending on the loan applied for. These requirements include:
- Conventional, USDA and VA loans require a credit score of 640 or higher. FHA loans require a score of 650 or higher.
- Applicants must purchase a qualifying property that is limited to two acres within a municipal corporation and five acres outside a municipal corporation. Additional acreage may be required by local health or safety code. Qualifying properties include:
- Existing homes: single-family dwellings, conforming condominiums, duplexes, and up to four-unit properties.
- Newly built spec/nearly completed homes: one-unit single-family dwellings.
- Modular homes: one-unit single family dwellings.
- Manufactured homes.
Additional programs exist offering further help to first time homebuyers.
Mortgage Tax Credit
First time home buyers who have received an OHFA mortgage and a down payment assistance may qualify for a mortgage credit certificate if they meet certain income and purchase price guidelines. The certificate offers a tax credit of up to 40% of the borrower’s annual mortgage interest paid and can be used annually for as many as 30 years.
Ohio Heroes Mortgage Assistance Program
The OHFA’s Ohio Heroes Programs offers discounted mortgage rates to eligible first time and repeat buyers who are members of helping professions, including veterans and active-duty military (surviving spouses included), police, first responders, certain medical professionals and more. Take the quiz to see if you qualify for this program.
If you are interested in learning more about what OHFA programs have to offer, the experts at the Columbus Mortgage Company are here to help!