Louisiana First-Time Home Buying Assistance Programs for 2024

Louisiana First-Time Home Buying Guide

On this page:

    By Walecia Konrad

    (Last Updated – 03/2024)

    The Louisiana housing market isn’t considered hot, given that the average home value is $192,173, which is a decrease of 2.9% year over year, according to Zillow. Compare this to the national figure of $342,941, which has risen just over 3% versus the prior year.

    But just because home prices may be lower than in some other areas of the U.S. doesn’t mean that buying a first home is necessarily easy. That’s why it’s valuable to know that Louisiana offers several first-time homebuyer programs for low- and middle-income residents that can help newcomers break into the real estate market.

    Read on to learn about ways to make buying your first home more affordable when you are house-hunting in Louisiana.

    Who Qualifies as a First-Time Homebuyer?

    The U.S. Department of Housing and Urban Development (HUD) also classifies the following as first-time homebuyers:

    •   A single parent who has only owned a home with a partner while married

    •   A displaced homemaker who has only owned a home with a spouse

    •   Someone who has owned a principal residence not permanently affixed to a permanent foundation

    •   Someone who has only owned a property that wasn’t in compliance with state, local, or model building codes

    Also worth noting: Veterans often qualify for the same programs as first-time buyers.

    💡 Quick Tip: Buying a home shouldn’t be aggravating. Online mortgage loan forms can make applying quick and simple.

    6 Louisiana Programs for First-Time Homebuyers

    The Louisiana Housing Corporation (LHC) allocates federal and state funds to low- and moderate-income homebuyers. It was created in 2011 in a merger of the Louisiana Housing Finance Agency with housing programs from other state agencies, including the Disaster Housing Task Force. The move helped centralize Louisiana’s housing policies and programs.

    Many of LHC’s programs allow the purchase of a variety of properties, including single-family homes, condominiums, townhomes, modular homes, and manufactured homes. Here’s a closer look at LHC’s programs for first-time homebuyers, generally those who haven’t owned a principal home within the past three years.

    1. LHC Mortgage Revenue Bond Home Program

    This mortgage program is designed for buyers with incomes up to 80% of the area median income. Mortgage rates are usually below market, and down payment and closing cost assistance varies, depending on the amount of the loan. Discounted mortgage insurance premiums are also available. There are purchase price limits. Candidates must have a minimum credit score of 640 and complete a homebuyer education course.

    2. LHC Mortgage Revenue Bond Assisted Program

    This LHC MRB program helps first-time homebuyers and repeat buyers who plan to live in designated areas. Buyers in these areas with up to 140% of area median income may qualify. Interest rates on these loans are usually in line with the market. Down payment assistance is available through a second mortgage program.

    Candidates must have a credit score of 640 and complete a homebuyer education course. The purchase price may not exceed limits set by the program.

    3. LHC Market Rate Conventional Program

    These loans are available to first-time homebuyers and repeat buyers who meet income requirements. Rates for 30-year fixed mortgages are competitive, and reduced mortgage insurance is available. The loan can be paired with LHC’s down payment assistance programs.

    First-time buyers will need to complete a homebuyer education course; the 640 credit score minimum exists for all buyers. Unlike other LHC programs, this loan can only be used to purchase a single-family residence, and maximum loan amounts exist.

    4. HC Delta 100 Program

    The Delta 100 is aimed at first-time homebuyers without a credit history in specific Louisiana parishes. Mortgages are 30-year fixed at below market rates, with up to 3% closing cost assistance. The Delta 100 program offers 100% financing, so no down payment is required.

    No credit score is needed. The loans can only be used for single-family homes. Buyers must have sufficient cash reserves and complete a homebuyer education course.

    5. Louisiana’s Resilience Soft Second Program

    The Resilience Soft Second Program offers first-time homebuyers in the 51 parishes impacted by the 2016 floods a second mortgage of 20% of the home’s purchase price, up to $55,000. A maximum of $5,000 in closing costs is also included. Buyers who stay in the home as their primary residence for 10 years qualify for loan forgiveness.

    To qualify, buyers must have income at or below 80% of the area median income and meet other qualifications. In addition, they must be buying a single-family home, condo, or townhome under certain purchase price limits and not in a flood zone. They also must complete a homebuyer education course.

    6. Louisiana Mortgage Credit Certificate Program

    Qualifying first-time homebuyers, veterans, and low- to moderate-income buyers purchasing a home in designated areas can take this Mortgage Credit Certificate Program assistance of a federal tax credit of 40% of their annual mortgage interest payments, up to $2,000 per year. Household income limits depend on the property location and household size. The credit can be taken for as long as the property is the buyer’s primary residence.

    When looking into these programs, it’s also wise to review a general first-time homebuyer guide, so you can prepare for the process ahead.

    How to Apply to Louisiana Programs for First-Time Homebuyers

    Get information and help figuring out if any of the programs listed above are right for you on the Louisiana Home Corporation website. Links are provided above. Purchase price and income limits for the Mortgage Revenue Bond programs and other details are also on the site.

    LHC is not a lender, but the agency provides a list of approved partners for each program that you can use to find and compare lenders in your area.

    For many programs, completion of LHC’s homebuyer education is required. This can help buyers understand how much mortgage they can afford and estimate monthly payments.

    Recommended: Understanding the Different Types of Mortgage Loans

    Federal Programs for First-Time Homebuyers

    Several federal government programs are designed for people who have low credit scores or limited cash for a down payment. Although most of these programs are available to repeat homeowners, like state programs, they can be especially helpful to people who are buying a first home or who haven’t owned a home in years.

    The mortgages are generally for single-family homes, two- to four-unit properties that will be owner occupied, approved condos, townhomes, planned unit developments, and some manufactured homes. Review your options carefully to see if you can lower your mortgage payments with one of these programs.

    Federal Housing Administration (FHA) Loans

    The FHA, which is part of the US Department of Housing and Urban Development (HUD), insures mortgages for borrowers with lower credit scores. Homebuyers choose from a list of approved lenders that participate in the FHA loan program.

    Loans have competitive interest rates and require a down payment of 3.5% of the purchase price for borrowers, who typically need FICO® credit scores of 580 or higher. Those with low credit scores between 500 and 579 must put at least 10% down.

    In addition to examining your credit score, lenders will look at your debt-to-income ratio (DTI, your monthly debt payments compared with your monthly gross income). FHA loans allow a DTI ratio of up to 57% in some cases, vs. a typical 45% or 50% maximum for a conventional loan.

    Gift money for the down payment is allowed from certain donors, which can be helpful. It will likely need to be documented in a gift letter for the mortgage.

    FHA loans always require mortgage insurance: a 1.75% upfront fee and annual premiums for the life of the loan, unless you make a down payment of at least 10%, which allows the removal of mortgage insurance after 11 years.

    You can learn more about these loans, including FHA loans for refinance and rehab of properties, by reading up on FHA requirements, loan limits, and rates.

    Freddie Mac Home Possible Mortgages

    Very low- and low-income borrowers may make a 3% down payment on a Home Possible® mortgage. These loans allow various sources for down payments, including co-borrowers, family gifts, employer assistance, secondary financing, and sweat equity.

    The Home Possible mortgage is for buyers who have a credit score of at least 660.

    Once you pay 20% of your loan, the Home Possible mortgage insurance will be canceled, which will lower your mortgage payments.

    Fannie Mae HomeReady Mortgages

    Fannie Mae HomeReady® Mortgages allow down payments as low as 3% for low-income borrowers. You’ll generally need a credit score of at least 620; pricing may be better for credit scores of 680 and above. Like the Freddie Mac program, HomeReady loans allow flexibility for down payment financing, such as gifts and grants.

    Need information about Fannie Mae lenders in your area? Contact the Fannie Mae Resource Center .

    Fannie Mae Standard 97 LTV Loan

    The conventional 97 LTV loan is for first-time homebuyers of any income level who have a credit score of at least 620 and meet debt-to-income criteria. The 97% loan-to-value mortgage requires 3% down, as the name may suggest. Borrowers can get down payment and closing cost assistance from third-party sources.

    Unlike an FHA loan, the 97 LTV loan has no upfront mortgage insurance fee, and it does have cancellable mortgage insurance. The loan is for just one-unit single-family homes, co-ops, condos, planned unit developments, and eligible manufactured homes.

    Department of Veterans Affairs (VA) Loans

    Active-duty members of the military, veterans, and eligible family members may apply for loans backed by the Department of Veterans Affairs. VA loans, which can be used to buy, build, or improve homes, have lower interest rates than most other mortgages and don’t require a down payment. Most borrowers pay a one-time funding fee that can be rolled into the mortgage.

    Here’s another benefit of VA loans: They do not require private mortgage insurance (PMI) for borrowers who make a down payment of less than 20%. And they have more flexible credit score requirements. In some cases, even those who have previously been in foreclosure or bankruptcy can qualify.

    Borrowers applying for a VA loan will need a Certificate of Eligibility from the VA so make sure to review a guide to qualifying for a VA loan as a first step in the process.

    💡 Quick Tip: Active duty service members who have served for at least 90 consecutive days are eligible for a VA loan. But so are many veterans, surviving spouses, and National Guard and Reserves members. It’s worth exploring with an online VA loan application because the low interest rates and other advantages of this loan can’t be beat.†

    Native American Veteran Direct Loans (NADLs)

    Eligible Native American veterans and their spouses may use these 0% down loans to buy, improve, or build a home on federal trust land. The Department of Veterans Affairs is the lender for NADLs. The funding fee applies. To learn more, contact [email protected].

    US Department of Agriculture (USDA) Loans

    No down payment is required for USDA-backed loans for property in specified rural areas. Borrowers must meet income requirements, and there are fees associated with these loans. Eligible properties are listed by region on the USDA website .

    US Department of Housing and Urban Development (HUD) Good Neighbor Next Door Program

    Police officers, firefighters, emergency medical technicians, and teachers can receive 50% off a home in a “revitalization area.” To qualify, borrowers must live in the home for at least three years. HUD offers more information on homeownership programs in Louisiana on its website.

    Louisiana Homebuyer Stats for 2024

    Here’s a snapshot of the typical home purchase in Louisiana.

    •  Average home value: $192,173

    •  Average down payment: 9.2% of purchase price

    •  Average credit score among homebuyers: 684

    Financing Tips for First-Time Homebuyers

    In addition to federal and state government-sponsored lending programs, there are other financial strategies that may help you become a homeowner. Some examples:

    •  Traditional IRA withdrawals. The IRS allows qualifying first-time homebuyers a one-time, penalty-free withdrawal of up to $10,000 from their IRA if the money is used to buy, build, or rebuild a home. The IRS considers anyone who has not owned a primary residence in the past three years a first-time homebuyer. You will still owe income tax on the IRA withdrawal. If you’re married and your spouse has an IRA, they may also make a penalty-free withdrawal of $10,000 to purchase a home. The downside, of course, is that large withdrawals may take a big bite out of your retirement savings.

    •  Roth IRA withdrawals. Because Roth IRA contributions are made with after-tax money, the IRS allows tax- and penalty-free withdrawals of contributions for any reason as long as you’ve held the account for five years. You may also withdraw up to $10,000 in earnings from your Roth IRA without paying taxes or penalties if you are a qualifying first-time homebuyer and you have had the account for five years. With accounts held for less than five years, homebuyers will have to pay income tax on earnings withdrawn.

    •  401(k) loans. If your employer permits borrowing from the 401(k) plan that it sponsors, you may consider taking a loan against the 401(k) account to help finance your home purchase. With most plans, you can borrow up to 50% of your 401(k) balance, up to $50,000, without incurring any taxes or penalties. You pay interest on the loan, which is paid into your 401(k) account. You usually have to pay back the loan within five years, but if you’re using the money to buy a house, you may have up to 15 years to repay.

    •  State and local down payment assistance programs. Usually offered at the regional or county level, these programs provide flexible second mortgages for first-time buyers looking into how to afford a down payment.

    •  The mortgage credit certificate program. First-time homeowners and those who buy in targeted areas can claim a portion of their mortgage interest as a tax credit, up to $2,000. Any additional interest paid can still be used as an itemized deduction. To qualify for the credit, you must be a first-time homebuyer, live in the home, and meet income and purchase price requirements, which vary by state. If you refinance, the credit disappears, and if you sell the house before nine years, you may have to pay some of the tax credit back.

    Note: There are fees associated with applying for and receiving the mortgage credit certificate that vary by state. Often the savings from the lifetime of the credit can outweigh these fees.

    •  Your employer. Your employer may offer access to lower-cost lenders and real estate agents in your area, as well as home buying education courses.

    •  Your lender. Always ask your lender about any first-time homebuyer grant or down payment assistance programs available from government, nonprofit, and community organizations in your area.

    The Takeaway

    Louisiana supports several first-time home buying programs that can help residents achieve their goal of homeownership. This can be in the form of assistance with a down payment, mortgage, closing costs, and other expenses. In addition to statewide programs, there are initiatives for residents living in specific parishes. Low- and moderate-income Louisianans may find alternatives among the federal government’s first-time homebuyer programs, as well as offers from private lenders.

    Looking for an affordable option for a home mortgage loan? SoFi can help: We offer low down payments (as little as 3% - 5%*) with our competitive and flexible home mortgage loans. Plus, applying is extra convenient: It's online, with access to one-on-one help.

    SoFi Mortgages: simple, smart, and so affordable.

    View your rate


    Should I take first-time homebuyer classes?

    Solid information is key to a successful home-buying experience for anyone, but especially for newcomers. First-time homebuyer classes can help. Indeed they are required for some government-sponsored loan programs.

    Do first-time homebuyers with bad credit qualify for homeownership assistance?

    Often they do. Many government and nonprofit homeowner assistance programs are available to people with low credit scores. And often, interest rates and other loan pricing are competitive with those of loans available to borrowers with higher credit scores.

    Is there a first-time veteran homebuyer assistance program in Louisiana?

    Many of the Louisiana Home Corporation’s first-time buyer programs include veteran benefits. Louisiana veterans also may find options in the federal VA loan programs.

    What credit score do I need for first-time homebuyer assistance in Louisiana?

    Most programs administered by the Louisiana Home Corporation require a credit score of 640 or above. But borrowers with lower scores may be able to access other private, state, and federal loan programs.

    What is the average age of first-time homebuyers in Louisiana?

    There’s little data available to track the average age of first-time homebuyers in Louisiana, but the average age nationally is 35.

    Photo credit: iStock/Rebecca Todd

    *SoFi requires Private Mortgage Insurance (PMI) for conforming home loans with a loan-to-value (LTV) ratio greater than 80%. As little as 3% down payments are for qualifying first-time homebuyers only. 5% minimum applies to other borrowers. Other loan types may require different fees or insurance (e.g., VA funding fee, FHA Mortgage Insurance Premiums, etc.). Loan requirements may vary depending on your down payment amount, and minimum down payment varies by loan type.

    †Veterans, Service members, and members of the National Guard or Reserve may be eligible for a loan guaranteed by the U.S. Department of Veterans Affairs. VA loans are subject to unique terms and conditions established by VA and SoFi. Ask your SoFi loan officer for details about eligibility, documentation, and other requirements. VA loans typically require a one-time funding fee except as may be exempted by VA guidelines. The fee may be financed or paid at closing. The amount of the fee depends on the type of loan, the total amount of the loan, and, depending on loan type, prior use of VA eligibility and down payment amount. The VA funding fee is typically non-refundable. SoFi is not affiliated with any government agency.

    ¹FHA loans are subject to unique terms and conditions established by FHA and SoFi. Ask your SoFi loan officer for details about eligibility, documentation, and other requirements. FHA loans require an Upfront Mortgage Insurance Premium (UFMIP), which may be financed or paid at closing, in addition to monthly Mortgage Insurance Premiums (MIP). Maximum loan amounts vary by county. The minimum FHA mortgage down payment is 3.5% for those who qualify financially for a primary purchase. SoFi is not affiliated with any government agency.

    SoFi Mortgages
    Terms, conditions, and state restrictions apply. Not all products are available in all states. See SoFi.com/eligibility for more information.

    SoFi Loan Products
    SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.

    Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

    Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.

    External Websites: The information and analysis provided through hyperlinks to third-party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.

    Tax Information: This article provides general background information only and is not intended to serve as legal or tax advice or as a substitute for legal counsel. You should consult your own attorney and/or tax advisor if you have a question requiring legal or tax advice. SOHL0224024