Ohio First-Time Home-Buying Assistance Programs & Grants
By Kenny Zhu
(Last Updated – 06/2025)
Real estate competition has been brewing in the Buckeye State, just as it has everywhere else.
In June 2025, home prices in Ohio were up 6.0% compared to last year, hitting a $253,300 median price, according to Redfin. Sales prices had the biggest jumps in Chillicothe, Hilliard, and Canton.
Things can look a bit intimidating for first-time Ohio homebuyers. But homeownership may be more accessible than you think.
The Ohio Housing Finance Agency (OHFA) offers a variety of programs to assist low- and moderate-income first-time and repeat homebuyers hoping to achieve homeownership.
Who Is Considered a First-Time Homebuyer in Ohio?
The OHFA considers you a first-time homebuyer if you meet any one of the following:
• You have not owned a primary residence in the last three years
• You are an honorably discharged veteran
• You are purchasing a home in a target area
In addition, like all OHFA-qualified borrowers, you will need to:
• Meet the county-specific income and purchase price limits
• Have a credit score of 640+ for conventional, USDA, and VA loans
• Have a credit score of 650+ for FHA loans
• Meet debt-to-income ratios for loan type
• Buy a qualifying property type (up to four-unit residential properties, modular homes, and manufactured homes)
• Take a free homebuyer education course
Recommended: First-Time Homebuyer Guide
4 Ohio Programs for First-Time Homebuyers
OHFA offers four first-time homebuyer assistance programs that can be used in tandem with 30-year fixed-rate FHA, VA, USDA, or conventional mortgage loans.
The benefits from these programs come in the form of down payment assistance, a discounted rate, and a tax credit. Here are the program basics.
1. Your Choice Down Payment Assistance
The OHFA YourChoice! Down Payment Assistance program allows qualifying first-time homebuyers to borrow, in the form of a forgivable loan, 2.5% or 5% of the value of their home purchase to put toward their down payment or closing costs.
OHFA will forgive the assistance after seven years if the homebuyer doesn’t sell or refinance the home. If you sell or refinance your property before seven years are up, you will be required to repay all assistance provided.
2. Ohio Heroes
OHFA offers a discounted mortgage rate for first-time homebuyers in Ohio who work in industries that serve the public interest. Those who qualify for Ohio Heroes benefits are also eligible for the OHFA’s 2.5% to 5% down payment assistance loan.
Qualifying sectors include: veterans, active-duty military and reserve members, and surviving spouses; police officers and professional and volunteer firefighters; EMTs and paramedics; physicians, nurse practitioners, nurses, and state-tested nursing assistants; teachers, administrators, and counselors (preK-12).
Criteria for Ohio Heroes include credit scores of 640 or higher for conventional, USDA and VA Loans, and 650 or higher for FHA Loans. Income limits vary depending on the number of people in your family and whether or not your home is in a target or non-target area.
Qualified buyers must complete a free homebuyer education course with any counseling agency approved by the U.S. Department of Housing and Urban Development (HUD) in Ohio.
3. Grants for Grads
The Grants for Grads program offers a discounted mortgage rate and 2.5% to 5% in down payment assistance, forgivable after five years, for first-time Ohio homebuyers who have obtained a qualifying degree in the 48 months leading up to their loan origination.
Eligible degrees include an associate, bachelor’s, master’s, and doctorate degree. Down payment assistance is forgiven after five years as long as you remain in the state of Ohio. If you sell your home and move out of Ohio within five years, you must repay some or all of the assistance provided.
You may meet the program’s criteria if you have not owned or had ownership interest in a primary residence in at least three years. You must meet income limits according to the number of people in your family and the prospective home’s location in a target or non-target area. Credit score requirements are 640 or higher for conventional, USDA and VA Loans, and 650 or higher for FHA loans.
Qualified buyers must complete a free homebuyer education course with any counseling agency approved by the U.S. Department of Housing and Urban Development (HUD) in Ohio.
4. Mortgage Tax Credit
OHFA offers a mortgage tax credit of 40% of annual mortgage interest paid, up to $2,000, for anyone who qualifies under OHFA’s first-time homebuyer program.
If you use the tax credit with a different mortgage option from your lender, your tax credit percentage will be 20% for a property located in a target area and 15% for other properties.
Note: As of late May 2025, OHFA was not accepting applications for the Mortgage Tax Credit. The program may become available again in July 2025, so check back for updates.
How to Apply to Ohio Programs for First-Time Homebuyers
To participate in OHFA’s first-time homebuyer programs, you’ll need to go through the following steps to find and apply for a loan. Don’t worry; it’s almost exactly the same process as applying for a conventional home loan. The main caveat is that your mortgage lender must work with OHFA.
Step 1: Find a Participating Lender
Not all banks fall under the umbrella of OHFA-approved lenders, but the organization lists participating mortgage lenders on the website. Find a lender working in the target county where you want to buy.
Make sure you find a lender that works in the target county where you’re trying to buy. Most large local financial institutions typically show up as participants in the program.
Getting preapproved for a mortgage will show you the size of the loan, and the interest rate, you’d likely qualify for.
Step 2: Find an Agent and a Home
A real estate agent can help you find a home in your price range and ensure that the property meets OHFA income and sales price limits.
OHFA may offer additional incentives for buyers of homes located in challenged “targeted areas .”
Step 3: Take the Homebuyer Education Course
OHFA requires all first-time homebuyers participating in its programs to complete a free homebuyer education course (the sole exception being mortgage tax credit basic buyers).
You can complete the course directly through the website , free of charge.
Keep in mind that while it’s recommended that you complete the online education course in advance, the homebuyer education isn’t technically complete until after you’ve submitted a formal loan application through your lender.
Step 4: Get an Offer Accepted and Finalize Your Loan Application
Think of all the different types of homes out there, from condo to townhouse and single-family home, your budget, school districts, and wants and needs.
Once you make an offer and the home seller has accepted it, you can move forward with finalizing your mortgage application. Your lender will work with you to coordinate a target closing date and verify that all underwriting and OHFA requirements are met.
Your loan officer will advise you on how final OHFA benefits will be disbursed in accordance with which first-time homebuyer program you qualified for.
Federal Programs for First-Time Homebuyers
The OHFA’s first-time homebuyer program includes perks, but higher earners and others will not qualify. A number of federal government programs exist for people with low credit scores or limited down payment funds. Although they are sometimes for repeat homeowners, these national programs can be very helpful for people who are buying a first home or who haven’t owned a home in several years.
Several federal government programs are designed for people who have low credit scores or limited cash for a down payment.
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.
Federal Housing Administration (FHA) Loans
The FHA, which is part of the U.S. Department of Housing and Urban Development (HUD), insures mortgages for borrowers with lower credit scores. Homebuyers choose from an approved-lenders list of institutions participating 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 scores as low as 500 must put at least 10% down.
FHA loan limits in 2025 range from $524,225 for single units to $1,008,300 for four-unit properties, with higher limits in high-cost areas.
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 will accept a DTI of up to 57%, vs. a typical 45% maximum for a conventional loan.
Gift money for the down payment is allowed from certain donors and will be documented in a gift letter for the mortgage.
FHA loans without exception require mortgage insurance premiums (MIP): This includes a fee of 1.75% of the base loan amount, usually rolled into the loan, upfront. Borrowers must carry annual premiums for the life of the loan. As of 2025, new homebuyer monthly MIP is 0.15% to 0.75%. With a down payment of at least 10%, the removal of mortgage insurance is possible after 11 years. For a $300,000 mortgage balance, upfront MIP would be around $5,250 and monthly MIP, at a rate of 0.55%, would be around $137..
Freddie Mac Home Possible Mortgages
Low- and very low-income borrowers may make just 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.
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. Applicants 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.
For income limits, a comparison to an FHA loan, and other information, go to this Fannie Mae site.
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. Borrowers can get down payment and closing cost assistance from third-party sources.
Department of Veterans Affairs (VA) Loans
Active members of the military, veterans, reservists, and surviving spouses who are eligible may apply for loans backed by the Department of Veterans Affairs. These loans designed for those who serve our country 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.
Another VA loan advantage is that they do not require 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.
Native American Veteran Direct Loans (NADLs)
Eligible Native American veterans and their spouses may use these no-down-payment loans to buy, improve, or build a home on federal trust land. Unlike VA loans listed above, the Department of Veterans Affairs is the mortgage lender on NADLs. The VA requires no mortgage insurance, but it does charge a funding fee.
US Department of Agriculture (USDA) Loans
No down payment is required on these loans to moderate-income borrowers that are guaranteed by the USDA in specified rural areas. Borrowers pay an upfront guarantee fee and an annual fee that serves as mortgage insurance.
The USDA also directly issues loans to low- and very low-income people. For loan basics and income and property eligibility, head to this USDA website .
HUD Good Neighbor Next Door Program
This program helps police officers, firefighters, EMTs, and teachers qualify for mortgages in the areas they serve. Borrowers can receive 50% off a home in a “revitalization area.” They must live in the home for at least three years.
Visit the HUD program page for more information.
Ohio First-Time Homebuyer Stats for 2025
• Percentage of buyers nationwide who are first-time buyers: 24%
• Median age of first-time U.S. homebuyers: 38
• Median down payment for first-time homebuyer: 9%
• Median home price in Ohio: $253,300, according to Redfin
• Median down payment: $26,000
• Average credit score in Ohio (vs. average U.S. score of 714): 716
Additional 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. In the event of an IRA withdrawal, someone who has not owned a principal residence in the last two years is considered 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 jeopardize 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 pay income tax on earnings withdrawn.
• 401(k) loans. If your employer allows 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. Most plans let you borrow up to 50% of your 401(k) balance, not exceeding $50,000, within a 12-month period without incurring 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. 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
If you’re a first-time homebuyer in Ohio, discounted-rate mortgage programs and down payment assistance are available to help make your home purchase more affordable in today’s tough market.If you don’t qualify for those programs, you might want to further investigate government-backed loans and conventional loans.
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.FAQ
Should I take first-time homebuyer classes?
Yes! A course can be helpful for a prospective homeowner and can provide important information about how the process works and what to expect. First-time homebuyer classes are required for many government-sponsored loan programs. And for everyone else, this experience is a great way to get acquainted with the home-buying process before you dive into your search in earnest.
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 lower credit scores. And often, interest rates and other loan pricing are competitive with those of loans available to borrowers with higher credit scores. That said, almost any lending program has credit qualifications. That’s why it’s important to take all possible steps to improve your credit standing before you go house hunting.
Is there a first-time homebuyer tax credit in Ohio?
Yes. OHFA sponsors the mortgage tax credit plus program, which allows you to file for a dollar-for-dollar federal tax credit of up to 40% of your annual mortgage interest paid, up to $2,000. Note: As of late May 2025, OHFA was not accepting applications for the Mortgage Tax Credit. The program may become available again, so please check back for updates.
The tax credit percentage will dip to 30% and below for the state’s basic mortgage tax credit program.
Is there a first-time veteran homebuyer assistance program in Ohio?
While not specific to veterans, the Ohio Heroes program is offered through OHFA and is tailored toward Ohio residents who serve or have served in sectors that contribute to the public good. This includes veterans, active-duty military members, and reserves as well as surviving spouses.
Ohio Heroes offers a reduced mortgage rate; down payment assistance can be added.
What credit score do I need for first-time homebuyer assistance in Ohio?
OHFA lists a minimum credit score of 640 for conventional, USDA, and VA mortgage loans and 650 for FHA loans.
What is the average age of first-time homebuyers in Ohio?
The average age of a first-time homebuyer has increased to 38, according to data from the National Association of Realtors®.
Photo credit: iStock/Davel5957
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