By Susan Guillory

(Last Updated – 06/2025)

Are you a first-time homebuyer in Connecticut? You’re looking at a tough market in the Constitution State. In April 2025, home prices in Connecticut were up 7.6% year-over-year. The median price of a Nutmeg State home is $451,100, according to Redfin. This home-buying guide was crafted to help first-time homebuyers. But hey, that raises a question…

7 Connecticut Programs for First-Time Homebuyers

The Connecticut Housing Finance Authority leads the way in offering mortgages and down payment assistance to low- and moderate-income buyers.

Here are the programs.

1. Homebuyer Mortgage Program

Connecticut Housing Finance Authority mortgages with below-market interest rates can be paired with down payment assistance for those who qualify. Borrowers must be first-time homebuyers or purchasing in a targeted area. There are home price and income limits .

Borrowers must attend a free homebuyer education course, which will explain the home-buying process and mortgage basics.

2. HFA Advantage and HFA Preferred Loan Programs

This program for first-time buyers and people purchasing in a targeted area provides mortgage loans with lower monthly mortgage insurance costs. And mortgage insurance premiums end when the borrower reaches 20% equity.

You must meet sale price and income limits (see this chart).

3. Military, Teacher, and Police Homeownership Programs

Connecticut Housing offers benefits to active-duty military members, veterans, and surviving spouses who meet purchase price and income limits. The agency has a similar program for teachers and police officers .

Another mortgage and down payment program is for applicants who are disabled or who have a disabled member of the household.

4. Down Payment Assistance Program Loan

This very low-rate second mortgage program provides a loan of up to $15,000 at an attractive rate to help with a down payment or closing costs.

Borrowers must apply and qualify for a Connecticut Housing mortgage with a participating lender and demonstrate the ability to repay that mortgage and the second loan to qualify.

5. Time to Own: Forgivable Down Payment Assistance

This program provides 0.00% interest loans with no monthly payment required. Each year, 10% of the balance will be forgiven until the loan is fully forgiven in 10 years. The loan amounts are as follows:

•   Homes in high- or very high-opportunity areas : up to $50,000

•   Homes in other areas: up to $25,000

Borrowers must qualify and receive a Connecticut Housing mortgage, and must have been a resident of Connecticut for at least the preceding three years.

The Time to Own loan may be used with other down payment assistance programs.

6. Another Down Payment Assistance Program

The Housing Development Fund (HDF) offers down payment assistance to qualified first-time homebuyers (the applicant and any non-borrowing spouse must be first-time buyers). With the CT Forever program, first-time homebuyers can borrow up to $28,000 in down payment assistance at 1.00%. (If they sell within 10 years of purchase, the price must be affordable to homebuyers.) The Live Where You Work program offers first-time homebuyers up to $25,000 in down payment and closing cost assistance at 0.00% interest if they are buying a home in the town where they work. The SmartMove Homeownership second mortgage charges 3.00% on a loan for up to 25% of the home’s purchase price to help with down payment and qualified closing costs.

To be eligible, you must have not had a bankruptcy in the past four years or a foreclosure in the past seven years. You must have funds available to cover at least 1% of the purchase price, pre-closing costs, and emergency reserves, and be able to demonstrate a steady work history and on-time bill payment.

7. City Programs in Connecticut

Some cities also offer homeownership help. You might want to look into your city of choice and consult the list compiled by the CHFA.

How to Apply to Connecticut Programs for First-Time Homebuyers

To apply for a mortgage offered by the Connecticut Housing Finance Authority, contact one or more participating lenders .

To apply for Housing Development Fund down payment assistance, create an account and upload documents.

Do you know how much you can afford to pay for a house? This home affordability calculator could help.

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 several 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.

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 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 scores as low as 500 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% 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 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. 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. 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. 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

Eligible active-duty members of the military, veterans, reservists, and surviving spouses 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.

Another benefit of VA loans is that 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.

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 site .

HUD Good Neighbor Next Door Program

This program helps police officers, firefighters, emergency medical technicians, and teachers qualify for mortgages in the areas they serve. Borrowers can receive 50% off a home in what HUD calls a “revitalization area.” They must live in the home for at least three years. For more information, visit the HUD program page.

First-Time Homebuyer Stats for 2024

•   Median home sale price in Connecticut: $451,500

•   3% down payment: $13,545

•   20% down payment: $90,300

•   Percentage of buyers nationwide who are first-time buyers: 24%

•   Median age of first-time homebuyers: 38

•   Average credit score (vs. average U.S. score of 715): 726

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 two 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 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. With most plans, you can borrow up to 50% of your 401(k) balance, up to $50,000, in a year 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 longer 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.

Finally, this home affordability calculator can show you how much you can afford to spend on a home.

The Takeaway

First-time homebuyers in Connecticut may be able to take advantage of attractive home loan and down payment assistance options. Those who don’t fit within the parameters may be able to find good mortgage opportunities on their own.

By Kenny Zhu

(Last Updated – 06/2025)

If you’re thinking of buying a home in Delaware, you will likely be interested in knowing that for qualified buyers, there can be help with your down payment, mortgage, and closing costs.

Owning a home in Delaware can be somewhat more expensive than the national average. The current home value is, on average, $402,409 (up 2.0% year over year) versus the national average of $367,741.

If you are of lower or middle income, however, the Delaware State Housing Authority offers a number of homebuyer assistance programs that can help you make ends meet. The help comes in the form of home loans, down payment assistance, and tax credits. There are also other programs at the federal level that may help you purchase a property. Read on for the details.

2 Delaware Programs for First-Time Homebuyers

The Delaware State Housing Authority (DSHA) offers homebuyer assistance programs to encourage homeownership across the First State.

The programs are for both first-time homebuyers — generally people who have not owned a principal residence in the past three years — and repeat homebuyers.

Some have qualifying income or location requirements. You’ll also need to ensure that you’re obtaining your mortgage through a participating DSHA-approved lender in order to be eligible for any of the benefits.

1. DSHA Homeownership Loans

DSHA offers 30-year fixed-rate mortgages through conventional, FHA, VA, and USDA loan programs for first-time and repeat homebuyers alike. The mortgages may be underwritten at rates that are either at or below market, helping homebuyers afford a house.

The “Welcome Home” program includes:

•   Smart Start First Mortgage: Unassisted first mortgage.

•   First State Home Loan: 3% of the final loan amount for down payment and closing costs.

•   Diamond in the Rough: 5% of the final loan amount for down payment and closing costs. Available only to homebuyers who qualify for the FHA 203(k) Limited Program.

Under its “Home Again” program, the DSHA also offers Smart Start and First State Home Loans to homebuyers (first-time and repeat) who exceed the income limits for “Welcome Home.”

Learn more about these programs on the DSHA site .

2. Delaware First-Time Homebuyer Tax Credit

The state of Delaware allows eligible first-time homebuyers to claim up to 35% of their annual mortgage interest paid in the form of a federal tax credit of up to $2,000 a year.

Like some of the programs above, the mortgage credit certificate typically requires you to qualify as a first-time homebuyer.

You can learn more on the DSHA website .

💡 Quick Tip: Don’t overpay for your mortgage. Get your dream home or investment property and a competitive rate with SoFi Mortgage Loans.

Who Is Considered a First-Time Homebuyer in Delaware?

The Department of Housing and Urban Development (HUD) defines a first-time homebuyer as someone who hasn’t owned a principal residence within the past three years (including a spouse), a single parent (who may have owned a house with a former spouse), and a displaced homemaker who has only owned a house with a spouse.

Remember that those who aren’t first-time homebuyers may still qualify for homebuyer loans and down payment assistance through the DSHA. Make sure to check the specific requirements of your program to confirm.

Recommended: Guide for First-Time Homebuyers

How to Apply to Delaware Programs for First-Time Homebuyers

To qualify for one of DSHA’s Homeownership Loans, you’ll need to apply through a participating lender and meet all of the income, credit, and target location requirements.

Step 1: Verify That You Meet Income and Credit Requirements

To qualify for DSHA homebuyer benefits, you’ll need to have a credit score of 620 or higher and an annual household income at or below the limits set by the DHSA.

Qualifying first-time homebuyers often also need to complete a housing counseling course.

Step 2: Apply for a Mortgage Through a Participating Lender

To obtain DSHA homebuyer benefits, you will need to apply for a mortgage directly through a lender that participates in the program. This applies regardless of whether you’re trying to obtain a conventional, VA, USDA, or FHA home loan.

Participating DSHA lenders can be found on the DSHA website, as noted above.

Keep in mind that even though you may qualify under the housing authority’s minimum requirements, a lender may issue its own set of underwriting requirements.

Step 3: Find a Home and Finalize Your Mortgage Application

Once you submit an offer that’s accepted by the seller, you’ll need to contact your lender directly and provide the details of the property you wish to purchase so the lender can complete the underwriting process.

It’s essential that you remain responsive during this stage of the process to ensure that everything goes according to plan. Your loan officer will coordinate with you and your real estate agent to confirm an appropriate closing date, ensure that all necessary reviews are completed, and validate your DSHA benefits.

It can typically take from 30 to 45 days from the time your offer is accepted to closing day. The timeline may vary, though, based on the complexity of your deal.

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 several 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.

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. Here’s more about how the program works:

•   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, in the range of 500 to 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% to 50% 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 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. 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.

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

Department of Veterans Affairs (VA) Loans

Eligible active-duty members of the military, veterans, reservists, and surviving spouses 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.

•   VA loans do not require private mortgage insurance (PMI) for borrowers who make a down payment of less than 20%.

•   VA loans can 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 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. While the VA doesn’t require mortgage insurance, it does charge a funding fee. For more details, contact [email protected].

US Department of Agriculture (USDA) Loans

No down payment is required on these loans that are guaranteed by the Department of Agriculture in specified areas. Borrowers must meet USDA income requirements, and will 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 borrowers. For loan basics and income and property eligibility, head to this USDA site .

HUD Good Neighbor Next Door Program

If you are a police officer, firefighter, emergency medical technician, or teachers, you may qualify for these mortgages in the areas you serve. Borrowers can receive 50% off a home in what HUD calls a “revitalization area.” They must live in the home for at least three years.

Delaware First-Time Homebuyer Stats for 2025

Here are some stats about home buying in Delaware:

•   Median home sales price in Delaware: $359,900

•   3% down payment: $10,797

•   20% down payment: $71,980

•   Average credit score in Delaware: 714

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. The IRS considers anyone who has not owned a primary residence in the past two 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 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 can 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 if 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 you to borrow from a 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, in 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 longer 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, but you may want to do the math to be sure.

•  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

Qualified first-time homebuyers in Delaware can leverage homebuyer assistance programs to help with the down payment, mortgage, and closing costs. These may be offered by the state or the federal government and can make homeownership more affordable. It’s also worthwhile to compare what these and offers from other lenders to find the right fit for your situation.

Who Is Considered a First-Time Homebuyer in Alabama?

Let’s take this on first, because the answer is a little counterintuitive.

A first-time homebuyer isn’t just anyone who has never owned a home. It’s anyone who hasn’t held an ownership interest in a primary residence over the past three years. Chances are if you’re buying a home, for the first time or the first time in recent memory, you’re going to need a home mortgage loan, and newcomers to the process have lots of options.

Recommended: First-Time Homebuyer’s Guide

4 Alabama Housing Programs for First-Time Homebuyers

Alabama Housing Finance Authority programs are generally dedicated to low- to moderate-income homebuyers with decent credit who need help with a down payment or closing costs.

Here are details about the AHFA’s main offerings.

1. First Step

AHFA has reintroduced a longtime program, now called First Step, offering first-time or repeat homebuyers below-market interest rates and up to $10,000 in down payment assistance. Nearly 50,000 Alabama households have benefitted from the program financed through Mortgage Revenue Bond loans.

The First Step program features the following:

•   Fixed-rate, 30-year mortgages.

•   Special low mortgage interest rates on FHA, VA, USDA, and Freddie Mac’s HFA Advantage conventional loans

•   Down payment assistance up to $10,000 or 4% of the home price, whichever is lower

•   Down payment funds secured by a 10-year second mortgage combined with the 30-year, fixed-rate First Step mortgage

•   Loan servicing by AHFA’s ServiSolutions, so homeowners write one check each month

To apply, contact a participating lender .

Email [email protected] to get help finding a lender in your area.

2. Step Up

Step Up is the flagship homeownership program of Alabama Housing and is designed specifically for moderate-income first-time and repeat homebuyers who can afford a mortgage, but need help with the down payment. It provides down payment assistance of up to 4% of the home’s sales price (up to $10,000) in the form of a second mortgage packaged with a 30-year, fixed-rate first mortgage.

The Step Up program features the following:

•   Down payment assistance repayable over 10 years.

•   HFA Advantage conventional, FHA, or VA loans

•   Qualifications including a minimum credit score of 640 for borrowers with incomes below 80% of area median income, or 680 for borrowers with incomes above 80% of area median income but less than $159,200

•   Requirement of a debt-to-income (DTI) ratio of less than 45%

•   Income cap of $159,200, regardless of household size or location

•   Homeownership education course requirement for borrowers

3. Affordable Income Subsidy Grant

In addition to Step Up, the Affordable Income Subsidy Grant provides lower-income HFA Advantage conventional loan borrowers with 0.50% to 1% of their total loan amount to assist with closing costs.

The grant is available to both first-time and repeat homebuyers whose income is under 80% of the area median income for the property’s location.

In addition:

•   Homebuyers must have a credit score of 640 or higher

•   DTI must be 45% or lower

•   Must complete a homeownership education course

4. Mortgage Credit Certificate

The mortgage credit certificate allows borrowers to reduce their federal tax liability, dollar by dollar, by a percentage of their annual mortgage interest paid, up to $2,000, for the life of the loan. Any remaining interest can be claimed as an annual mortgage interest dedication.

The certificate can be used with any 30-year fixed-rate amortizing mortgage offered by an AHFA participating lender. You must be a qualified homebuyer or buying a home in a targeted area.

The home purchase price must be under $665,173 for targeted areas or under $544,233 for non-targeted areas.

Mortgage credit rates are based on the loan amount:

•   20% MCC for loans of $150,001 or greater: no cap

•   30% MCC for loans of $100,001 to 150,000: $2,000/year cap

•   50% MCC for loans of $100,000 or less: $2,000/year cap

How to Apply to Alabama Programs for First-Time Homebuyers

If you are seeking AHFA homebuyer assistance, you’ll need to seek out a participating lender. Be sure to verify whether you fall within the prescribed income and purchase price limits. The lender can guide you after that.

If you haven’t crunched some numbers to see how much house you might be able to afford, use a home affordability calculator to do the math.

Recommended: Understanding the Different Types of Mortgage Loans

Federal Programs for First-Time Homebuyers

Several federal government programs exist 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 several 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.

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 a list of approved lenders that participate in the FHA loan program. 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.

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.

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 allow a DTI of up to 57%, vs. a typical 45% maximum for a conventional loan.

FHA loans always require mortgage insurance: This includes an upfront fee of 1.75% of the base loan amount, which can be rolled into the loan, and annual premiums for the life of the loan. As of 2025, monthly MIP for new homebuyers is 0.15% to 0.75%. A down payment of at least 10% allows the removal of mortgage insurance 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.

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. 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

Eligible active-duty members of the military, veterans, reservists, and surviving spouses 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 benefit of VA loans is that 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.

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, emergency medical technicians, and teachers qualify for mortgages in the areas they serve. Borrowers can receive 50% off a home in what HUD calls a “revitalization area.” They must live in the home for at least three years.

For more information, visit the HUD program page.

Alabama First-Time Homebuyer Stats for 2025

•   Median home price in Alabama: $289,700

•   Number of homes for sale: 26,883

•   Average home value: $234,142

•   Median down payment: $32,550

•   Percent of sales over list price: 16.1%

•   Housing units owner-occupied: 69.9%

•   Average credit score in Alabama: 685

•   Percentage of buyers nationwide who are first-time buyers: 24%

•   Median age of first-time homebuyers: 38

•   Median down payment for first-time homebuyer: 9%

Additional Financing Tips for First-Time Homebuyers

In addition to federal and state government-sponsored lending programs, while you’re using a mortgage calculator to project mortgage payments, you might want to hone your knowledge about 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 defines a first-time homebuyer, for the purposes of IRA withdrawals, as someone who has not owned a principal residence in the last two years. 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. With most plans, you can borrow up to 50% of your 401(k) balance, up to $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

First-time homebuyers in Alabama of modest means may be able to take advantage of attractive mortgage and down payment/closing cost programs. Other first-time buyers can hunt for a fitting home loan on their own.

By Walecia Konrad

(Last Updated – 06/2025)

The Louisiana housing market is a welcoming one. The average home value is $208,234, and has held fairly steady year over year, according to Zillow. Compare this to the national figure of $367,711, which is up 1.4% over the past 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?

If you’ve never bought a home, of course you’re a first-time homebuyer. But the U.S. Department of Housing and Urban Development (HUD) also classifies the following as first-time homebuyers:

•   Someone who hasn’t owned a principal residence in the past three years

•   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 Premier 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 requires borrowers to contribute 1% of the home purchase price or $1,500, whichever is less. Gifts are not allowed.

No credit score is needed. The loans can only be used for single-family homes. Buyers must 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.

Some towns and nonprofits also have local programs for first-time homebuyers. So another smart move is to search online for the name of the town where you’d like to live plus the phrase “first-time homebuyer”.

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 Eligible active-duty members of the military, veterans, reservists, and surviving spouses 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].

U.S. 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 .

U.S. 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 2025

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

•  Average home value: $208,234

•  Median down payment: $20,500

•  Average credit score among homebuyers: 690

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. When it comes to IRA withdrawals, the IRS considers anyone who has not owned a primary residence in the past two 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, within a 12-month period 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.