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Louisiana First-Time Home Buyer Programs of 2019

Dec. 19, 2018
Finding the Right Mortgage, Mortgages
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Buying a home in the Bayou State can mean choosing a neighborhood close to lakes and rivers, abundant with recreational opportunities, or selecting a house in a historic district, bounded by brick streets and boutiques. Either way, Louisiana’s great food and music are always nearby.

Choosing a mortgage is much harder. But first-time home buyers living in Louisiana can access some helpful programs, from down payment assistance to closing cost grants. The Louisiana Housing Corporation helps low- to moderate-income residents obtain 30-year fixed-rate mortgages with below-market interest rates.

National first-time home buyer programs

For residents in all 50 states, these national loan programs allow low, and sometimes even no down payments.

Conventional mortgage

National program

Best for

Low down payments

Limited mortgage insurance premiums

What you need to know

A conventional mortgage is a home loan that isn’t guaranteed or insured by the federal government. Conventional mortgages that conform to the requirements set forth by Fannie Mae and Freddie Mac allow down payments as low as 3% for first-time buyers or lower-income home buyers. Unlike FHA loans,

 

FHA loans

National program

Best for

Low credit score

Low down payment

What you need to know

This is the go-to program for many first-time home buyers with lower credit scores. The Federal Housing Administration allows down payments as low as 3.5% for those with credit scores of 580 or higher. The FHA will insure loans for borrowers with scores as low as 500 but requires a 10% down payment

 

VA loans

National program

Best for

Military

Low down payment

What you need to know

The U.S. Department of Veterans Affairs helps service members, veterans and surviving spouses buy homes. VA loans are especially generous, providing competitive interest rates, often requiring no down payment or mortgage insurance. Although there is no official minimum credit score, most

 

USDA loans

National program

Best for

Low down payment

Rural

What you need to know

A USDA home loan is a zero-down-payment mortgage for eligible rural and suburban home buyers. USDA loans are issued by the U.S. Department of Agriculture through the USDA Rural Development Guaranteed Housing Loan Program. There are income limitations, which vary by region. Applicants with credit

Louisiana Housing Corporation first-time home buyer programs

Programs offered by the Louisiana Housing Corporation (LHC) can apply to first-time home buyers as well as to state residents purchasing again. Some programs are for particular parishes or regions in the state. There are income limits, as well as maximum purchase prices.

Details vary by program, but here are some general guidelines.

LHC highlights and eligibility requirements

Highlights

  • Down payment and closing cost assistance up to 9% of the home’s purchase price
  • Reduced mortgage insurance programs available
  • No origination or discount fees
  • 30-year fixed-interest loans at or below market rates

Eligibility

  • A home buyer education course is required
  • Minimum credit score for most programs: 640
  • The home must be your primary residence
  • Maximum purchase price limits range from $253,800 to $417,000, depending on the program

» MORE: Tips for first-time home buyers

LHC Choice Conventional program

State program

Best for

Down payment assistance

Closing cost assistance

What you need to know

Additional down payment and closing cost assistance — up to 6% of the home's purchase price — is available in the Choice Conventional program.

 

LHC Market Rate GNMA program

State program

Best for

Government-backed loans

Closing cost assistance

What you need to know

This program offers FHA, VA or USDA backed loans and 4% of the home's purchase price in cash assistance. Repeat home buyers may also qualify.

 

LHC Mortgage Revenue Bond Assisted program

State program

Best for

Down payment assistance

Closing cost assistance

What you need to know

Allowing 4% of the home's purchase price in assistance in the form of a forgivable second mortgage, the Assisted Program also has income and purchase price limits that may vary in Baton Rouge, Alexandria, Monroe and New Orleans. If the property is in a target area, higher income limits will apply.

 

LHC Home/MRB program

State program

Best for

Low-income borrowers

Closing cost assistance

What you need to know

For borrowers whose household income falls below 80% of the area’s median income, this program offers assistance ranging between 5% and 9% of the home's purchase price in the form of a forgivable grant. The Home/MRB Program requires a debt-to-income ratio below 41% and the borrower must have a

 

LHC Delta 100 program

State program

Best for

Low down payment

Closing cost assistance

Low credit score

Rural

What you need to know

An area-specific program, Delta 100 targets the eastern parishes of the state along and adjacent to the Mississippi River. Catering to low-to-moderate income first-time home buyers, the program offers up to 100% financing and as much as 3% of the home's purchase price in closing cost assistance. No

 

LHC Mortgage Credit Certificate program

State program

Best for

Tax credits

What you need to know

The MCC program allows first-time homebuyers, veterans and buyers purchasing a home in designated areas with low- to moderate-income to be eligible for a tax break. Qualified taxpayers may claim up to 40% of their annual mortgage interest payments, up to a maximum of $2,000 a year, as a tax credit

Your next step

Although these programs are enabled by the Louisiana Housing Corporation, authorized lenders implement them. It’s smart to shop more than one lender, as credit qualifications, terms and other borrower requirements may vary from one lender to the next.

For full details on any Louisiana Housing Corporation program, visit the LHC website.

To get started, consult the list of lenders that participate in LHC programs.

» MORE: Best lenders for first-time home buyers

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