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Mississippi First-Time Home Buyer Programs of 2019

March 22, 2019
Finding the Right Mortgage, Mortgages
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Buying a home costs a lot of money upfront, and the Mississippi Home Corporation offers financial help with a down payment and closing costs in order to give first-time home buyers a boost.

The Mississippi Home Corporation defines a first-time home buyer as someone who has not owned a home in the past three years, although exceptions are sometimes made for veterans and people buying in federally designated target areas where incomes are typically low.

Buyers may also take advantage of national loan programs with low credit score or down payment requirements. Explore all the options for buying your first home in the Magnolia State.

National first-time home buyer programs

These loan programs are available in all states. They allow qualified home buyers to purchase homes with a small down payment — or even with no down payment at all. Loans that require lower down payments are important to many first-time buyers.

Conventional mortgage

National program

Best for

Low down payment

Limited mortgage insurance premiums

What you need to know

First-time home buyers can get a conventional home loan with as little as 3% down if the mortgage meets requirements set by Fannie Mae and Freddie Mac. And if you put at least 20% down, you won’t have to pay mortgage insurance. Most lenders require a minimum credit score of 620 to qualify for a

 

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

Guaranteed by the U.S. Department of Veterans Affairs, these mortgages are available to military members, veterans and surviving spouses. If you qualify, you’ll see benefits such as no minimum credit score and no down payment or mortgage insurance, but you'll likely have to pay a VA funding fee.

 

USDA loans

National program

Best for

Low down payment

Rural

What you need to know

The USDA home loan program encourages rural and suburban homeownership by offering zero-down-payment mortgages to lower-income buyers. Borrowers with nontraditional credit data, like rent or utility payments, can still apply, but those with a score of 640 or above will experience faster loan

 

Mississippi first-time home buyer programs

Mississippi Home Corporation helps home buyers with down payments and closing costs. The programs target first-time buyers as well as veterans, residents of low-income areas and rural teachers.

MHC highlights and eligibility requirements

HIGHLIGHTS

  • Available to first-time home buyers.
  • Some programs are available for repeat buyers.
  • Assistance is in the form of grants and forgivable loans.
  • Mortgage interest tax credit is available.

ELIGIBILITY

  • Home must be in Mississippi and owner-occupied.
  • Borrower must meet minimum credit score requirements, which vary by loan program and down payment percentage.
  • Property must be a single-family home, town house, condominium or qualified manufactured home.
  • Home buyer course required for all programs.
  • Other program-specific requirements may apply.

Smart Solution

State program

Best for

Low mortgage rates

Down payment assistance

Closing cost assistance

What you need to know

This program offers competitive interest rates, lower mortgage insurance premiums and down payment assistance. The down payment assistance is in the form of a 10-year loan for 3.5% of the purchase price, at the same interest rate as the primary mortgage. An income limit applies.

 

Mortgage Revenue Bond 7 (MRB7)

State program

Best for

Down payment assistance

Closing cost assistance

What you need to know

Provides $7,000 for a down payment and closing costs. It's mostly for first-time home buyers, but also for repeat buyers who are veterans or those buying in specific low-income areas. The assistance is an interest-free loan that is forgiven after 10 years. The program places limits on household

 

Housing Assistance for Teachers (HAT)

State program

Best for

Educators

Down payment assistance

Closing cost assistance

What you need to know

This state program is designed to entice qualified teachers to move to rural areas. By agreeing to teach in a targeted district for at least three full school years, home buyers are eligible for a grant of up to $6,000 for a down payment and closing costs. The buyer has to contribute at least 1% of

 

Mortgage Credit Certificate

State program

Best for

Tax credits

What you need to know

The Mortgage Credit Certificate allows a first-time home buyer to claim a tax credit of 40% of the interest paid annually on the mortgage, capped at $2,000. Limits apply on household income and home price.

 

» MORE: Tips for first-time home buyers

Your next step

Visit Mississippi Home Corporation’s homeownership programs page for information on how to get started and find out which program is right for you. MHC doesn’t lend money or take loan applications itself. To apply, follow the link to the program you’re interested in; you should see another link to a list of participating lenders.

» MORE: Best low-down-payment mortgage lenders

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