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North Carolina First-Time Home Buyer Programs of 2019

Feb. 6, 2019
Finding the Right Mortgage, Mortgages
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Good news for first-time home buyers and repeat buyers in North Carolina: The state offers a loan program that comes with down payment assistance.

The North Carolina Housing Finance Agency has a program called NC Home Advantage Mortgage, which combines affordable, fixed-rate loans with down payment assistance of up to 5% of the loan amount. Even better: Borrowers don’t have to pay back the down payment help if they own the home long enough.

National first-time home buyer programs

Conventional mortgage

National program

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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

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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

 

» MORE: Requirements for getting an FHA loan

 

VA loans

National program

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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

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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

 

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NCHFA highlights and eligibility requirements

HIGHLIGHTS

  • Available for credit scores as low as 640
  • Get up to 5% down payment assistance on an FHA, VA or USDA loan, and up to 3% down payment assistance on a conventional loan
  • Choose among conventional, FHA, VA or USDA mortgages from private lenders recommended by the NCHFA
  • Depending on loan type, buy a house, town house, condominium, duplex or new manufactured home
  • There is no sales price limit on the home for the loan program

ELIGIBILITY

  • Must meet limits on income
  • Overall debt-to-income ratio has to be 43% or less
  • Home buyer education may be required
  • Mortgage insurance will be required when a down payment is less than 20%

» MORE: 25 tips for first-time home buyers

North Carolina home buyer assistance programs

NC Home Advantage Mortgage

State program

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Best for

Down payment assistance

Closing cost assistance

What you need to know

All loans under the program are 30-year fixed-rate mortgages. The minimum credit score to buy a manufactured home is 660; it’s 640 for other types of homes. Low- to moderate-income home buyers can get down payment assistance with the NC Home Advantage Mortgage. It’s available to qualified buyers who

 

Self-Help Loan Pool

State program

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Best for

Low mortgage rates

What you need to know

Through the Self-Help Loan Pool, low-income borrowers can get 0% interest rate mortgages to buy homes from Habitat for Humanity or other self-help homeownership organizations. The assistance comes in the form of a grant of up to $35,000 that the organization combines with its own financing to offer

 

Mortgage Credit Certificates

State program

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Best for

Tax credits

What you need to know

The NCHFA issues mortgage credit certificates to eligible first-time home buyers, veterans and buyers in targeted areas. Qualified mortgage borrowers can get a credit to offset their federal income tax bills, up to $2,000 each year they own the home. Lenders can inform borrowers about the income and

 

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Your next step

Visit the NCHFA’s information page for the NC Home Advantage Mortgage. This page has a link to a lender lookup tool and a way to find a real estate agent who has worked with program participants in the past.

The program requires you to take a homeownership education course. The lender will help you enroll.

If you’re interested in the Self-Help Loan Pool, visit NCHFA’s community partners page and select your county and the “Self-Help Loan Pool” program to see what’s available.

» MORE: Best North Carolina mortgage lenders

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