2021 North Carolina First-Time Home Buyers
Buying your first home can seem overwhelming, especially when you are applying for a mortgage and covering the upfront costs. If you are looking for a home in North Carolina, there is an advantage: the North Carolina Housing Finance Agency can help you with your deposit, and offer you an affordable loan and other ways to save, if you qualify.
North Carolina First-Time Home Buyers Loan Programs
The North Carolina Housing Finance Agency (NCHFA) operates three programs to meet the diverse needs of potential homeowners: the NC Home Advantage Mortgage, the NC 1st Home Advantage Down Payment, and the NC Home Advantage Tax Credit.
NCHFA NC Home Advantage Mortgage
The NCHFA NC Home Advantage Mortgage is available to both first-time home buyers and those who already own a home, or “move-in” buyers. A first-time home buyer is considered to be someone who has not owned a home in the past three years.
The program offers a fixed rate mortgage – either a conventional, FHA, VA, or USDA loan – and up to 5% down payment assistance (3% for a conventional loan). This help comes in the form of a second, interest-free mortgage that doesn’t need to be paid off unless you sell your home or pay off or refinance your first mortgage within the first 15 years of your loan term.
Here are the conditions to qualify:
- Your annual income does not exceed $ 92,000.
- Your credit score is 640 or higher.
- Your debt-to-income ratio (DTI) does not exceed 43%.
- You are purchasing either a single family home, townhouse, condo, duplex (FHA loan only), or a new manufactured home (FHA, VA or USDA loans only, with a minimum credit score of 660).
North Carolina Down Payment Assistance
NCHFA NC 1st Advantage Home Advantage
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NCHFA also offers $ 8,000 down payment assistance specifically to first-time homebuyers, veterans and those buying in special targeted markets through the NC 1st Home Advantage down payment program. This assistance comes in the form of a second zero percent mortgage fully canceled after 15 years. To be eligible, you must obtain an NC Home Advantage mortgage and meet the requirements for this program.
Other North Carolina Homebuyer Assistance Programs
NC Home Advantage Tax Credit
First-time buyers and veterans alike can combine an NC Home Advantage Mortgage with the NC Home Advantage Tax Credit, the mortgage loan certificate (MCC).
An MCC allows you to claim a federal tax credit equal to 30% of your mortgage interest if you buy an existing home or 50% if you buy new construction. Regardless of the rate, the credit is capped at $ 2,000 per year, but can be used each year as long as you live in your home.
Note that this incentive cannot be combined with the NC 1st Home Advantage deposit.
Other first-time home purchase loan programs
While the NCHFA can help you navigate your first home purchase, you don’t need to go through the state housing finance authority to find an affordable first-time home purchase loan. . Many mortgage lenders offer low-down or no-down mortgages, including FHA, VA, and USDA loans, which can help you get to your first home faster. Explore your options with Bankrate’s guide to first-time home purchase loans and programs.
For other North Carolina homeownership programs, including by city, visit HUD.gov.
If you’re interested in any of the North Carolina Housing Finance Agency’s programs, visit the organization’s website for program information and guides on what you need to know before buying your first home. You can also use the website to find a mortgage lender in your area, and can specifically search for Spanish-speaking lenders.
Whichever mortgage loan is best for you, it’s worth comparing lenders and offers to get the best mortgage rate for your credit and financial situation. You can see the current Mortgage Rates in North Carolina via Bankrate.