While houses are becoming more affordable, you may face challenges such as closing costs, saving for your down payment, higher utilities, among others. These hurdles shouldn’t stop you from buying your dream home.
Ohio offers low-income buyers grants and loans to make your home buying dreams come true. Don’t know what we’re talking about? Keep reading to learn everything about your state’s housing loans and grants options.
Best Ohio Loans & Grants for Low-Income Home Buyers
Before buying a home, we recommend you look at your finances and what you can afford. Have you saved enough for your down payment?
Can you pay your monthly mortgage payments? These questions can tell you more about where you stand when it comes to applying and getting your home loan approved. Ohio offers several grants and loans that can put your worries to rest.
Don’t know where to start? Here are the top Ohio grants and loans you should consider to buy your dream home.
Ohio Your Choice! Down Payment Assistance Program
Typically, the biggest hurdle buyers must overcome is saving enough for their down payment. Ohio home buyers may qualify for down payment assistance of 2.5% or 5% of the purchase price. You may use your loan to pay your down payment, closing costs or other related pre-closing expenses.
The interest rate of your loan will depend on the amount you borrow. If you take a high amount of assistance, you’ll be charged a higher interest rate.
The benefit of this program is that the Ohio Housing Financing Agency (OHFA) forgives your loan after seven years. Keep in mind that you’ll have to repay your assistance if you decide to sell or refinance your home before that.
Ohio Mortgage Tax Credit
Paying more taxes is an adjustment you must make as a home buyer. If you’re a first-time home buyer taking an OHFA or non-OHFA mortgage and need down payment assistance, you may be eligible for a mortgage credit certificate. To be eligible, you must meet the income and home purchase price requirements.
Your certificate may be for up to 40% of the annual mortgage interest paid. Borrowers may use the certificate for 30 years if it’s their primary residence.
If you don’t take an OHFA mortgage, your tax credit may be lower. Home buyers that use this credit can receive down payment assistance for 2.5% or 5% of the purchase price.
Ohio Grants for Grads
Ohio wants recent graduates to stay in the state. They offer two grants for first-time home buyers who graduated within the last 48 months. To be eligible, you must have graduated from an eligible degree at a US Department of Education-accredited higher education institution.
Associate’s, bachelor’s, master’s, and doctoral degrees make you eligible for these grants. These programs offer the best of both worlds. You’ll receive discounts on your mortgage interest rates and down payment assistance of 2.5% or 5% of the purchase price.
OHFA will forgive your assistance after five years unless you sell your home or leave Ohio before that time. Even if you leave before the term, you may be eligible for repaying only a certain amount.
Before applying for your home loan, we recommend you cover your bases and do your homework. Don’t apply for a loan based on what worked for someone you know. Prioritize learning everything you can about low-income home loans to make an informed decision.
Best Federal Mortgage Options for Low-Income Buyers
State grants and loans aren’t your only option. You may consider applying for federal home loan programs designed to help low-income buyers. The options range from rural home loans to mortgages for active members of the military.
Don’t know what program may work for you? Here are the top federal home loan programs that may help you achieve your home buying dream.
- FHA Home Loan Program: It’s one of the most popular federal programs that help consumers from diverse backgrounds. Low credit score borrowers may qualify for this loan program. Depending on your credit, you may be eligible for a 3.5% down payment on your mortgage.
- USDA Loan Program: USDA loans are available for low to moderate income home buyers in rural areas. You must buy a property that meets the program requirements. The best thing about this program is that it doesn’t require down payment.
- VA Loan Program: VA loans are available for retired and active members of the military. This loan program doesn’t require mortgage insurance or down payment.
These loan programs may be your best option depending on your financial condition and the property. Even though, the FHA loan program is the top option for most home buyers. We recommend you verify the FHA options available in your state.
Best Private Lender Programs in Ohio for Low-Income Home Buyers
Most private lenders offer loan programs with Fannie Mae and Freddie Mac. These programs make mortgages more affordable but, require borrowers to meet their homeownership educational programs.
Keep in mind that having a credit score of 620 or more may improve your chances of approval for a mortgage under these programs. Fannie Mae and Freddie Mac only require a down payment of 3% of the purchase price.
Fannie Mae’s HomeReady program is designed for low to moderate income borrowers. While Freddie Mac’s HomeOne program is only available for first-time home buyers but, not limited by income or location.
Most private lenders offer mortgages under these programs. Yet, you should learn about the best mortgage lenders before applying for your home loan.
Home Buyer Rebate
First-time home buyers considering financing should consult a real estate agent. Our Clever Partner Agents can help you every step of the way from scheduling your on-demand showings to finding the right lender.
Your realtor may also offer a rebate of $1,000 for your closing costs or points on your mortgage. Partnering with a Partner Agent can help you get the best deal by offering a home buyer rebate while helping you find your dream home.