There are several statewide grant and loan programs for which you could qualify as a first-time homebuyer in Ohio. These programs typically offer down payment assistance and flexible borrower requirements. For example, you might be eligible for special benefits if you have a moderate income, just graduated from college, or served in the military.
Programs for first-time homebuyers in Ohio
You could be eligible for a first-time homebuyer program in Ohio if you have not owned a primary residence in the last three years, are an honorably discharged veteran, or live in a targeted area. Depending on the program, it may also be possible to add down payment assistance or job-related loan benefits to lower your interest rate or cover your upfront financing costs.
The Ohio Housing Finance Agency (OHFA) offers the majority of the state's first-time buyer programs. In addition, several Ohio cities and counties offer incentives to homebuyers. Here are some programs you should consider:
OHFA Homebuyer Program
Low- or moderate-income borrowers may qualify for traditional OHFA loans for first-time buyers. This program has more lenient income and purchase limits than a typical home loan, making it easier to qualify.
The State Housing Agency works with participating lenders to provide 30-year fixed-rate mortgages for the following loan types:
You can compare OHFA mortgage rates for conventional and government-backed loans to current asset 30-year mortgage rates to find your best option.
The Ohio Heroes program offers reduced interest rates to borrowers who work in one of these careers:
- Education: teachers (pre-K through 12. Class), administrators and consultants
- First responders: police officers, firefighters, volunteer firefighters, paramedics and EMTs
- Medical: physicians, nurse practitioners (registered nurses and licensed practical nurses), and STNAs
- Military: active duty, reserve components, veterans and surviving spouses
Interest rate reduction is up to 0.25% compared to standard OHFA rates. Borrowers may also qualify for down payment assistance benefits, but pay a higher interest rate to do so.
Your choice! Down payment assistance
This first-time homebuyer down payment assistance program through OHFA provides forgivable assistance of either 2.5% or 5% of the home purchase price. Your proceeds can help cover the following:
The entire assistance amount is forgiven after you have lived on the property for seven years. However, if you sell or refinance your home early, you must repay it in full.
Unfortunately, mortgage rates are higher if you apply for this subsidy. The 5% down payment assistance loans have the highest rates. Be sure to compare OHFA mortgage rates to today's 30-year mortgage rates to calculate your costs.
You can also combine this benefit with the Ohio Heroes and Mortgage Tax Credit Plus programs.
Mortgage tax credit
First-time homebuyers in Ohio could also be eligible for up to a 2.Receive $000 in tax savings. This mortgage loan certification is in addition to any federal mortgage tax benefits for which you are eligible and reduces your income tax liability.
How much you can deduct depends on which program you are eligible for.
- Mortgage Tax Credit Plus: You can have up to 40% of your interest on an OHFA First-Time Homebuyer loan deducted (maximum of 2.000 USD annual credit). While these loans may have a higher interest rate, they are also eligible for a 2.5% down payment assistance combined with the tax deduction.
- Mortgage Tax Credit Basic: If you take out a loan that is not offered by OHFA, you can still receive up to 30% savings on a bank-owned property. The benefit drops to 25% for properties in targeted areas and 20% for all other properties.
Because it is a non-refundable tax reduction, you may only be eligible for partial benefits if you owe less income tax.
City of Columbus American Dream Down Payment Initiative
Columbus, Ohio, low- and moderate-income residents can receive a second mortgage for their down payment and closing costs through the American Dream Downpayment Initiative (ADDI). This loan is deferred and forgiven after five years and can be up to 6% of the purchase price (maximum 7.500 USD) amount.
Aside from not having owned a home in the last three years, you must have lived in Ohio for at least six months prior to applying. So if you are moving to Ohioanother program may be a better option.
Cuyahoga County Down Payment Assistance Program
Buying a home in Greater Cleveland can be easier with a Cuyahoga County Down Payment Assistance loan. Homebuyer's income must be at or below 80% of area median income to initially qualify.
Eligible buyers can receive assistance of up to 10% of the purchase price (maximum of 16.600 USD) received in the form of loans.
In addition, the home purchase price may not exceed 166.Do not exceed $ 000. This loan is a deferred second mortgage, and buyers must make a down payment of at least 3% in order to apply. Remember, you must repay this assistance if you sell, transfer or refinance your home.
Dayton Down Payment Assistance
The HomeOwnership Center works with the City of Dayton and its neighboring communities to offer a loan to assist with the down payment. Assistance amounts vary by program, but can generally cover 10% to 20% of the home purchase price for buyers with qualifying income.
Forgiveness options also vary. While the city program does not currently offer loan forgiveness, Aloft Dayton and the Inclusive Community Fund in the greater Dayton area offer partial or full forgiveness after five years of ownership.
Ohio First-time Homebuyer Grants
Homebuyer grants are typically a one-time lump sum to reduce your closing costs and initial loan balance. Typically, you do not have to repay the balance, but may have to own your home for a certain number of years to avoid repayment penalties. Here are some grants to consider:
The OHFA Grants for Grads program offers reduced interest rates and 2.5% or 5% down payment assistance for eligible first-time homebuyer loans. Note that you cannot participate in this program without receiving down payment assistance.
The down payment assistance benefit is completely forgiven after the first five years. However, you must repay all or part of the assistance if you sell your home or move out of Ohio within those five years.
Community First Down Payment Assistance Grant provides first-time homebuyers with 3% to 5% of the purchase price of the home in the form of funds. Unlike similar programs, this program has no minimum residency requirements to qualify for Social Security benefits forgiveness. Although the Port of Greater Cincinnati Development Authority offers this program, it is available to homebuyers throughout the state.
You may want to consider this subsidy because you can get immediate equity and sell or sell your home refinance early and without penalty. Income limits vary by county and only count the borrower's income instead of the household income.
This program may be more suitable than the OFHA down payment assistance loan if you are unsure about your future plans, as there are fewer restrictions on receiving assistance.