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2022 Georgia First-Time Homebuyer Programs

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Georgia offers first-time homebuyer programs that include down payment assistance to help you afford your first house. Your family will need to fall below income limits to qualify, and the amount you may be able to receive depends on where you live and what profession you hold. In this article, we’ll go over the different first-time homebuyer programs available in Georgia, how they work and how to apply for them.

Georgia statewide and local first-time homebuyer programs

Georgia’s statewide first-time homebuyer programs are operated through the Georgia Dream Homeownership Program. You must take out a 30-year fixed-rate loan through the program to be eligible for down payment assistance through Georgia Dream. The city of Atlanta also has its own first-time homebuyer program, which we describe below.

Program nameAssistance amountAssistance typeWhere it’s available
Standard Down Payment Assistance$7,500 for standard assistance0% interest second loan for a down paymentStatewide for first-time homebuyers; available in targeted areas for all buyers
PEN Down Payment Assistance$10,000 for protectors, educators and nurses0% interest second loan for a down paymentStatewide for first-time homebuyers; available in targeted areas for all buyers
CHOICE Down Payment Assistance$10,000 for homebuyers with a family member with a disability0% interest second loan for a down paymentStatewide for first-time homebuyers; available in targeted areas for all buyers
Atlanta Housing Homeownership Down Payment Assistance ProgramUp to $20,000, or $25,000 for people working in public safety, health care, education or the military or who receive public housing vouchersForgivable loanCity of Atlanta

What to know about different types of down payment assistance

Many first-time homebuyer programs include down payment assistance, financial help in getting together the cash needed to close on a mortgage. Most mortgage programs require a down payment — as low as 3% or 3.5% for FHA loans. You may find down payment assistance in the form of grants, which don’t have to be paid back, or loans, which do.

The Georgia Dream down payment assistance programs offer financial help in the form of a 0% interest second loan, which is in addition to your mortgage. However, you don’t need to pay back this loan until you sell the home or refinance. Atlanta’s program is similar, but its down payment assistance loans are forgivable over 10 years. That means if you remain in the home without refinancing for 10 years, you don’t need to pay the assistance back at all.

Georgia’s down payment assistance programs do require you to put in some of your own money: $1,000 for the statewide programs or $1,500 for the city of Atlanta’s program. The rest of the down payment can come from the assistance program.

How Georgia first-time homebuyer programs work

To take part in Georgia’s first-time homebuyer programs, you’ll need to go through the steps outlined in Georgia Dream. The process usually takes about 60 days to complete, though there can be delays if you are not able to provide the required documentation. Some lenders can get the process done more quickly.

Step 1: Contact a Georgia Dream lender

To qualify for Georgia’s statewide first-time homebuyer programs, you’ll need to apply for a mortgage with a participating Georgia Dream lender. You can find a list of these lenders on the Georgia Dream website, or get help by calling 1-800-359-HOME (4663). You may consider contacting a few different lenders to get an idea of what you will be able to qualify for.

Step 2: Get prequalified

The lenders you choose will make sure that you are qualified to take part in the Georgia Dream program and let you know what loan options you may have. Georgia Dream loans are available as conventional loans, FHA loans, VA loans or USDA loans. You’ll need to qualify through one of these programs in addition to Georgia Dream to be able to buy the home.

Step 3: Search for a home

Once you’re qualified for a loan, you can start searching for a home. Keep in mind, the home you select will have to fall below purchase price limits set by Georgia Dream. In most parts of the state, the purchase price of your home cannot be more than $200,000. However, in some counties — mostly in the Atlanta area — the home price can go up to $250,000.

Step 4: Take a homebuyer education course

To qualify for Georgia Dream, you must take a homebuyer education course. You have the option of going to a homebuyer education workshop, participate in individual counseling or go through an online course. You can find a list of approved homebuyer education options on the Georgia Dream website.

Step 5: Get final approval

You’re now ready to settle on a home and fill out a formal loan application. Your lender will give you instructions on what documents you’ll need to provide and handle the paperwork for your loan and the Georgia Dream program. After your lender signs off on your application, your information will go to Georgia’s Department of Community Affairs for final approval and funding of your down payment assistance, if applicable.

Georgia first-time homebuyer program requirements

You’ll need to qualify for a standard mortgage program to take part in these programs, but they each have their own criteria as well, including minimum credit scores and debt-to-income (DTI) ratios.

Program name Credit score minimumDTI ratio maximumMaximum income limitHow long you have to live in the home
Standard Down Payment Assistance640Varies based on credit score, but no more than 50%In most parts of the state, $60,500 for a single person or couple; $69,500 for a family of three or more. In Atlanta area, $74,000 for a single person or couple; $84,500 for a family of three or moreNo requirement
PEN Down Payment Assistance640Varies based on credit score, but no more than 50%In most parts of the state, $60,500 for a single person or couple; $69,500 for a family of three or more. In Atlanta area, $74,000 for a single person or couple; $84,500 for a family of three or moreNo requirement
CHOICE Down Payment Assistance640Varies based on credit score, but no more than 50%In most parts of the state, $60,500 for a single person or couple; $69,500 for a family of three or more. In Atlanta area, $74,000 for a single person or couple; $84,500 for a family of three or moreNo requirement
Atlanta Housing Homeownership Down Payment Assistance ProgramSet by the lenderNot disclosedNo more than 80% of the area median income, as set by the U.S. Department of Housing and Urban Development10 years for full loan forgiveness

THINGS YOU SHOULD KNOW

Many first-time homebuyer programs have income limits, meaning your household must collectively earn less than a certain amount to be eligible. Georgia’s programs are no exception. The statewide programs have income thresholds that apply based on your household size and which county you’re buying in. Atlanta’s program is based on the area median income, which you can find using HUD’s median income family lookup tool.

National first-time homebuyer programs

To take part in Georgia’s first-time homebuyer programs, you’ll need to also qualify for one of four of the most popular mortgage types: a conventional, FHA, VA or USDA loan. These mortgages aren’t exclusive to first-time homebuyers, but they’ll form the backbone of the financing for your first house. Here’s a quick run-down of what these loans are and how they work.

Conventional loans. Conventional loans are the most common mortgage type and are not insured or guaranteed by the government. You’ll generally need a credit score of at least 620 to qualify, and you can be approved with a down payment as low as 3%. If you make less than a 20% down payment, you usually need to pay for private mortgage insurance (PMI), which protects the lender in case you fail to make your payments.

FHA loans. FHA loans are issued by private lenders but insured by the Federal Housing Administration. They have more flexible criteria than conventional loans; you can qualify for an FHA loan with a score of at least 500. With that low a score, however, you’ll need to make a 10% down payment. With a credit score of 580 or above, you can make a down payment of 3.5%.

VA loans. VA loans are a benefit for military service members and veterans, run through the Veterans Administration. You can get a VA loan with no down payment required, and there’s no specific minimum credit score you must meet. Instead, a lender will take a look at your entire financial picture to make sure you can afford to make your payments.

USDA loans. USDA loans help low- to moderate-income families buy homes in rural areas. You can get a USDA loan with no down payment. These loans are guaranteed by the U.S. Department of Agriculture.

FAQs about Georgia’s first-time homebuyer programs

Who qualifies as a first-time homebuyer in Georgia?

Georgia defines a first-time homebuyer as someone who has not owned their primary home in the past three years. You can still count as a first-time homebuyer if you own a mobile home or vacant land, or if you own a vacation home or rental property that’s not your principal residence.

Can I qualify for down payment assistance in Georgia?

To qualify for down payment assistance in Georgia, you must either be a first-time homebuyer or buy a home in a targeted area, as defined by Georgia Dream. You must also fall below income limits set by the program, have liquid assets of no more than $20,000 and be able to qualify for a mortgage.

How much of a down payment do I need to buy a house in Georgia?

Georgia’s down payment assistance program will not cover the full cost of your down payment. Under Georgia Dream, you still must be able to put at least $1,000 toward your down payment. For Atlanta’s program, you’ll need to put down at least $1,500. The down payment assistance can cover the rest.

Home price trends in Georgia’s major areas

Home prices in Georgia have risen significantly over the past year, up more than 10% in most counties in the Atlanta area, according to data from the National Association of Realtors. In Fulton County, home to the capital city of Atlanta, home prices have risen 11.2% over the past year, with the median home value hitting $414,909. That translates to an average mortgage payment of $1,574, up from $1,457 year over year. In Muscogee County, home to Georgia’s second-largest city of Columbus, median home prices are up 7.4% year over year, to $155,447. This translates to a monthly mortgage payment of $590, up from $566 a year ago.

 

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