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2022 Louisiana First-Time Homebuyer Programs

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Louisiana offers first-time homebuyer programs that offer down payment and closing cost assistance for qualified borrowers. These programs have specific rules about how much money you make and where you can buy. For example, you might have to live in a home for a certain amount of time; selling or even refinancing before the time period is up would mean paying back some or all of the money.

If you’re looking for a home of your own in Louisiana, read on to learn which first-time homebuyer program may be the right fit.

Louisiana statewide and local first-time homebuyer programs

The Louisiana Housing Corporation partners with the U.S. Department of Housing and Urban Development (HUD) to provide cash assistance for down payments, closing costs and other homebuying expenses. Buyers may have to meet income limits and other eligibility requirements.

Here are five programs designed to help Louisiana residents get into homes of their own.

Program nameAssistance amountAssistance typeWhere it’s available
Market Rate GNMA Program3% to 4% of loan amountDown payment, closing costs or prepaid itemsStatewide
Direct Homebuyer Soft Second Mortgage Assistance Program Up to $60,000Forgivable mortgage (up to $55,000); closing cost assistance (up to $5,000)New Orleans
Resilience Soft Second Program Up to $60,000Forgivable mortgage (up to $55,000); closing cost assistance (up to $5,000)Parishes affected by the Great Floods of 2016
Mortgage Revenue Bond Home Program5% to 9% (depending on loan size)Money toward down payment, closing costs; reduced mortgage insurance for conventional loansGreater New Orleans and Baton Rouge areas
Mortgage Revenue Bond Assisted Program 4%Forgivable mortgage; reduced mortgage insurance for conventional loansGreater New Orleans area and Greater Baton Rouge, Alexandria and Monroe non-targeted areas

What to know about different types of down payment assistance

Louisiana’s first-time homebuyer programs offer help in a couple of ways:

“Soft second” mortgage. This is a secondary mortgage loan that beefs up a down payment and helps pay closing costs. The loan is forgiven if you stay in the residence for 10 years.Grants. Grant money can be used for closing costs or a down payment and doesn’t ever have to be paid back, provided you meet strict requirements.

How Louisiana first-time homebuyer programs work

LendingTree researched 2022 Louisiana Housing Corporation guidelines and program websites to compile information on the programs below. Keep in mind that local governments may fund their own homebuyer assistance programs during the year, so contact regional housing authorities and/or housing nonprofits to see if new help is available.

Here are a few other basic steps you’ll need to take.

1. Research income limits. Down payment assistance programs are available to low- to moderate-income earners. Check each program’s website to learn the income limits for your parish and family size.

2. Be aware of payback requirements. If you leave the home before a specified time frame, you may have to pay back some or all of your assistance money. Refinancing the loan within a certain number of years might also trigger payback.

3. Homebuyer education. You’ll have to complete a homebuyer education course before you can qualify for assistance from some programs, including both Mortgage Revenue Bond programs and the Direct Homebuyer Soft Second Mortgage.

4. Get approved for a mortgage by a program-endorsed lender. Each first-time homebuyer program provides a link to its list of approved lenders.

Louisiana first-time homebuyer program requirements

Before you apply for a loan, make sure to check out the basic requirements of first-time homebuyer programs. They might be more strict than the minimum requirements for a first mortgage. Use the table below to decide which program(s) would be the best fit.

Program name Credit score minimumDTI ratio maximumMaximum income limitHow long you have to live in the home
Market Rate GNMA Program64043% or less, depending on FHA/VA/RD guidelines$84,525No limit
Direct Homebuyer Soft Second Mortgage Assistance ProgramDepends on the lender the borrower chooses48%$39,450 to $74,350 (depending on family size)10 years
Resilience Soft Second ProgramNo minimum48%Up to 80% of area median income10 years; 2 years for closing cost assistance
Mortgage Revenue Bond Home Program64041%$39,450 to $62,800No limit
Mortgage Revenue Bond Assisted Program640No additional DTI ratios other than those required by loan type$64,300 to $90,275 (depending on location and family size)No limit

THINGS YOU SHOULD KNOW

Assistance programs are based on area median income limits. Before you apply, make sure

you don’t earn more than a program allows. Check the current Louisiana income limits for your parish at the HUD website.

National first-time homebuyer programs

In order to take part in any of the first-time homebuyer assistance programs listed above, you’ll typically need to get approved for a first mortgage. Some government-backed loan programs do not require a down payment; these may also be known as national first-time homebuyer programs, even though they’re not necessarily limited to people looking for a first home.

Louisiana’s first-time homebuyer program benefits can be used for the down payment and maybe even the closing costs on the following loan types:

  • Conventional loans. These mortgages aren’t backed by the U.S. government and have more stringent requirements — and higher loan limits — than government-backed mortgages. Both the Freddie Mac Home Possible® and Fannie Mae HomeReady® conventional loans are popular among first-time homebuyers.
  • FHA loans. The Federal Housing Administration backs loans for prospective homebuyers with lower credit scores and higher debt ratios than a conventional lender would permit. It’s possible to borrow with a credit score as low as 500. Note, however, that FHA loan limits are lower than conventional ones, and you’ll be paying two kinds of FHA mortgage insurance.
  • VA loans. The U.S. Department of Veterans Affairs guarantees these loans for military borrowers. A VA loans has no down payment or mortgage insurance requirement, though you’ll need a certificate of eligibility from the VA.
  • USDA loans. The U.S. Department of Agriculture backs mortgages for low- to moderate-income borrowers in designated rural areas. No down payment is required for USDA loans, but you’ll have to pay 1% upfront (this can be rolled into the loan) plus 0.35% per year (which is added to your monthly payment).

FAQs about Louisiana’s first-time homebuyer programs

Who qualifies as a first-time homebuyer in Louisiana?

“First-time homebuyer” doesn’t necessarily mean someone who’s never owned a home. The HUD defines a first-time homebuyer as someone who:

  • Has not owned a home for the past three years
  • Has only owned with a former spouse
  • Has only ever owned a home that wasn’t permanently affixed to a foundation
  • Has owned a property that can’t be brought up to code for less than the price of building a permanent residence.

Note: Some programs also attach income restrictions to the “first-time homebuyer” concept.

Can I qualify for down payment assistance in Louisiana?

If you meet the requirements for any of the first-time homebuyer programs listed above, you might qualify for down payment assistance.

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

If you choose and qualify for a USDA loan or a VA loan, you won’t need a down payment at all. Conventional first-time homebuyer lenders will accept a 3% down payment. For an FHA mortgage loan, you’ll need at least a 3.5% down payment.

Home price trends in Louisiana’s major areas

Home prices in Louisiana rose in the past year, but appreciation was not as high as in the rest of the United States. The biggest price jump was the New Orleans-Metairie region, which saw a one-year increase of 12.7% as of the third quarter of 2021; in that same time frame, homes appreciated by 15.2% in the U.S. at large.

The median home price in New Orleans is $275,400 as of the third quarter of 2021. In Orleans Parish, where New Orleans is located, the National Association of Realtors (NAR) notes $1,014 as a typical monthly mortgage payment as of the second quarter of 2021, up $34 from a year earlier.

In Baton Rouge, the one-year appreciation rate was 9% and the three-year appreciation rate was 19.9%. Baton Rouge’s median home price is $255,400. The NAR lists the monthly mortgage payment for East Baton Rouge Parish in the second quarter of 2021 as $851, up $30 from a year earlier.

 

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