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2022 Nebraska First-Time Homebuyer Programs

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Nebraska offers first-time homebuyer programs that provide down payment and closing cost assistance and low-interest loans to qualified borrowers. Many of these programs come with restrictions, including income and housing price caps. Understanding these rules can help you pick the best Nebraska first-time homebuyer program for your foray into homeownership.

Nebraska statewide and local first-time homebuyer programs

If you are searching for a home in Nebraska, your first stop should be the Nebraska Investment Finance Authority (NIFA). This office assists first-time homebuyers in finding home loans to fit their budget. The resources provided by NIFA include financial help through first-time homebuyer programs, educational classes and information on federal loans, such as a Financial Housing Authority (FHA) mortgage.

Income limits, purchase price limits and education requirements are usually part of the requirements for first-time homebuyer programs. Below is a look at some of these programs and how much assistance you may be eligible for in Nebraska.

Program nameAssistance amountAssistance typeWhere it’s available
First Home ProgramDepends on mortgage30-year fixed, low-interest loans with $0 origination fee and $0 discount feeAll counties and cities in Nebraska
First Home TargetedDepends on mortgageSame as aboveTargeted areas in the following counties: Adams, Douglas, Jefferson, Lancaster, and Scotts Bluff
Homebuyer Assistance Program(Up to 5% of the purchase price)30-year fixed mortgage plus a 10-year, 1% interest rate second mortgage to cover down payment and closing costs.All counties and cities in Nebraska
First Home Grant*$5,000GrantAll counties and cities
Military Home ProgramDepends on the mortgage30-year, fixed, low-interest loan/low or no down payment requirementAll counties and cities

*This grant is given out of a limited amount of funding. Call NIFA headquarters to find out about availability. 

WHAT TO KNOW ABOUT DIFFERENT TYPES OF DOWN PAYMENT ASSISTANCE

Many first-time homebuyer programs include down payment assistance in the form of a cash grant or forgivable mortgage or low-interest loan. Here’s how each type of down payment assistance works.

Forgivable or low-interest second mortgage. While Nebraska’s NIFA programs don’t include forgivable mortgage assistance, many first-time homebuyer programs do. A second mortgage is a lien secured against your home, usually used to pay a down payment and other costs. Most forgivable mortgages require you to live in the home for a set amount of time. If you move or refinance before the time on the program is up, in some cases you will have to repay some or all of the money. If you have a low- or 0% interest second mortgage, you will pay very little to no interest over the life of the loan.Grant. Grant money is usually cash assistance. You typically don’t have to pay it back, although there may be a requirement for remaining in your home for a designated number of years.

How Nebraska first-time homebuyer programs work

The NIFA programs for first-time homebuyers all call for an approved mortgage in order to be eligible. Qualifying for FHA, VA or USDA home loans may further lower mortgage costs as well.

In addition, there may be other opportunities provided by nonprofits and local county governments. To learn about them, reach out to local housing nonprofits and housing authorities.

You need to take five basic steps to secure a NIFA loan. After you complete them, you can apply through a participating lender for your loan.

  1. LEARN THE INCOME LIMITS.Down payment assistance is usually designed for low- to moderate-income buyers. Check NIFA’s website to determine the income limits for your county, family size and program.
  2. MAKE SURE YOU ARE ELIGIBLE.When you apply for a NIFA program, you must make sure your income and purchase price limits meet the requirements. NIFA asks you to complete an application online. If you meet all the requirements, you will be issued a NIFA Homebuyer Certificate, used for pre-eligibility (slightly similar to a preapproval letter) for NIFA’s loan program.
  3. GET A MORTGAGE APPROVAL FROM A PROGRAM-APPROVED LENDER.NIFA has a list of approved lenders to use for its programs. All potential borrowers need to turn in their NIFA Homebuyer Certificate to a participating lender to be preapproved for a loan.
  4. TAKE A HOMEBUYER EDUCATION CLASS.All NIFA homebuyer programs require you to complete a homebuyer education class. The course is designed to help you understand what it means to own a home, as well as the risks and the rewards.
  5. FIND A NIFA REALTOR SPECIALIST.According to the NIFA website, you can use a real estate agent who is knowledgeable about NIFA programs. After you find your home, return to your lender and start the process.

Nebraska’s first-time homebuyer program requirements

Nebraska house hunters must learn the eligibility requirements for the NIFA-run programs, including minimum credit score and income requirements. In the case of the First Home Targeted program, you must also find a home in a targeted area. If you are not a veteran or currently serving in the armed forces, the Military Home program isn’t for you.

The table below outlines the different program requirements to help you figure out your best fit.

Program name Credit score minimumDTI ratio maximumMaximum income limitHow long you have to live in home
First Home Program64050% (with a credit score of 660) or 45% (640 and above)$79,800 to $122,920*N/A
First Home Targeted Program64050% (with a 660 or above credit score) 45% (with 640 or above)$95,760 to $122,920 **N/A
Homebuyer Assistance Program64050% (with a credit score of 660) or 45% (640 and above)$71,800 to $122,920*N/A
First Home Grant64050% (with a credit score of 660) or 45% (640 and above)$24,650 to $57,950N/A
Military Home Program64050% (with a credit score of 660) or 45% (640 and above)$71,800 to $122,920*N/A

*Income limits based on family size and county/targeted vs. non-targeted areas. 
**Income limits based on family size and county/targeted area. 

Things you should know

Before you begin the application process for a first-time homebuyer program, it’s important to understand the median income limits in your buying area. If you earn more than allowed, you may not qualify for the program you want to use. You can check the most up-to-date Nebraska income limits by visiting the HUD website and entering your state and county information.

National first-time homebuyer programs

You can’t use the programs listed above unless you are approved for a mortgage. If you are concerned about affording one, even with assistance, some government-backed loan programs don’t require a down payment and have low interest rates. Nebraska’s first-time homebuyer programs can be used to help you cover your down payment, closing costs and other fees on these types of loans.

Conventional loans. If you want to use a conventional mortgage, it can be expensive and even difficult to obtain for a low- to middle-income first-time homebuyer. A government agency doesn’t back these mortgages, so they do allow for higher loan limits than other types of government-insured mortgages. If you are seeking a conventional mortgage (but need lower mortgage insurance premiums), you may consider the Fannie Mae HomeReady® and Freddie Mac Home Possible® programs if you are a first-time homebuyer.

FHA loans. Federal Housing Administration (FHA) loans are suitable for those borrowers with lower credit scores (some lenders will approve as low as 500) and higher debt ratios than conventional mortgage lenders allow. FHA may not be for you if you want a large mortgage, as the FHA loan limits are lower than what conventional lenders offer. You will be responsible for paying two types of FHA mortgage insurance, along with your monthly mortgage payment.

VA loans. These loans are strictly for military borrowers and their spouses from the U.S. Department of Veterans Affairs (VA). These guaranteed VA loans have no down payment requirement, no mortgage insurance and, best of all, no limit to the amount you can borrow.

USDA loans. If you are a low- to moderate-income homebuyer with eyes on rural living, check out a home loan backed by the U.S. Department of Agriculture (USDA). These loans do not ask for down payments, but you must buy in a USDA-specified rural area.

FAQs about Nebraska’s first-time homebuyer programs

Who qualifies as a first-time homebuyer in Nebraska?

A first-time homebuyer in Nebraska is someone who hasn’t owned a home in three years.

Can I qualify for down payment assistance in Nebraska?

If you meet the criteria for the programs above, such as income eligibility and credit scores, you may qualify for down payment assistance or a low-interest loan. If you qualify for the First Home Grant, it is important to note these funds are subject to availability.

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

It depends on the mortgage product you end up using. For example, using a VA or USDA loan means zero down payment required. The minimum FHA down payment requirement is 3.5%. Using the Homebuyers Assistance Program, your minimum investment could only be $1,000.

Home price trends in Nebraska major areas

In Lancaster County (Lincoln), the median home price was up 14.8% year-over-year in the fourth quarter of 2021, to $237,797, according to data from the National Association of Realtors. Because of the rise in home prices, the average monthly mortgage payment in the fourth quarter of 2021 rose to $912, up from $767 the year before. In Douglas County, home to state capital Omaha, home prices rose 15.7% to $231,908. The monthly mortgage payment rose to $889 from $742 a year earlier. In Sheridan County, a poorer part of the state, median home prices rose 14% year-over-year to $86,222, and monthly mortgage payments rose to $331 from $280 a year earlier.

 

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