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Ohio First-Time Homebuyer Programs

Owning your own home is a hallmark of the American dream. Yet, the truth is financial problems, lack of savings and lower credit scores can sometimes stand in the way of that important milestone.

If you’re an aspiring first-time homebuyer in the state of Ohio, you may be in luck. Your state offers some great programs that could help you reach your goal of homeownership, even without perfect credit and a big down payment.

In January 2019, we researched first-time homebuyer assistance programs in Ohio. This involved a review of the Ohio Housing Finance Agency website and other state resources. Here’s what you need to know.

In this guide, we will cover:

Ohio first-time homebuyer programs

If you’re searching for first-time homebuyer programs in Ohio, the Ohio Housing Finance Agency (OHFA), should be your first stop. OHFA is the state’s affordable housing organization, and as such, the agency offers affordable loan options designed with first-time homebuyers in mind. Most piggyback on conventional, USDA, VA and FHA loan products.

Eligibility for Ohio Housing Finance Agency assistance

You will need to meet one of the following three general eligibility requirements in order to qualify for an OHFA homebuyer program.

  • You have not had an ownership interest in your primary residence in the last three years.
  • You are a veteran with an honorable discharge.
  • You are purchasing a home located in a target area (a federally designated area that is economically distressed).

In addition to satisfying one of those three requirements, OHFA borrowers also are required to meet each of the following criteria. Borrowers must:

  • Complete a free homebuyer education course prior to closing
  • Meet OHFA income limits, which vary by county but generally fall between $82,000 and $110,000 (income limits are higher in target areas)
  • Buy a property that does not exceed OHFA purchase price limits, which also vary by county but generally fall between $271,000 and $388,000 (purchase limits are higher in target areas)
  • Meet debt-to-income ratios for your specific loan type
  • Maintain a credit score of at least 640 for most loan types or 660 for FHA loans
  • Buy a property smaller than two acres (in a city or town) or five acres (outside municipal corporation)
  • Buy an existing home, newly built spec home or modular home

Note: You can check current mortgage rates for Ohio here.

Your Choice! down payment assistance

Features

  • Receive either 2.5% or 5% of the home’s purchase price in assistance
  • Assistance funds may be used toward down payment costs, closing costs or other pre-closing expenses
  • Assistance funds are forgiven after a period of seven years
  • Only repay the funds if you sell or refinance your home prior to seven years from the initial purchase

Eligibility

  • Borrowers must satisfy all general eligibility requirements listed above.

How it works

If you’re a first-time homebuyer who needs help coming up with a down payment and closing costs to purchase a home, the Your Choice! program might be a great fit. To apply, you can search for an OHFA-approved lender in your area or call OHFA directly at 888-362-6432.

OHFA Advantage

Features

  • $1,500 or $2,500 down payment and closing cost assistance grant, depending on income
  • May be used in addition to Your Choice! down payment assistance program

Eligibility

  • Satisfy all general eligibility requirements
  • Can only be applied toward conventional loans
  • Income must fall within 50% ($2,500 in assistance funds) to 80% percent ($1,500 in assistance funds) of the area median income in the county where you intend to purchase the property

How it works

If you’re a homebuyer (first-time or otherwise) who needs down payment and closing costs assistance, the OHFA Advantage grant could make a world of difference in your ability to close on a mortgage. Ask your OHFA-approved lender if you are eligible for the program or call OHFA directly for assistance at 888-362-6432.

Ohio Heroes

Features

  • Discounted mortgage interest rates
  • Available to eligible first-time homebuyers and repeat homebuyers who serve their communities
  • You may choose to use one of the above down payment assistance programs along with your Ohio Heroes loan

Eligibility

  • Satisfy all general eligibility requirements, except requirements associated with being a first-time buyer, honorably discharged veteran or target area purchase restrictions
  • Work in one of the following fields:
    • Teachers (pre-K — 12th grade), administrators and counselors
    • Police officers, firefighters, volunteer firefighters, EMTs and paramedics
    • Veterans, active duty military members and members of reserve components (surviving spouses included)
    • Physicians, nurse practitioners, nurses (RN and LPN) and STNAs

How it works

If you’re an Ohio resident who serves your community, you might qualify for a discounted mortgage interest rate through the Ohio Heroes program. You can get a better idea if you may be eligible by completing this online eligibility questionnaire.

From there, OHFA offers additional information about what to expect and how to find an OHFA-approved lender in your area on its website.

Grants for Grads

Features

  • Mortgage interest rate discount for recent graduates
  • 2.5% or 5% in down payment assistance
  • Assistance funds are forgiven after five years (at a rate of 20% of the assistance forgiven per year)
  • Only repay assistance funds if you sell or refinance your home before you’ve lived in the home for five years

Eligibility

  • Satisfy all general eligibility requirements (above)
  • Must have earned an associate, bachelor’s, master’s or doctorate degree within the last 48 months from an accredited school recognized by the U.S. Department of Education

How it works

To begin the application process, simply contact an OHFA-approved lender. You can also call OHFA directly at 888-362-6432.

Mortgage tax credit

Features

  • Lowers your tax liability by up to 40%, with a maximum tax credit of $2,000
  • Can be used in addition to IRS home mortgage interest deduction
  • Tax credit may be eligible to be reissued (with a $55 reissuance fee) if you refinance your mortgage

Eligibility

  • Satisfy all general eligibility requirements (above)
  • Cannot be used with the RenovateOhio FHA 203(k) loan

How it works

OHFA’s mortgage tax credit might save you up to $2,000 per year on your federal income tax liability. However, the tax credit you receive cannot exceed your federal income tax liability after deductions, exemptions and other credits.

Here’s how it’s calculated. If you have a loan through an Ohio first-time homebuyer program, you can claim 40% of the mortgage interest you pay per year as a tax credit. Other loans are eligible for a credit at a lower rate — 30% for a foreclosure, 25% for a property bought in a target area and 20% for all others.

To see if you are eligible, ask your OHFA-approved lender for more information.

RenovateOhio

Features

  • Ohio’s version of an FHA 203(k) loan allows eligible buyers to combine mortgage loan and repair costs into a single, fixed-rate mortgage
  • Total mortgage amount is based upon projected property value after completion of repairs
  • Available to first-time homebuyers and non-first-time homebuyers

Eligibility

  • Satisfy all general eligibility requirements (above), except requirements associated with being a first-time buyer, honorably discharged veteran or target area purchase restrictions
  • Property must be completed for at least one year and be a one- to four-family home

How it works

If you’re in the market for a fixer-upper, the RenovateOhio loan might help you to turn your dream into reality. It can make the renovation process easier and more affordable for eligible buyers purchasing existing homes in need of repair.

Begin by searching for an OHFA-approved lender in your area or call OHFA directly at 888-362-6432 to request more information.

National first-time homebuyer programs

With the wide variety of first-time homebuyer programs available to Ohioans, purchasing a home may be more attainable than you thought. Plus, in addition to the great state-offered programs, you may be able to qualify for federal programs, too.

Here’s a guide from LendingTree on federal first-time homebuyer programs that may help.

 

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