Ohio First-Time Home Buyer Assistance Programs
If you’re looking to buy a home in Ohio – anywhere from Cleveland on the shores of Lake Erie to Cincinnati on the Ohio River – there are programs that can help you out. Ohio home buyers assistance programs can help If you need a loan to make a down payment, an affordable mortgage, or a hand with closing costs.
Key Takeaways:
- The Ohio Housing Finance Agency offers statewide loan and down payment assistance programs and mortgage credit certificates.
- Recent college graduates and people working public service jobs may qualify for a mortgage with a discounted interest rate.
- Local governments at the county and state level also offer assistance programs for home buyers.
Ohio Housing Finance Agency First-Time Home Buyer Loans
The Ohio Housing Finance Agency offers mortgages in partnership with lenders, credit unions, and mortgage companies across the state. The agency’s first-time home buyer loan program helps low- and moderate-income borrowers get a conventional, Federal Housing Administration, Veterans Affairs or U.S. Department of Agriculture loan that can be combined with the agency’s down payment assistance programs and mortgage credit certificate program.
Borrowers must meet at least one of these criteria:
- They must have had no ownership interest in their primary residence over the previous three years.
- Be an honorably discharged veteran of the United States military.
- Buy a home in a designated or economically distressed area.
Borrowers need to meet the following financial requirements:
- Income and purchase price limits for the county they are buying in.
- Debt-to-income ratio requirements for the loan they’re applying for.
- A minimum credit score of 640 for conventional, USDA, and VA loans and 650 for FHA loans.
- The home must not exceed the maximum purchase price.
- You must complete a free home buyer education program approved by the U.S. Department of Housing and Urban Development.
OHFA does not directly make home loans. Borrowers need to apply through an OHFA-approved lender.
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Ohio Housing Finance Agency Next Home Loans
The Next Home program offers 30-year, fixed-rate mortgages to borrowers who are not first-time buyers. Next Home provides conventional, FHA, VA, or USDA loans, each of which can be paired with Your Choice! down payment assistance of 2.5% of the purchase price.
Borrowers must:
- Meet income and purchase price limits.
- Meet DTI ratio requirements for their loan type.
- Have a minimum credit score of 640 for conventional, USDA and VA loans, and 650 for FHA loans.
- Live in the home as their primary residence.
- Occupy the home within 60 days of closing.
- Qualified buyers must complete a free HUD-approved home buyer education program.
Apply for a Next Home loan through an OHFA-approved lender.
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Ohio Heroes Home Loans
The Ohio Heroes program offers conventional, FHA, VA and USDA loans with interest rates discounted 0.25% to borrowers who work in public service occupations. The loans can be combined with the OHFA’s down payment assistance programs, and the program is open to first-time and repeat buyers who qualify for the Next Home program.
Borrowers must work in one of the following jobs:
- Active-duty military service member, including military reserves.
- Military veteran or the surviving spouse of one.
- Police officer.
- Firefighter, including volunteers.
- Emergency medical technician.
- Paramedic.
- Physician.
- Nurse, nurse practitioner, or State Tested Nurse Aides.
- Pre-K through 12th-grade teacher, administrator, or counselor.
Borrowers also need to meet the following financial requirements:
- Income limits for the county.
- DTI ratio requirements for their chosen loan type.
- Have a minimum credit score of 640 for conventional, USDA, and VA loans, and 650 for FHA loans.
- The home you’re buying must not exceed the maximum purchase price.
- Qualified buyers must complete a free HUD-approved home buyer education program.
Applicants must apply with an OHFA-approved lender.
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Your Choice! Down Payment Assistance
The Your Choice! Down Payment Assistance Program offers borrowers a deferred-payment loan equal to 2.5% or 5% of the home’s purchase price. The loan may be used for the down payment, closing costs, and other pre-closing expenses.
The loan is forgiven if you live in the home for seven years. If you sell your home before then, you must repay the full amount of the loan.
Borrowers must:
- Meet DTI ratio requirements for their loan type.
- Have a minimum credit score of 640 for conventional, USDA, and VA loans, and 650 for FHA loans.
- Meet income and purchase price limits for the county you’re buying in. Limits vary. For example, one- or two-person families must have incomes of $108,720 or less in Adams County but may have incomes as high as $121,320 in Delaware County.
- Qualified buyers must complete a free HUD-approved home buyer education program.
You can apply for this down payment assistance while working with an OHFA-approved lender on your mortgage application.
Grants For Grads
Grants for Grads is designed to encourage recent college graduates to buy homes and work in Ohio.
It offers recent college graduates primary loans with an interest rate discounted 0.125% and paired with deferred-payment loans equal to 2.5% or 5% of the purchase price. The second loan can be used for a down payment or closing costs and is forgiven after you live in the home for five years. If you sell your home or move out of the state before then, you must repay some or all of the provided assistance.
To be eligible, borrowers must:
- Have graduated with an associate’s, bachelor’s, master’s, doctorate, or other post-graduate degree in the past 48 months.
- Have had no ownership interest in their primary residence over the previous three years.
- Meet DTI ratio requirements for the chosen loan type
- Have a minimum credit score of 640 for conventional, USDA, and VA loans, and 650 for FHA loans.
- Meet the income and purchase price limits for the county they are buying in.
- Complete a free home buyer education course.
If you qualify, you can apply for this form of down payment assistance while working with an OHFA-approved lender.
Communities First Down Payment Assistance
Communities First Down Payment Assistance offers grants to use for the upfront costs of buying a home. It can be used with government-backed and conventional loans. While you have to meet income requirements, there are no DTI ratio restrictions and no limits on how long you have to live in or own the home.
To be eligible, borrowers must:
- Meet standard industry lending guidelines.
- Not exceed income limits for the chosen loan type and county where the home is located.
- Have a FICO score of 620 or higher.
- Live in the home as a principal residence within 60 days of purchase.
- Manufactured homes, rentals, vacation homes, co-ops, and investment homes are ineligible.
If you qualify, you can apply for this down payment assistance while getting a loan from one of the program’s participating lenders.
Local Down Payment Assistance Programs
Many local governments in Ohio also have down payment assistance programs. Check with local county and city governments to find any additional local programs.
| Area | Program | Description |
|---|---|---|
| Columbus | American Dream Down Payment Initiative | Deferred, forgivable loans of up to $14,999 to cover down payment and closing costs. |
| Cuyahoga County | Cuyahoga County Down Payment Assistance Program | Deferred, forgivable loans up to the lesser of 10% of the purchase price or $14,900. |
| Cincinnati | American Dream Down Payment Assistance Initiative | Deferred, forgivable loans of $10,000, $12,000, or $14,000 to cover down payment and closing costs. |
| Toledo | Home at Last | Grants of Up to $7,500 ($9,500 in target neighborhoods) for low-income home buyers. |
| Summit County | First Home First Loan Down Payment Assistance | Deferred loans up to $12,000 that match home buyer down payments 3:1. |
Mortgage Tax Credit Certificate Program
OHFA’s mortgage tax credit certificate offers borrowers a federal tax credit for a percentage of the mortgage interest they pay up to a maximum of $2,000 per year. The credit is not refundable and is in addition to the mortgage interest tax deduction.
OHFA offers a mortgage tax credit plus program, which includes an FHA, VA, USDA or conventional loan – with or without down payment assistance – and a certificate offering a tax credit equal to 40% of your mortgage interest up to $2,000, in exchange for a slightly higher interest rate.
The mortgage tax credit basic program is for loans that aren’t secured through OHFA. It offers a certificate good for a tax credit of 30% for buying a bank-owned property, 25% for buying a home in a target area, and 20% for all other types of homes.
To be eligible, borrowers must choose a lender that participates in this program and meet these requirements:
- Income and purchase price limits.
- DTI ratio requirements for the chosen loan type
- Have a minimum credit score of 640 for conventional, USDA, and VA loans, and 650 for FHA loans.
- Live in the home as a primary residence
- Occupy the home within 60 days of closing
You can apply for this program with an OHFA-approved lender.
Ohio Housing Finance Agency Refinance Loans
Homeowners with an OHFA loan with Your Choice! down payment assistance that has not been forgiven may refinance to lower their mortgage interest rate and reduce their monthly payment. This program is only available to borrowers with an OHFA loan that includes a down payment assistance second mortgage with a term of seven years that OHFA will not otherwise re-subordinate. Grants for Grads loans are not eligible.
FAQ
Here are answers to common questions about home buying assistance programs in Ohio.
Down payment programs usually are meant to help people afford closing costs and a down payment on a home. However, these programs also can free up money for other uses. Even if you can afford a down payment now, consider using these programs to free up cash for other uses.
Where can I get down payment assistance?
Down payment assistance programs usually come from government and nonprofit organizations. If you know where you want to buy a home, check with local nonprofit groups, and the city and country government to see what programs are available.
How much is a typical down payment in Ohio?
In Ohio, the median home price is $227,800. Assuming a down payment of 3.5%, the minimum for an FHA loan, the median buyer will need $7,973 to make a down payment. A 20% down payment would require $45,560.
The Bottom Line
If you’re looking to buy a home in Ohio, whether it’s your first home or your next home, it’s worth checking out statewide and local buyer assistance programs. These programs offer affordable mortgages, sometimes with reduced interest rates, as well as deferred-payment loans that, in most cases, are forgivable. If you qualify, you may be closer than you think to owning a home in Ohio.
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