First Time Home Buyer Programs in North Carolina

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The North Carolina Housing Finance Agency is a public agency that aims to create housing opportunities for North Carolinians. Through a range of assistance programs and initiatives, such as NC Home Advantage Mortgage, NC 1st Home Advantage Down Payment, and NC Home Advantage Tax Credit, the agency provides home buyers with stable mortgages and down payment help. Apart from the statewide programs, cities such as Charlotte, Raleigh, and Winston-Salem have their own homeownership assistance programs available to their citizens.

First-Time Home Buyer Eligibility Calculator

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Find out what programs you're eligible for
  • HomeReady Program: For general loans on single-units, the limit is $548,250. For high-cost area loans, the limit is $822,375.
  • HomePossible Program: The maximum mortgage amount for single-units ranges between $548,580 and $822,375.
  • FHA Loan: For single-family homes, the maximum mortgage amount in North Carolina is $420,680.
  • USDA Loan: USDA Loans do not have a maximum mortgage amount but since they are meant for low-middle income families, you should expect a loan for about $300,000 to $400,000.
North Carolina State Programs
NoProgramTypeJurisdiction
1NC Home Advantage Mortgage ProgramMain ProgramsNorth Carolina State
2NC 1st Home Advantage Down Payment
3NC Home Advantage Tax Credit
4Community Partners Loan Pool
5Self-Help Loan Pool
County-Specific Programs
3Greensboro Homebuyer Down Payment AssistanceLocal ProgramNorth Carolina State
4HouseCharlotte Program
5Raleigh Homebuyer Program
6Winston-Salem Home Ownership Assistance Program
Federal Programs
NoProgramTypeJurisdiction
IConventional MortgageFannie Mae and Freddie MacFederal
IIFHA LoanFederal Housing Administration
IIIVA LoanUS Department of Veterans Affairs
IVUSDA LoanU.S. Department of Agriculture

What You Should Know

  • North Carolina Housing Finance Agency provides assistance programs to help its residents cover the upfront costs of purchasing a house
  • The NC Home Advantage Mortgage Program can be combined with the NC 1st Home Advantage Down Payment and NC Home Advantage Tax Credit
  • The cities of Greensboro, Raleigh, Charlotte and Winston-Salem have their own established homeownership assistance programs

North Carolina State Programs

NC Home Advantage Mortgage Program

First-time and repeat home buyers can be eligible for the North Carolina Home Advantage Mortgage program. The program aims to make homeownership more affordable by offering eligible borrowers assistance with paying the upfront costs. Specifically, the NC Home Advantage Program offers 30-year fixed-rate mortgages combined with down payment assistance of up to 5% of the loan amount. This assistance becomes forgivable after the borrower has lived in the house for 10 years. It is forgiven at 20% every year thereafter.

Some borrowers who meet additional requirements may be able to combine the assistance from the Home Advantage Mortgage Program with additional assistance, such as the NC 1st Home Advantage Down Payment program or the NC Home Advantage Tax Credit, which will be discussed below.

Requirements for borrower

  • The borrower must be a legal U.S. resident
  • Income should not exceed $99,000
  • Credit score of at least 640
  • The borrower must meet the sale price limit for the type of loan they have applied for, be it either a conventional, FHA, VA, or USDA loan

Requirements for property

  • Eligible property types include new and previously owned single-family homes, townhouses, condominiums, duplexes, and new manufactured homes, for which a credit score of 660 is required
  • The borrower must occupy the property as a primary residence within 60 days of closing on the home

NC 1st Home Advantage Down Payment

If you are a first-time homebuyer or a military veteran and you already qualify for the NC Home Advantage Mortgage, then you may be eligible for an additional $8,000 in assistance funds provided by the 1st Home Advantage Down Payment Assistance.

Similar to the NC Home Advantage Mortgage, this assistance comes in the form of a 0% interest deferred second mortgage which becomes forgivable at a rate of 20% per year after 10 years. This means that the funds will be fully forgiven by the end of 15 years.

Requirements for borrower

  • Qualify for the NC Home Advantage Mortgage
  • Be a first-time homebuyer OR
  • Be a military veteran

NC Home Advantage Tax Credit

First-time home buyers and military veterans may be eligible to receive a tax credit up to $2,000 when they file their federal income taxes with a Mortgage Credit Certificate (MCC). Qualified applicants can save up to 30% on the interest they pay on their mortgage yearly if they bought an existing home and 50% if they purchased a newly built home, with a maximum of $2,000. This leaves borrowers with more money to put towards their mortgage payments.

To receive an MCC, you must apply and be approved by the NC Housing Finance Agency before you buy the home. You apply for the MCC and your mortgage at the same time and if approved, you receive your MCC once you are in your new home.

Example - How does an MCC work?

Imagine that you have a mortgage of $200,000 on an existing home and you pay 4% interest on it. How much would you be able to save on taxes?

Total Interest in Year 1 = $7,935.92

Tax Credit = 30% * $7,935.92 = $2,380.77

Since the tax credit exceeds the maximum of $2,000, you will only be able to get the limit of $2,000 tax credit. Keep in mind that you should still claim mortgage interest deduction on the rest of the interest.

Community Partners Loan Pool

Similar to other programs, the Community Partners Loan Pool (CPLP), available by the North Carolina Housing Finance Agency, provides homebuyers with down payment assistance. It comes as a 0% deferred second mortgage with no monthly payments. The funds come due when the borrower sells the home or at the end of the loan’s term. The maximum amount of the assistance funds is as follows:

  • Up to 20% of the sale price, but must not exceed $30,000 when combined with an NC Home Advantage Mortgage
  • Up to 10% of the purchase price if combined with a USDA Section 502 Loan

Requirements for borrower

  • A minimum credit score of 640
  • The total household income must not exceed 80% of the area median income of the county
  • The housing ratio must be between 25% to 32%
  • The total Debt-to-Income ratio may not exceed 43%
  • Proof of sufficient, stable income
  • Borrowers must contact CPLP to establish a homeownership readiness plan for education and counseling

Requirements for property

  • The sale price must not exceed the Sales Price Limit for the county
  • Eligible property types include newly constructed houses or existing homes in “like new” condition
  • If the borrower is purchasing a newly constructed home, they must receive a Certificate of Occupancy within 12 months of closing
  • The home must pass the required home inspections

Self-Help Loan Pool

The Self-Help Loan Pool program assists eligible borrowers by offering up to $35,000 in mortgage financing when purchasing a home built or rehabilitated by an SHLP Member. The assistance comes in the form of a 0% interest mortgage amortized over 20 to 33 years. The borrower applies through the self-help housing organization and makes their mortgage payments to the SHLP Member.

Requirements for borrower

  • The borrower must be a participant in a self-help housing program. For example, they may be helping with the construction or rehab of the house they are buying
  • The total household income must not exceed 80% of the area median income
  • The borrower must complete an approved homebuyer education course and at least two hours of one-on-one pre-purchase counseling

Requirements for property

  • Eligible property types include new or rehabilitated homes from an SHLP Member that do not exceed the maximum sales price limit for the county

Local Programs

Greensboro Homebuyer Down Payment Assistance

If you are a home buyer looking to purchase your first home in the city of Greensboro, then you may be eligible for down payment and closing costs assistance through the Greensboro Homebuyer Down Payment Assistance program. The program offers up to $10,000 in assistance funds in the form of a 0% interest, 5-year, forgivable loan. 20% of the loan becomes forgivable for every full year that you live in the home.

If you purchase a property in one of the city’s redevelopment areas, you can qualify for an additional $5,000 in funds. Moreover, this doesn’t have to be the first home you purchase.

Requirements for borrower

  • The borrower must be a first-time homebuyer or must have not owned a property for the last 3 years unless they are purchasing a property in one of the city’s redevelopment areas
  • Applicants must make a cash investment of at least $500
  • Household income must not exceed 120% of the area median income for households with a maximum of 2 people and 140% of the area median income for households with 3 or more people
  • Borrowers must complete an 8-hour, HUD-approved, in-person homebuyer education course
  • Applicants must secure a fixed-rate 15- or 30-year mortgage

HouseCharlotte Program

The HouseCharlotte Program, by DreamKey partner, provides eligible borrowers with 5 different down payment assistance loan options to choose from. The assistance funds, which come as forgivable loans with terms of 5, 10, or 15 years, can be used to make the down payment, pay for closing costs, or towards interest rate buy-down. The HouseCharlotte program provides assistance to Charlotte Community Heroes such as law enforcement officers, charter and pre-K-12th grade public school employees, paraprofessionals, firefighters, emergency medical technicians, healthcare workers, and other essential workers.

If you are not eligible for the Community Heroes Program, but you live within Charlotte City limits, then HouseCharlotte can still provide you with either:

  • Funding up to $10,000 for families with a household income at or below 80% of the area median income
  • Funding up to $10,000 for Public Service Employees with a household income at or below 80% AMI
  • Funding up to $7,500 for families with a household income above 80% AMI, up to 110% AMI
  • Funding up to $17,000 for families with a household income at or below 80% AMI purchasing in select high-cost neighborhoods

Requirements for borrower

  • Household income must not exceed 80% of the area’s median income. However, if your family’s household income is at 110% or less than the HUD’s area median income, you may still be eligible
  • Completed pre-purchase homebuyer education and counseling through a HUD-approved Housing Counseling Agency

Requirements for property

  • Property must be located within the City of Charlotte
  • The home must serve as borrower’s primary residence
  • The property price must not exceed $300,000 for new construction properties and $245,000 for existing properties

Raleigh Homebuyer Program

In efforts to make homeownership more affordable for its residents, the city of Raleigh provides assistance funds of up to $20,000 in the form of a loan. The amount is meant to help borrowers cover the down payment, closing costs, or any other gaps in financing. In order for the loan to be forgivable, the homeowner must live in the house for 20 years. It is also possible to combine the funds with other assistance programs.

Requirements for Borrower

  • Applicants must attend a Homeownership Class to earn a certificate and become eligible for the program
  • The borrower’s income must fall within the program’s set income limits
Household SizeIncome Limit
1-person$53,600
2-person$61,250
3-person$68,900
4-person$76,550
5-person$82,700
6-person$88,800
7-person$94,950
8-person$101,050

Winston-Salem Home Ownership Assistance Program

Through the homeownership assistance program of the City of Winston-Salem, eligible borrowers may qualify for assistance of up to $14,800 or 20% of the purchase price of the home, the lowest of the two. The assistance funds come in the form of a second mortgage, which is forgiven if the borrower lives in the house for 10 consecutive years.

Requirements for Borrower

  • Household income must not exceed 80% of the area median income
  • Household must not have assets that exceed $10,000
  • The primary mortgage must be a fixed-rate mortgage. This means that adjustable-rate mortgages and balloon mortgages do not qualify you for the program
  • The borrower must contribute at least $1,000 towards the purchase of the house
  • Complete homebuyer counseling through the Center for Homeownership

Requirements for Property

  • Property must be located in the City of Winston-Salem
  • Property must be up to code and free of the presence of lead-based paint hazards
  • Property must pass home inspections

Federal Programs

Conventional Mortgage

There are two types of conventional mortgages: conforming and jumbo loans. Conforming loans are conventional mortgages that follow the set of criteria and standards set by Fannie Mae and Freddie Mac. Jumbo loans, on the other hand, do not follow these standards. While conventional loans typically require 20% down payment, both of the government agencies buying conforming loans offer affordable housing programs with less strict requirements, targeted at low income earners.

Freddie Mac - HomePossible Program

  • Aimed at very low-to low-income earners
  • Minimum down payment of 3%
  • Minimum credit score of 660
  • No upfront mortgage insurance
  • Allows borrowers to use alternate sources of income

Fannie Mae - HomeReady Program

  • Minimum down payment of 3%
  • Minimum credit score of 620
  • No upfront mortgage insurance
  • Borrowers can include nontraditional sources of income

FHA Loans

FHA loans are non-conventional loans secured by the Federal Housing Administration, under the Department of Housing and Urban Development. Since non-conventional loans are secured by different government departments, if the borrower defaults on the loan, the lender will be paid back by the government. This makes it less risky for lenders to offer loans with lenient financial and creditworthiness requirements. FHA loans are offered as 15- or 30-year fixed- or adjustable-rate mortgages.

FHA Loan Requirements

  • Minimum credit score of 500 for a down payment of 10%
  • Minimum credit score of 580 for a down payment of 3.5%
  • DTI Ratio must not exceed 43%
  • The home must be the borrower’s primary residence
  • Borrowers are required to pay for upfront FHA MIP and annual variable MIP

VA Loans

VA loans are non-conventional loans, offered to veterans, military service members, or their spouses who fulfill the loan’s requirements. These loans are backed by the U.S. Department of Veterans Affairs. Compared to FHA loans, VA loans offer more lenient requirements for borrowers.

VA Loan Requirements

  • No minimum down payment required
  • No minimum credit score requirement
  • DTI Ratio must not exceed 41%
  • The home must be the borrower’s primary residence
  • No insurance required

USDA Loans

USDA loans are loans targeted at low-income earning individuals living in rural areas. Areas with a population of fewer than 20,000 people are considered rural areas. USDA loans are backed by the U.S. Department of Agriculture. They have no minimum down payment or credit score requirements.

USDA Loan Requirements

  • No minimum down payment required
  • No minimum credit score requirement
  • DTI Ratio must not exceed 41%
  • The home must be the borrower’s primary residence
  • The household income must not exceed 115% of the area’s median income
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