Are you considering buying your first home in Ohio? If you’re looking for first time home buyer Ohio programs, you’ve come to the right spot. Buying a home is a dream for most Americans, but it’s also one of the most expensive purchases you’ll probably ever make. That can make signing on that dotted line a scary undertaking. The good news is Ohio has programs that can help alleviate some of the stress and financial burden for first-time home buyers.
Better yet, you may qualify for these first time home buyer programs OH has if you’ve owned a home previously, as long as you haven’t had an ownership interest in your primary residence in the last three years. The state works with mortgage companies, lenders, and credit unions to offer first-time home buyers excellent home-buying options.
The Ohio Housing Finance Agency (OHFA) helps low and moderate-income borrowers obtain loans such as 30-year, fixed-rate conventional; Federal Housing Administration (FDA); Veterans Affairs; and U.S. Department of Agriculture Rural Development mortgages. The OHFA offers first-time buyers benefits that include lower mortgage rates, down payment assistance, tax credits, combined financing for buying and renovating a home, and conventional mortgage loans.
Additionally, active duty military members, along with veterans, reservists, police, firefighters, medical personnel, and educators, may be eligible for discounted mortgage rates.
Ohio First-Time Home Buyer Tax Credits & Down Payment Assistance in Ohio
For many first time home buyer Ohio individuals, the biggest hurdle is the down payment and closing costs that are required upfront. OHFA offers several assistance programs to help you get over that hurdle.
Your Choice! Down Payment Assistance
This program allows first time home buyer Ohio individuals to have OHFA assist them with either 2.5% or 5% of the home’s purchase price. It stands out as one of the best first time home buyer programs OH has because the assistance can be applied toward down payments, closing costs, or other pre-closing expenses. After seven years, the amount given is forgiven for first time home Buyer Ohio residents. However, if you sell your home before the seven years are up, you’ll need to repay all of the assistance you were given.
Ohio Heroes
This program is available to first time home buyer Ohio residents who serve the public, offering discounted mortgage interest rates. Qualifying public servants include veterans, active duty military, police officers, firefighters, physicians, nurse practitioners, and teachers. You can opt for Your Choice! down payment assistance as part of your Ohio Heroes loan.
Grants For Grads
If you’re looking for first time home buyer grants Ohio has to offer, a popular one is Grants for Grads. The Grants for Grads program provides a discounted mortgage interest rate to recent graduates that includes 2.5% or 5% down payment assistance. The assistance is forgiven after five years as long as you remain in the state of Ohio.
If you’re planning to sell your home and move out of Ohio in a couple of years, this isn’t the program for you. Before five years have passed, you’ll have to pay back the assistance provided. This isn’t available for everyone, but it’s also not limited to just last year’s graduates. If you’ve graduated in the last 48 months with an associate’s, bachelor’s, master’s, doctorate, or other post-graduate degree from an accredited college or university, you may be eligible.
Mortgage Tax Credit
To be eligible for many first time home buyer programs OH has, first-time homebuyers must have a tax liability. Homebuyers receive a direct, non-refundable federal tax credit on a portion of the mortgage interest paid, up to a $2,000 tax savings per year. The mortgage tax credit can also be used with the IRS home mortgage interest deduction. The program allows a tax credit of up to 40% of your annual mortgage interest paid and can be used annually for up to 30 years, provided the property is your primary residence.
For first-time home buyers using a non-OHFA mortgage, the tax credits range from 20% to 30%. You can couple your tax credit with down payment assistance of either 2.5% or 5% of the home’s purchase price.
OHFA Advantage
This program offers additional down payment and closing cost help in the form of a grant, which you don’t need to repay. The eligibility for this program includes relaxed income and purchase price limits. If your income is 80% or less of the median income in your county, a 0.5% grant is available. If it’s 50% or less, the grant increases to 2%. This program can be used only with a conventional mortgage. You can combine OHFA Advantage with the Your Choice! Down Payment Assistance program, but your mortgage rate will be slightly higher.
OHFA eligibility requirements
To qualify for any of the OHFA first time home buyer programs OH has, you must meet the following eligibility requirements:
- First-time homebuyer or haven’t had an ownership interest in your primary residence in the last three years
- Complete a free homebuyer education course after submitting a mortgage application
- Down payment assistance for first-time home buyers is forgiven after seven years unless the home is sold or refinanced during that time
- Meet purchase price limits and income limits, which vary by county and the number of people in a family
- Qualify for various payment assistance programs, which often require a low-to-moderate income and a credit score of 650 or higher
- Have a minimum credit score of 640 for conventional mortgages and USDA, VA, and FHA 203(k) home loans
- Have a minimum credit score of 660 for other FHA loans
- Meet debt-to-income requirements for the type of first time home buyer loan Ohio offers you
- Honorably discharged veterans are eligible for VA loans even if they aren’t first-time home buyers.
- Eligible property types for these programs include single-family homes, duplexes, triplexes, fourplexes, and condominiums.
First-Time Home Buyer Loans in Ohio
As a first-time home buyer in Ohio, you have several loan options to choose from. These loans are available through many different types of lenders, which may or may not be partners of OHFA. Here are the most common types of loans you can get in Ohio:
Conventional Loans
A conventional mortgage loan is available to you as a first-time home buyer through most banks and credit unions. If you don’t want a loan insured by the government, conventional is for you. The interest rate, down payment, and other requirements to qualify for a conventional mortgage loan are typically higher than other loan types. If your down payment is less than 20% of the purchase price, you will be required to pay private mortgage insurance (PMI) on your loan.
Your PMI can be canceled when you’ve paid 20% of the loan. This is a common fee people pay when using down payment assistance Ohio has to offer. Conventional mortgage loans are great options if you have excellent credit and money saved for a down payment.
FHA Loans
FHA loans are insured by The Federal Housing Administration (FHA) and are available through most mortgage lenders. The interest rates on FHA loans in Ohio are consistently lower than those for conventional loans, and you can qualify with a down payment as low as 3.5%. An FHA loan is a good choice if you have a small down payment, may use one of the down payment assistance programs Ohio has, or have a low credit score. FHA loans are probably the best choice for a first time home buyer in Ohio with bad credit.
VA Loans
VA loans are mortgages supported by the U.S. Department of Veterans Affairs (VA) and can be obtained through lenders such as banks and credit unions. Eligibility for a VA loan extends to veterans, active-duty service members, members of the National Guard or U.S. Army Reserves, and surviving spouses. VA loans are excellent options for qualifying first-time home buyers as they have a low APR, low closing costs, no PMI, and you don’t need a down payment to qualify.
USDA Loans
The U.S. Department of Agriculture (USDA) Single Family Direct Home Loans are available if you have a low-to-moderate income, you are in need of housing, and you want to buy a home in rural Ohio. For some USDA loans, you won’t even need to come up with a down payment. Depending on your income, your interest rate will typically be between 1% to 4.5%.
It’s important to note that government loan programs, such as FHA, VA, and USDA home loans, are for primary residences only. You can’t use these loans for a vacation home or investment property.
First-Time Home Buyer Programs in Cincinnati
The cost of living in Cincinnati can feel overwhelming, especially when buying a home. As a first-time homebuyer living in Cincinnati, you can find local assistance programs to help you buy your first home. Here are some of the first time homebuyer programs OH has available to you in Cincinnati or nearby cities:
The American Dream Down Payment Initiative (ADDI)
The American Dream Downpayment Initiative (ADDI) provides down payment assistance for first-time homebuyers with lower and middle incomes of up to $14,000. This downpayment initiative helps make homeownership more accessible for first-time home buyers and increases Cincinnati’s tax base. The ADDI funds are five-year non-interest-bearing deferred loan payments, and you must own the home for five years.
If you move, sell, or transfer ownership within the five-year residency requirement, you will have to pay back some or all of the funds. To be eligible for the ADDI first time home buyer programs OH offers, you must meet the following requirements:
- Must be first-time homebuyers (have not owned a home in the three years prior to purchase)
- Must purchase a home within the city of Cincinnati
- Must be used to purchase a single-family home, condominium, cooperative unit, or manufactured housing.
- Household income can’t exceed 80% of the city’s median income.
FHLB Cincinnati Welcome Home Program
The Federal Home Loan Bank of Cincinnati (FHLB Cincinnati) Welcome Home program offers down payment and closing cost assistance up to $25,000 in grants for veterans, active duty military members, active military, and surviving spouses of military personnel, as well as up to $20,000 for all other eligible homebuyers. This program isn’t only for first-time homebuyers. Eligibility requirements include:
- Household income is at or below 80 percent of the Mortgage Revenue Bond (MRB) limit for Cincinnati
- Must have at least $500 of your own funds to contribute towards the down payment/closing costs
- First-time homebuyers (who haven’t owned a home in the last three years) must complete a homebuyer counseling course
- The property will be your primary residence and a single family, townhome, condominium, duplex, multi-unit, or qualified manufactured home
- Qualifying may depend on the home’s purchase price, and there are purchase price limits based on income
The Port Communities First – Down Payment Assistance
The Port down payment assistance program provides first mortgage financing and down payment/closing cost assistance grants to eligible homebuyers to increase homeownership in the greater Cincinnati area. You don’t have to be a first-time homebuyer to qualify. They offer 3, 4, or 5% down payment assistance options. Eligibility requirements include:
- Must not exceed maximum income limits of 115% AMI in Hamilton County
- Have a minimum credit score of 620
- Purchase a single-family home, condominium, townhome, or duplex
- Make the property your principal residence within 60 days
Ohio First Time Home Buyer FAQs 
Are Ohio First Time Home Buyer Programs Worth it?
Yes. First-time buyer assistance programs allow you to buy a home when you otherwise wouldn’t be able to.
What Is an Ohio First Time Home Buyer’s Program?
A program that helps first-time home buyers with down payment and closing cost assistance, as well as offering tax credits so they can purchase a home.
Who Is Considered a First-Time Home Buyer in Ohio?
Anyone who has never owned a home before or hasn’t owned a home in the past three years.
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