Considering buying a home in Ohio? If you’re a first time home buyer, you can qualify for special loans, down payment assistance, and tax credits that can save you thousands and make it easier to finally buy a home of your own. Here’s an in-depth guide to the best first time home buyer programs in OH and how to qualify.
First Time Home Buyer Tax Credits & Down Payment Assistance in Ohio
Tax credits and first time home buyer grants in Ohio can be incredibly valuable and give you thousands toward the purchase of your first home. The Ohio first time home buyer tax credit alone can save you up to $2,000 per year, every year! Here are the best programs to explore.
Ohio Mortgage Tax Credit | Ohio Housing Finance Agency
The Mortgage Tax Credit offers long-term savings and it’s one of the best first time home buyer programs in Ohio. The program gives you a direct tax credit for a share of the mortgage interest you pay every year although the credit can’t be larger than your annual federal income tax bill after exemptions, deductions, and any other credits.
The size of the credit depends on the property, where you buy a home, and the type of mortgage you get. Through OHFA’s First-Time Homebuyer program, for example, the tax credit with the loan is 40% of the mortgage interest you pay up to $2,000 per year. It can even be combined with 2.5% down payment assistance!
If you use a different loan option through another lender, the tax credit is 30% (bank-owned property), 25% (target area), and 20% (all other homes).
You may qualify if you meet income, purchase price, and credit score requirements and you have not owned a home in the last three years.
YourChoice! Down Payment Assistance | Ohio Housing Finance Agency
When you get a mortgage through OHFA, you can qualify for down payment assistance in Ohio of 2.5% or 5% of the purchase price which can be used toward closing costs or your down payment. You don’t need to repay the grant unless you refinance or sell your home within 7 years.
To qualify, you need to meet income, credit score, and purchase price limits. You must also complete a free homebuyer education program through a HUD-approved counseling agency in Ohio.
Ohio Grants for Grads | Ohio Housing Finance Agency
Have you recently graduated from school and you’re ready to buy your first home? There’s a first time home buyer program in Ohio specifically for you! The Grants for Grads program offers a 30-year mortgage with a discounted mortgage rate as well as 2.5% or 5% down payment assistance. As long as you stay in Ohio, the down payment assistance is forgiven in 5 years.
To qualify, you must be a first time home buyer in Ohio who graduated within the last 48 months with a degree from an accredited school.
Good Neighbor Next Door Program | Department of Housing and Urban Development (HUD)
While not specifically designed for first-time buyers, the Good Neighbor Next Door program through HUD is popular with first-time homebuyers in Ohio with low to moderate income.
This first time home buyer program in Ohio for first responders and teachers offers a 50% discount on the list price of homes in revitalization areas. Single-family homes are listed exclusively through the program for 7 days.
Eligible careers include:
- Law enforcement officers
- Teachers (pre-K through 12th)
The program does require a “silent” second mortgage for the discount amount with no payments or interest required as long as you live in the home for at least three years.
First Time Home Buyer Loans in Ohio
Down payment assistance is great, but what about the mortgage itself? Here are some of the best programs available with discounted mortgage rates and looser lending standards that can help you qualify for a home loan as a first time buyer.
First-Time Home Buyer Loans | Ohio Housing Finance Agency
The OHFA makes it easier to buy the home of your dreams as a first time homebuyer in Ohio. The agency partners with banks and credit unions to provide a first time home buyer loan in Ohio. You can qualify for a fixed-rate 30-year mortgage with purchase price limits and income guidelines designed for first-time buyers with a low or moderate income. You can qualify for a 30-year FHA, USDA, VA, or conventional loan and combine it with other OHFA programs such as down payment assistance or a mortgage tax credit.
OHFA does not make loans; to qualify, you’ll need to apply through an OHFA-approved lender.
Ohio Heroes Loan | Ohio Housing Finance Agency
If you’re a qualifying veteran or public servant, OHFA offers a unique first time home buyer loan in Ohio called the Heroes Loan. Not just restricted to first-time buyers, the program offers discounted mortgage rates for people in any of the following careers:
- Teachers, counselors, and school administrators
- Police officers, EMTs, paramedics, firefighters (paid and volunteer)
- Veterans, active duty members, Reserve members, and surviving spouses
- Physicians, RNs, LPNs, nurse practitioners, and STNAs
This loan program can even be combined with down payment assistance!
Federal First-Time Buyer Home Loans
Along with these Ohio first time home buyer programs, you may consider national loans for first-time buyers.
- Department of Veterans Affairs (VA) loans are offered to veterans and military members. These loans have no private mortgage insurance, low capped closing costs, and no requirement for a down payment.
- Federal Housing Administration (FHA) loans require just 3.5% down to buy a home.
- U.S. Department of Agriculture (USDA) loans do not require down payments. The home must be in a qualifying semi-rural or rural area.
- Home Possible from Freddie Mac is a conventional loan program requiring just 3% down.
- HomeReady from Fannie Mae is another conventional mortgage program that requires a 3% down payment.
First Time Home Buyer Programs in Cincinnati
Planning to buy a home in Cincinnati or surrounding suburbs? There are tons of local first time home buyer programs in Cincinnati and Hamilton County, OH.
American Dream Down Payment Initiative (ADDI) | City of Cincinnati
You can apply for ADDI funds on a first-come, first-serve basis as long as you have been pre-qualified for a home loan and have adjusted gross income of 80% or lower than the median in Cincinnati. The ADDI program offers funds that can be used toward closing costs and your down payment. Maximum assistance is 5% of the home’s purchase price up to $5,000.
ADDI loans are deferred over 5 years. 20% of the loan is forgiven every year you remain in the home and you never need to make payments toward the loan.
The Port of Cincinnati offers the Communities First Ohio Down Payment Assistance program to provide first mortgages and down payment assistance in Ohio. The program is unique because there aren’t restrictions on refinancing or selling your home with the flexibility of choosing 3%, 4% or 5% down payment assistance to keep your interest rates low. The Port offers the program in partnership with 80 lenders in Ohio.
To qualify for the program, you need to apply through a participating lender and meet standard debt-to-income, credit score, and income guidelines.
Welcome Home Program | FHLB Cincinnati
The Federal Home Loan Bank of Cincinnati (FHLB) offers first time home buyer grants in Ohio of up to $5,000 (or $7,500 for veterans, surviving spouses, and active duty military members) through their Welcome Home Program. To qualify, you must get a mortgage through one of their Member institutions. You must also be at or below 80% of the Mortgage Revenue Bond (MRB) limit for the county and contribute at least $500 of your own money toward the down payment or closing costs.
Funds become available starting in March and tend to run out very quickly.
Note: you don’t need to buy a home in Cincinnati to qualify! FHLB Cincinnati has partners across Ohio including major cities like Akron and Columbus.
Ohio First Time Home Buyer FAQs
Are first time home buyer programs worth it?
Absolutely! You can get up to 5% of the purchase price of your home in down payment assistance, a valuable tax credit, or a discounted mortgage rate as a qualifying first time buyer in Ohio.
Do you have to pay back down payment assistance in STATE?
Most first time home buyer programs in Ohio with down payment assistance require that you live in your home for a certain amount of time at which point the assistance is forgiven.
Who is considered a first time home buyer in STATE?
With most programs, you are considered a first time home buyer if you have not owned a home in the last three years. You may also qualify as a displaced homemaker or single parent.
As a first-time home buyer in Ohio, there are tons of resources to help you afford your first home. From down payment assistance and mortgage tax credits to low interest mortgages, you will likely find a great program you qualify for as you prepare to buy a home of your own and many can even be combined!
Once you’re ready to close on your new home, turn to the moving experts at Bell Moving & Storage to handle the heavy lifting on moving day!