The median price of a house in America is around $200,000, meaning the median down payment is approximately $40,000. These prices are prohibitive for low-income people hoping to own their first home.
If you live in Ohio and hope to buy your first home, there is good news for you; the state offers excellent support and incentives for homeownership through various programs aimed at helping low-income earners on their homeownership journey. This guide highlights programs you may want to take advantage of if you start your home ownership journey in Ohio.
OHFA Home Buyer Program
If you are a low or moderate-income earner seeking to buy a home, you can qualify for OHFA’s traditional first-time home buyers loans. This program is limited in terms of qualifications compared to a typical home, so it is easier to qualify for low-income earners.
The agency doesn’t offer the loans itself. Instead, it collaborates with participating lenders to provide 30-year fixed-rate mortgages for several loan types, which include conventional mortgage loans, FHA, USDA, and VA mortgages.
Your Choice of Down Payment Assistance
While you will still need to raise your down payment, you can receive some relief of 2.5 or 5% of the cost of your home from the Ohio Housing Finance Agency (OHFA). This assistance is not limited to paying your down payment.
This assistance from OHFA is forgivable after seven years as long as you do not sell or refinance your mortgage within the period.
Mortgage Tax Credit
The state of Ohio, through OHFA, offers tax credits of up to 40% in interest paid on your mortgage per year, capped at $2,000. This tax credit comes in addition to other mortgage tax credits you may qualify for to reduce your tax liability.
The amount of tax credit applicable to your mortgage interest depends on the program you are on. This benefit also applies to homebuyers that take loans not borrowed under OHFA.
You could enjoy discounted mortgage rates for your first home-buying journey under the Ohio Heroes program if you work in a sector that involves serving the community.
Occupations that qualify for the Ohio heroes program include veterans, active service members and their spouses, firefighters, police officers, paramedics and EMTs, health sector personnel, teachers, school administrators, and counselors.
Grants For Grads
If you have just graduated with an associate, bachelor, master, or doctorate degree and home ownership is your next goal, the grants for grads program is worth considering.
Under this program, qualifying borrowers get discounted rates on their mortgage loans and a 2.5 to 5% down payment assistance. The down payment assistance is forgivable after five years, but you will have to pay if you sell your home or move out of Ohio within five years.
The Port of Greater Cincinnati Development Authority offers the first community program. It offers down payment assistance grants at a rate of 3% to 5% of the price of the home.
Unlike OHFA’s down payment assistance, this grant does not restrict homeowners from selling and refilling their mortgage loans without penalties.
Other Home Financing Options
Not every home buyer will qualify for Ohio’s first-time homeownership programs. Luckily you do not have to qualify for the programs to become a homeowner. Many lenders also offer some incentives to first and repeat homeowners.
Available options include seeking a mortgage loan from a bank, leveraging your home equity if you are already a homeowner, 401k loans, IRA withdrawals, and other homeownership assistance programs offered by employers and lenders.
Owning a home is, to many, a significant milestone and seems like an unachievable dream by many yet to own one. But before you rule your home ownership dreams as unattainable, it is best to look into some of these programs, as highlighted in this post, to see which you will qualify for.