Buying a home for the first time is a significant achievement. However, affording the down payment, closing costs, and various other fees associated with homeownership can be a significant hurdle for many people.
With a median home price of $279,998, the Ohio real estate market is relatively affordable compared to the rest of the US. However, saving up to make the initial down payment can still be a struggle for a first time homebuyer in Ohio. Fortunately, the state of Ohio offers several excellent programs that can make your homeownership goals more attainable. So if you’re in the market to buy a home in the Buckeye State, here is a complete guide to first time home buyer programs in Ohio.
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First Time Homebuyer Ohio Tax Credits & Downpayment Assistance
Even if you can afford the monthly mortgage payment, there are other expenses you may need to worry about if you are a first time homebuyer in Ohio. The initial down payment and homeowners’ insurance can also be significant financial hurdles. If you are a first time homebuyer in Ohio, there are several programs available to you that can seriously reduce the upfront costs of buying a house or reduce your tax burden at the end of the year. Here are a few of the main first time home buyer programs in Ohio you should consider.
OHFA Downpayment Assistance | Ohio Housing Finance Agency First Time Homebuyer Program
The Ohio Housing Finance Agency (OFHA) offers a 30-year, fixed-rate loan designed for a low and moderate-income first time homebuyer in Ohio who needs help with a down payment or closing costs.
Borrowers seeking first time homebuyer down payment assistance in Ohio can opt for a loan of 3% of the home price for conventional loans or 3.5% for government-backed loans, including FHA, VA, and USDA loans. The assistance is forgiven after 7 years if you remain in the same home; however, it must be repaid if you sell the home.
To qualify for this first time homebuyer program in Ohio, you must meet the income requirements, which vary depending on the county. You must also meet the credit requirements, which are 640+ for conventional, USDA, and VA loans and 650+ for FHA loans in Ohio, and the appropriate debt-to-income ratio for your loan type.
Qualified homebuyers are also required to complete a home buyer education course. You can find other resources and information on this first time home buyer program in Ohio by visiting the OHFA website.
Mortgage Tax Credit for First Time Home Buyers in Ohio
The OHFA also offers a first time home buyer tax credit in Ohio for eligible borrowers. It provides first time home owners in Ohio with a direct federal tax credit on a portion of the mortgage interest paid, which could result in up to $2,000 in annual savings. The credit is in addition to the IRS home mortgage interest deduction and is only available to a first time homebuyer in Ohio with a tax liability.
Borrowers getting home loans in Ohio through the OHFA’s MTC Plus Program will receive a tax credit of 40% of their home mortgage interest, up to $2,000 per year. It may result in a slightly higher interest rate, but the Ohio first time homebuyer tax credit can also be used in conjunction with the OHFA down payment assistance program.
The first time homebuyer tax credit in Ohio can also be used with a home loan that isn’t provided by the OHFA, although the tax credit is only good for 20% of mortgage interest in target areas and 15% for all other properties.
First Time Home Buyer Loans In Ohio
Ohio first time homebuyer down payment assistance and mortgage interest credits can help with some of the costs associated with owning a home. However, by far the largest expense of owning a home is the mortgage and associated payments. There are several loan products and programs available to Ohio first time homebuyers that can result in major savings over the life of the loan. Here are some of the main products and programs available.
OFHA Homebuyer Program | A Statewide Program for a First Time Homebuyer in Ohio
The Ohio FHA mortgage is an affordable 30-year fixed-rate loan, available in a range of options including FHA, VA, USDA, and conventional mortgages. It features generous income and purchase price limits designed specifically for a low and moderate-income first time homebuyer in Ohio.
To qualify for this first home buyer program in Ohio, you must meet the following criteria:
- You are a first time homebuyer in Ohio who has not owned your primary residence in the last three years.
- You are a first time homebuyer in Ohio who is an honorably discharged veteran.
- You are a first time homebuyer in Ohio purchasing a home in a target area.
A first time homebuyer in Ohio must meet the credit requirements for the type of FHA loan in Ohio that they are using, which include a credit score of 640 or higher for conventional, USDA, and VA loans, or 650 or higher for FHA loans. They must also meet the debt-to-income ratio requirements for the type of loan they are applying for, as well as the income and purchase price limits for their county. In addition to the FHA loan, there are several other first time home buyer grants in Ohio that borrowers may qualify for.
Ohio Heroes | An Employment-Based Program For a First Time Homebuyer in Ohio
A first time homebuyer in Ohio in a certain profession may qualify for discounted mortgage interest rates when using an Ohio FHA loan. To qualify, a first time homebuyer in Ohio must be employed in one of the following careers:
- Veterans
- Active duty military
- Members of reserve components (and surviving spouses)
- Police officers
- Firefighters (including volunteers)
- EMTs & paramedics
- Physicians, nurses, and nurse practitioners
- Teachers (pre-K through 12), counselors, and school administrators
The Ohio Heroes credit can also be combined with any other Ohio first time homebuyer grant, such as the Down Payment Assistance Program.
Grants for Grads | An Education-Based Program for a First Time Homebuyer in Ohio
In addition to the Ohio Heroes program, the state offers a program for a first time homebuyer who is a recent college graduate, known as the Grants for Grads program. It offers discounted mortgage interest rates and down payment assistance (3% of conventional loans and 3.5% for government loans) for qualifying students. The down payment assistance can be forgiven after 5 years, as long as you remain in the state of Ohio.
A first time homebuyer in Ohio must meet all the standard credit, income, and debt ratio requirements as the other OHFA programs. To qualify, borrowers must have graduated with an associate’s, bachelor’s, master’s, or other post-graduate degree from an accredited college or university within the last 18 months.
Local First Time Home Buyer Programs In Ohio
The OHFA offers first time home buyer programs in Ohio for all residents of the state, although there are also several local programs available at the city and county level that offer different options or additional support. Here are a few of the most popular programs for a first time homebuyer in Ohio.
First Time Home Buyer Programs In Columbus Ohio
The American Dream Initiative is a first time homebuyer program in Columbus, Ohio, that provides eligible borrowers with up to $14,999 in assistance for a down payment or closing costs. To qualify, a first time homebuyer in Ohio must be purchasing a primary residence within the Columbus City limits.
They must meet the lender’s credit and income requirements and complete a first time homebuyer education course in Ohio. Their household income must also be at or below 120% of the area’s median income, and they must be able to contribute at least $500 toward the home purchase.
First Time Home Buyer Programs In Cincinnati Ohio
Cincinnati also has its own American Dream Downpayment Initiative that is very similar to the program in Columbus. Borrowers moving to Cincinnati may qualify for up to $ 14,000 in down payment and closing cost assistance for a first time homebuyer program in Ohio.
For every year you live in the home, a portion of the loan is forgiven, and after 5 years, it’s completely forgiven. To qualify, the first time homebuyer in Ohio must be purchasing a home within the Cincinnati city limits and have a median household income that is at or below the average median income in Cincinnati.
First Time Homebuyer Programs In Cleveland, Ohio
Cuyahoga County also has its own Ohio first time homebuyer program that is available to residents of Cleveland. Borrowers in the entire county may qualify for up to $ 14,900 or 10% of the home’s purchase price in down payment assistance.
However, the loan is not forgivable and must be repaid when you sell the home. To qualify, the first time homebuyer in Ohio must be purchasing a home in an eligible community in Cuyahoga County (which includes Cleveland), and household income must be at or below 80% of the AMI.
Who Qualifies for Down Payment Assistance in Ohio?
Any first time homebuyer in Ohio who meets the credit and income requirements for their specific county and the type of loan they plan to use may qualify for down payment assistance through the OHFA. They have an eligibility questionnaire on their website, where you can determine if you qualify.
How Much Of a Down Payment Is Required for First Time Home Buyers In Ohio?
Down payment requirements range from 3.5% to 20% depending on the type of home loan you use. The median home price in Ohio is $279,998, which means down payments typically range from $9800 to $56,000. However, downpayment assistance programs can help reduce this number, and certain government-backed loans (such as VA and USDA loans), are available for 0% down.
What Is the Best Loan for First Time Home Buyers In Ohio?
The OHFA mortgage is a great option for a first time homebuyer in Ohio, as it can be borrowed as a conventional, FHA, VA, or USDA loan. However, which option you choose depends on your individual qualifications and financial goals.
Thinking About Moving to Ohio?
Now that you know about all the best programs for a first time homebuyer in Ohio, you’re ready to make a purchase. After you get through the closing and you’re ready to move in, you can trust the dedicated Columbus movers to make your moving day easy and efficient. Call (614) 892-9046 today for a free quote.
