First time home buyers in the state of Louisiana have some own unique opportunities, especially in areas still recovering from Hurricane Katrina. With so many vacant homes in the state, government entities at both the state and local level are doing what they can to make as many of these homes available to first time home buyers as possible. That includes three loan programs and a down payment assistance program open to nearly all first time home buyers who meet certain guidelines. Funds are limited and the state's Housing Agency wants residents to know that they are dispersed on a first-come, first-served basis.
Louisiana Housing Finance Agency
The Louisiana Housing Finance Agency (LHFA) is the state government entity charged with making sure safe and affordable housing is available to all Louisiana residents. The agency has at its disposal three separate loan programs, a down payment assistance program, and several other grants and programs on an occasional basis. All of these programs are subject to their own terms and conditions which home buyers must meet. Your real estate agent and mortgage broker will be familiar with the requirements.
MRB Assistance Program
Louisiana's MRB Assistance Program is a down payment and closing cost program which provides assistance of up to 3% of the total mortgage loan amount to be applied to closing costs or down payment. This program can be used in conjunction with standard FHA, VA, or RF loans, or can be combined with two of the three state-sponsored mortgage loan programs. Qualified applicants will have an annual income which does not exceed 115% of the median income in the parish where they are buying the property. If the property is in a targeted area income can be as high as 140% of the median. This program is provided in the form of a 30-year loan with an interest rate of 4.99%.
HOME Program with MRB
The HOME Program with MRB is a combination low interest mortgage loan and down payment assistance program. This combination deal is available to first time home buyers with an annual income not exceeding 80% of the median income in the parish where they are purchasing their home. The mortgage portion of the program provides a low-cost loan with terms of 2.95% for 30 years. The mortgage itself can be an FHA, VA, or RD loan. The MRB down payment assistance under this program provides between 4.5% and 9% of the total mortgage amount and is paid at closing. The exact amount of assistance provided is determined by the size of the loan; ultimately the Agency also has the final say as to whether closing costs are reasonable.
HOME Unassisted Program
This program is very similar to the previous one except for the fact that no MRB down payment assistance is included. It is intended for first time home buyers who do not qualify as low income borrowers, but will still need a low-cost loan in order to make housing affordable. The program provides 30-year mortgages at 4.5% to families or individuals whose income is no more than 115% of median in the area where they are purchasing their home. In certain designated target areas income may be as high as 140%.
CDBG/MRB Program
This program is another combination low interest loan and down payment assistance program. What makes it different from the others the state offers is that it is available only in 11 targeted parishes. Furthermore, purchased properties must be either single-family or two-family dwellings. Home buyers must also use the property as their primary residence for at least the first three years of ownership. Assistance is provided through a low interest loan at 3.15% and closing cost assistance between 4.5% and 9% of the mortgage amount.
Other Programs in Louisiana
On an occasional basis Louisiana residents may find other first time home buyer programs offered by HUD, other state agencies, municipal or county agencies, or nonprofit organizations. These other programs are generally spotty in nature and can take the form of DAP programs or low interest mortgages. Some municipalities even have special programs aimed at rehabbing and occupying formerly abandoned properties. Check with your local real estate broker, banker, and mortgage lender to find out what programs might currently be available in your area. Below is a partial list as obtained from the HUD website. Note that the information provided here is subject to change at any time:
- Jefferson Parish First Time Homebuyer Assistance Program (HAP)
- Lafayette First Time Home Buyer & Closing Costs Revolving Loan Fund Program (FTHBP)
- New Orleans Neighborhood Housing Services Down Payment and Closing Cost Assistance Program (DCCA)
- New Orleans PRIDE Down Payment & Closing Cost Assistance Program
- Orleans Parish Central City Housing Development Corporation TANF Home Ownership Assistance Program (TANF)