First time home buyer programs all across the country typically come in one of three forms: low interest mortgages, closing cost and down payment loans, and grants to be used toward the costs of a first home. In the case of North Carolina first time home buyers, programs do exist but they are scarce in number. North Carolina is a state with only a handful of different programs administered by a state agency, and not much else to choose from.
If you're a first time home buyer in North Carolina your best bet is to contact a mortgage lender or your real estate agent to inquire about assistance programs. First time home buyer programs come and go with regularity, meaning that there may be other programs that have come available since this article was written. Your real estate agent and mortgage lender should have all the up-to-date information about what's available and what you qualify for. Take the time to ask questions and pick their brains; that's what you're paying them for.
North Carolina Housing Finance Agency
The North Carolina Housing Finance Agency (HFA) is a public agency created by the North Carolina General Assembly in 1973. Its purpose is to help provide affordable housing to those individuals in North Carolina under served by the general market. The agency offers low-cost mortgages, down payment and closing costs assistance, rehabilitation loans, and more. The HFA acts as an administrator and clearinghouse for both state and federal programs; they are also sometimes involved in programs with charitable organizations as well. To date, more than $12 billion has been put to use for North Carolina's housing needs.
First Mortgage Program
The HFA's mortgage program for first time home buyers is sometimes referred to by lenders as a FirstHome Mortgage or an MRB loan. These mortgages are 30-year, fixed-rate products offered with the backing of the FHA, USDA, or VA. Down payments can range from 0% to 3.5% of the sales price, and some of these loans can finance up to 100% of the home's value. In order to qualify for this program you must meet the state's definition of a first time home buyer, you must occupy the home within 60 days of closing, you must not exceed certain income limits, you must be able to prove legal residency, and the sales price of a home you choose may not exceed certain limits.
HFA Down Payment Assistance
The North Carolina HFA offers a down payment and closing costs assistance loan for up to $8,000. It is an interest-free secondary loan which does not need to be repaid until the initial mortgage is paid off. In order to qualify, borrowers must meet certain income limits, have a minimum credit score of 650, and must contribute at least $1,000 of their own funds. Also, you must occupy the home as your principal residence for the life of the mortgage. If you should retain ownership of the home yet not maintain it as your principal residence, the entire balance of the down payment assistance loan becomes due.
Mortgage Credit Certificates
Mortgage credit certificates are available in all 50 states, but in states like North Carolina they are more appealing because there are so few first time home buyers programs available. Mortgage credit certificates can be obtained by first time home buyers who meet certain income eligibility requirements. The certificates are, more or less, a way to increase the amount of monthly income you can dedicate to your mortgage payment by reducing your federal tax liability. How well the certificates work to your advantage depends on your circumstances.
Other First Time Home Buyer Programs in North Carolina
From time to time there are other state, local, and county-run programs available in North Carolina. You can usually find a list of running programs on the HUD website, though none are currently listed for North Carolina at this time. You should also check with your county and local housing authority to see what they have to offer. Often times you will see city programs designed to fill vacant homes and rehabilitate neighborhoods. The point being, what we've provided here is certainly not a complete list. If you keep your eyes open and investigate through the correct channels, you should be able to come up with a program suitable for you.