North Carolina First Time Home Buyer – 2023 Loan Programs
Are you a first time home buyer looking to purchase a home in North Carolina? On this page you can learn about the different types of mortgage programs that are available to first time home buyers. You may also view the different down payment assistance programs that are currently being offered in North Carolina.
North Carolina First Time Home Buyer Loans
Below are some mortgage programs that are available to first time home buyers.
Types of Mortgages:
- Conventional Loans – Conventional loans offer the best loan terms to borrowers with good or excellent credit, as well as those who can afford to place a larger down payment. If you are able to put 20% or more down, you will be able to avoid paying private mortgage insurance (PMI). However, conventional loans also offer low down payment options, such as programs that only require 3% down.
- FHA Loans – FHA loans are a good option for borrowers who may not be able to qualify for a conventional loan. The qualification requirements for FHA loans are much more lenient than conventional loans. This includes options for home buyers with credit scores as low as 500 (in order to qualify for a 3.5% down payment, you must have a credit score of at least 580).
- USDA Loans – USDA loans provide home buyers the opportunity to purchase a rural home without any down payment. These loans are intended for borrowers with low-to-moderate income. In addition to not requiring any money down, you can also finance the closing costs into the loan. This means you can essentially buy a home with no money out of pocket!
- VA Loans – Active duty military members and veterans can apply for a VA loan which allows you to buy your first home without any down payment. These loans are not available to the general public, but exclusively to military/veterans.
- Jumbo Loans – Any mortgage that does not meet the conforming loan limits is a jumbo loan. You can lookup the 2023 conforming loan limits for your county using this conforming loan limits lookup tool. If you want to buy a more expensive home, and have the income to qualify, jumbo lenders offer loan amounts up to $5,000,000.
- Non-Prime Loans – If you do not qualify for any of the above types of loans, you may consider a non-prime or non-qm loan. These programs are especially helpful to self-employed borrowers, and people with a variety of credit issues (such as low credit scores and/or a recent bankruptcy). Regardless of your situation, you may considering learning more about non-prime loans if you do not qualify for any of the other types of mortgages featured above.
These are some of the mortgage options that are available to first time home buyers.
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Upon receiving your request, we will match you with a mortgage lender that offers first time home buyer loans in North Carolina. You will be provided with a free consultation, and the opportunity to get pre-approved for a mortgage.
North Carolina Down Payment Assistance Programs
First time home buyers in North Carolina may be eligible to receive down payment assistance. This includes programs offered throughout the entire state, as well as several locally offered programs. You can learn more about these programs below. If you would like some help checking your eligibility for down payment assistance, please fill out this form. We will match you with a mortgage lender that specializes in helping first time home buyers find down payment assistance.
N.C. 1st Home Advantage Program
This program offers up to $8,000 in assistance. This comes in the form of a “second mortgage”, which essentially is a 30 year loan, but you do not have to pay it back unless you sell your home or refinance within 15 years. Even if you do sell your home or refinance, it is an excellent opportunity to receive money to use for your down payment. In order to qualify, you must meet the following requirements:
- Be a first time home buyer or military veteran.
- You must have a credit score of 640 or higher.
- The property can be a single family home, townhouse, condominium, duplex, or manufactured home.
- Your income must not exceed the limits, which is currently $89,500.
To learn more about this program, please visit the North Carolina Housing Finance Agency website.
Greensboro Down Payment Assistance Program
First time home buyers in Greensboro may qualify for up to $10,000 in down payment assistance. The funds are received in the form of a 5 year forgivable loan. This means that as long as you stay in your home, and do not sell it or refinance, you will not have to pay the money back after 5 years. The amount owed will also be reduced by 20% each year (so if you received $10,000, that means that $2,000 will be taken off the balance each year).
Program Requirements
- Be a first time home buyer.
- The home must be located within the city limits of Greensboro.
- You can not exceed a 43% DTI ratio.
- Complete a HUD approved homebuyer education course.
- If you have 1-2 people in your household, your income must not exceed 120% of the average median income. If you have 3 or more people in your household, you must not exceed 140% of the average median income.
Please note: If you purchase a home within the cities 7 redevelopment areas, you can receive an extra $5,000, and you do NOT need to be a first time home buyer. These redevelopment areas are: Arlington Park, Eastside Park, Gorrell Street, Ole Asheboro, Phillips Lombardy, South Elm Street, and Willow Oaks.
You may learn more about the requirements on the city of Greensboro website.
Greenville HOME Down Payment Assistance
First time home buyers in Greenville may be eligible to receive up to $20,000 in down payment assistance. The funds are provided as a no interest loan that is forgiven by 1/15 each year (no monthly payments are required). At the end of 15 years, the loan will be completely forgiven, which means that nothing was ever required to be paid back.
Program Requirements
- You must be a first time home buyer.
- The home must be located within the city limits of Greenville.
- The maximum sales price is $150,000 (for a new or existing home).
- Your income must not exceed 80% of the area median.
- The highest DTI ratio allowed is 43%.
- You must pay $1,000 towards the down payment or closing costs.
You can learn more about this program on the city of Greenville website.
Jacksonville Homeownership Down Payment Assistance
First time home buyers in Jacksonville may be eligible to receive down payment assistance. The funds are received as a 0% interest deferred loan. The money is due either once the home is sold, refinanced, or at the end of the first mortgage term (which is usually 30 years). The loan will also be due if the home is no longer used as a primary residence (meaning the home becomes a rental property).
Program Requirements
- You must not currently be a homeowner.
- The home must be located within the city limits of Jacksonville.
- The program is only available for new construction (no existing homes).
- You may not have more than $15,000 in liquid assets.
- It is required that you complete a homebuyer education course.
- You must be able to show at least 1 year of stable employment.
- Your income must meet HUD household income limits.
To learn more about this program, please visit the city of Jacksonville website.
City of Gastonia – Homebuyers Assistance Program
First time home buyers in Gastonia may be eligible to receive up to $5,000 in down payment assistance. This program is funded by HUD and administered by the City of Gastonia Community Development Division. In order to qualify, you must meet the program requirements.
Program Requirements
- Currently reside in the Gaston County.
- The maximum purchase price of a new home is $227,000, and for an existing home is $192,000.
- You must complete a homebuyer education course.
- Provide 2 years tax returns, 2 months pay stubs, and your 2 most recent bank statements.
- You can not have more than $20,000 in liquid assets.
- You must be able to show at least $1,000 in your bank account for the last 2 months.
Income Limits
- 1 person – $44,250
- 2 persons – $50,600
- 3 persons – $56,900
- 4 persons – $63,200
- 5 persons – $68,300
- 6 persons – $73,350
- 7 persons – $78,400
- 8 persons – $83,450
You can learn more about this program on the City of Gastonia website.
North Carolina First Time Home Buyer Tax Credits
The Mortgage Credit Certification (MCC) tax credit provides you an opportunity to reduce your tax bill, as well as enhance your home loan application by reducing your debt-to-income ratios. How this works, is you can deduct up to $2,000 off your federal tax bill each year. The MCC allows up to 35% of your annual interest to be eliminated (with the cap being at $2,000). Some great news, is this can be used in addition to standard mortgage interest deductions!
Are You Eligible for Down Payment Assistance?
A mortgage specialist can help you check your eligibility for down payment assistance. If you would like to receive some help checking what down payment assistance programs you may be eligible for, fill out this form. We will match you with a mortgage lender that can help you see if you qualify for any down payment assistance.
First Time Home Buyer Questions
Below are some of the most frequently asked questions about first time home buyer loans:
How much do I need for a down payment?
The minimum down payment requirement will depend on the type of mortgage program. USDA and VA loans do not require any down payment. FHA loans only require a 3.5% down payment (and allow down payment assistance to be used). Conventional loans typically require either 3% or 5% down. The minimum down payment for a non-prime loan is usually at least 10% (or higher).
What is the maximum loan amount that I can qualify for?
The amount that you will be allowed to borrow will depend mostly on your income, as well as the particular type of loan you are interested in. There are maximum loan limits for each type of mortgage program which are set at the county level. Conforming loan limits are the maximum loan amounts allowed for conventional mortgages. FHA loans have their own loan limits. This is not necessarily how much you can borrow though, but the maximum amount allowed in your location. The amount that you can personal qualify for will be based upon your income, and how much debt you have. For most loans, your monthly mortgage payment, along with your monthly debts may not exceed 43% of your income.
Can I buy a home without a real estate agent?
It depends on your state and the type of loan program. For some states, you must use an agent. In other states, you are not required to use a real estate agent for many loan program, such as conventional mortgages. However, some loan types require that you use a real estate agent regardless of your location, such as USDA loans.
Are there mortgage loan options for borrowers with bad credit?
Yes, both FHA loans and non-prime loans are available to borrowers with lower credit score, and other credit challenges. The minimum credit score required for an FHA loan is 500. For non-prime loans, there are lenders that allow a borrower to have a credit score even below 500. Non-prime loans also do not have any waiting periods after a bankruptcy.
Can I buy a home if I owe tax debt?
For government-backed loans, such as FHA, VA, and USDA loans, you can buy a home with tax debt as long as you have made a payment plan with the IRS, and are not behind on the payments. Any federal debt must be in good standing in order to get a government-based mortgage. If your tax debts have moved into the status of a tax lien, this will prevent you from getting a home loan until it is resolved.
Can I buy a home if I have student loans?
As long as you are not delinquent on the student loan payments, and the monthly payments do not cause excessive debt-to-income ratios, you can still get a mortgage.
Can I buy a home without my spouse?
A common question is if you can buy a house without your wife or husband. The short answer is yes. There are numerous reasons someone may want to exclude their spouse from a mortgage application, such as lower credit, lack of job history or income, or one spouse having excessive debt that could prevent an approval. You may be able to qualify and get a home loan without your spouse.
How do I find out if I qualify for a mortgage?
A loan representative can help you determine what mortgage programs you may qualify for, and also check your eligibility for down payment assistance. If you would like to receive a free consultation, we can help match you with a mortgage lender that offers first time home buyer loans in North Carolina.