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Alabama Assistance Programs

Southern charm meets modern amenities in Alabama. Enjoy a beautiful coastline, rolling hills, and friendly communities. Alabama boasts a strong job market and affordable living. Let us help you put down roots in Alabama with a fantastic mortgage rate.

If you have any questions about securing the best mortgage rates in Alabama, please contact us today. We are here to assist you in finding the mortgage rates that best suit your needs.

Programs for First-Time Home Buyers in Alabama

A.H.F.A. Step Up

The Alabama Housing Finance Authority (A.H.F.A.) offers a beautiful opportunity to first-time home buyers in Alabama to achieve their dream home. Key characteristics of the program are:

  • Access to AHFA's Alabama Step-Up Program
  • Fixed-rate mortgages are available to eligible first-time and repeat buyers to secure a 30-year conventional loan by choosing from HFA Advantage, VA loan, or FHA loan.
  • Buyers also get down payment assistance and affordable rates under the Alabama Step Up Program.
  • The conditions for this program are that the property has to be located within Alabama.
  • Based on the loan type, the buyer must have at least 640 as a credit score.
  • The buyer's earnings must be equal to or less than $159,200.
  • The debt-to-income ratio should be 45% or less. Buyers also need to complete the homeownership education course.

Alabama Down Payment Assistance

AHFA Step Up Down Payment Assistance

The program offers down payment assistance in Alabama. Key features of the program are:

  • Down payment assistance of up to $10,000 or 4%, whichever is less.
  • A 10-year second mortgage option facilitates the assistance funds.
  • Homebuyers can pay for both loans each month with a single payment.
  • The condition to apply for this program is that the homebuyer should be eligible for the Step Up First Mortgage program.

AHFA Affordable Income Subsidy Grant

A subsidy grant is offered based on the income of the homebuyer. The grant varies between 0.5% and 1% of the mortgage amount. This grant is offered to only those using HFA Advantage conventional loans. While the conditions for the grant are similar to those of the Alabama Step Up Program, the income limits differ based on the place where you are buying your home.

Mortgage Credit Certificate (MCC)

Other than down payment assistance and affordable mortgage rates in Alabama, the MCC is another assistance for homebuyers in the state. What is MCC? It is a tax credit, and in the state, it is up to 50% of the mortgage interest. The credit can be up to $2,000 annually. If the loan is over $150,001, you can get a tax credit of up to 20% of the mortgage interest.

This assistance can be combined with the Step Up Program of AHFA or another 30-year fixed-rate mortgage from another lender. Qualifications include:

  • You should be a first-time homebuyer in Alabama.
  • It must be an Alabama-based property.
  • The income and purchase price limits need to be met.

Other Alabama Homebuyer Assistance Programs

Down Payment Assistance Program, City of Huntsville, Alabama

For people keen to buy a house in the City of Huntsville, this down payment assistance in Alabama can be a big help. If it's a new construction, you can receive compensation of up to $10,000; for an existing home, the grant is up to $7,500. To qualified homebuyers, the money is offered as a 0% interest second mortgage and is forgiven once the homeowner has lived in the house for five consecutive years. Qualifications include:

  • Should be a first-time homebuyer in Alabama.
  • It should be an existing home in Huntsville.
  • Should meet lender's credit criteria.
  • Participate in a homebuyer education course.
  • Meet the required income limits.

Decatur H.O.M.E.

The municipality of Decatur offers this financial help in Alabama to low-income families. Assistance includes closing costs and paying 50% of the minimum down payment. Contact a Preferred Decatur HOME realtor to apply for this assistance. The homebuyer cannot own a home in the last three years. It is also mandatory that the buyer has not participated in this program earlier. The buyer must meet the required income conditions and have attended a housing counseling course.

Down Payment Assistance Program Mobile, Alabama

This down payment assistance in Alabama, Mobile, Ala. assists up to $10,000 as down payment and closing assistance. For a 'blighted' property, you can receive assistance up to $15,000 within the city limits. To apply, the buyer has to be either a green card resident or a U.S. citizen. They also need to meet the income requirements. This property should be the homebuyer's primary residence, where you need to stay for at least five years to avoid paying back the assistance.

FHA Loans

This is a good scheme for people with low credit scores, as low as 580. The down payment is 3.5% of the purchase price.

VA Loans

This assistance program is for veterans and active service members. Their spouses are also eligible. Key features include: zero down payment, competitive interest rate, and no criteria of credit score requirements.

USDA Loans

This loan assistance applies if you are buying a property in a rural area. Key benefits include a zero down payment and minimum 640 credit score. Buyers must take home-buying classes and meet all necessary requirements, including income.

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