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Ohio’s First-Time Homebuyer 2022 Assistance Programs

Ohio Housing Finance Agency / Getty Images

Congrats! You’ve crunched the numbers and discovered you’re in a place financially to swing a monthly house payment. And you’ve set your sights on becoming a first-time homeowner in the Buckeye State. The only thing standing in your way is the hefty down payment and other fees that come with buying a home. Talk about a buzzkill!

But wait—eligible first-time homebuyers who meet certain income limits could qualify for a low-interest loan and down payment assistance.

Keep reading to get the 411 on eligibility requirements for assistance programs in Ohio, and the types of homes you’ll be able to buy.

Ohio’s first-time homebuyers assistance programs

Founded in 1983, the Ohio Housing Finance Agency has helped Ohioans by providing financial assistance for low- and moderate-income homebuyers. The program includes first-time homebuyers who have not owned a primary residence in the past three years (or had an ownership interest in one).

Here’s the gist of OHFA’s leading programs and what they offer.

Your Choice! Down Payment Assistance

The OHFA’s Your Choice! Down Payment Assitance program offers 30-year fixed-rate conventional, FHA, VA, and USDA-RD government loans.

With these loans, borrowers can score not only a discounted mortgage interest rate but also down payment assistance totaling 2.5% or 5% of the home’s purchase price.

Bonus: If you qualify for this assistance, you can also put the money toward home costs beyond a down payment. That includes closing costs or other pre-closing costs such as property taxes or your first home insurance payment. And after seven years, the assistance will be forgiven, which means you don’t have to repay the money unless you sell or refinance your home.

Ohio Heroes

The OHFA rewards “heroes” for their service with discounted home loans. The program defines heroes as active-duty military personnel, veterans, reservists, and their surviving spouses. Other heroes include police, EMTs, paid and volunteer firefighters, physicians, nurses, teachers, administrators, and school counselors.

“The Ohio Heroes program is 0.25% lower than the regular OHFA rate,” says Kyle Feess, senior loan officer and vice president at Homeside Financial.

Another perk? Borrowers can combine the down payment assistance program with this mortgage.

Ohio Grants for Grads

If you’ve been sharing your living quarters with roommates for the past four years, you’re probably more than ready to buy your own home. And that’s great news if you want to live in Ohio. Recent college graduates may qualify for a discounted interest rate and down payment assistance of up to 5% of the home’s purchase price.

“The Grants for Grads program is typically a 0.125% lower rate than the regular OHFA rate,” says Feess. And if the graduate remains in Ohio for five years, the down payment assistance is fully forgiven. But if you take advantage of this program and decide to sell your home or move out of Ohio before that time is up, you’ll have to repay part of the assistance.

“Grants for Grads allow a 20% reduction per year in the amount you pay back, which the regular OHFA down payment assistance does not,” says Feess.

The Ohio Mortgage Tax Credit

Taxes are inevitable when you’re a homeowner. But some Ohioans may qualify for some nifty tax deductions.

For example, borrowers who use an OHFA loan product might be eligible for the OHFA Mortgage Tax Credit, which provides homebuyers with a direct federal tax credit on a portion of their mortgage interest. The exact amount of the credit varies based on location, property, and type of mortgage, but borrowers could reap up to $2,000 in tax savings per year.

Eligibility requirements

So what hoops do you need to jump through to qualify for the above programs? Here are the main OHFA homebuyer requirements:

  • Borrowers must meet the income limits, which depend on family size.
  • The house has to be within the purchase price limits. (This varies depending on whether your home is in a nontarget area or target area.)
  • Borrowers need to meet credit score requirements. (For conventional USDA and VA loans, that’s a score of 640 or higher. And for FHA Loans, you’ll need a minimum score of 650.)
  • Homebuyers have to meet the debt-to-income ratio specific to their loan type.
  • Borrowers must complete the OHFA homebuyer education course.

Which OFHA program is right for you?

You might be a candidate for one or more OHFA programs depending on your circumstances.

For example, if you just graduated from nursing school, you could apply for the Ohio Heroes or Ohio Grants for Grads. To figure out which works better for your situation, talk with an OHFA participating lender familiar with the programs who will walk you through the process.

“The great thing about OHFA is that the buyer and lender usually discuss the best OHFA option for the buyer,” says Feess.

What kind of house can you buy?

If you’re a first-time buyer who meets the OFHA program’s criteria, you’ll receive some crucial financial support. There’s just one issue—today’s hot housing market.

“Currently, the only challenge for low- and moderate-income homebuyers is finding a home within their budget,” agent Angel Perez of Coldwell Banker Realty in Columbus, OH.

For example, Perez says in Franklin County‘s nontarget area, they can purchase up to $348,344, and up to $425,754 in a target area. Conversely, price limits in Mahoning County are $311,980 for nontarget areas and $381,308 for target areas.

Here are a few other restrictions to keep in mind when home shopping:

  • Eligible properties are generally limited to 2 acres within a municipal corporation and 5 acres outside a municipal corporation.
  • You can also buy an existing single-family dwelling, condominium, duplex, or a multifamily home (up to four units).
  • You can purchase a single-family home that’s a spec house, whether it’s newly built or nearly completed.
  • You can buy a modular or manufactured home.

Financial assistance in your neighborhood

In addition to the OFHA programs, many local options exist to help first-time homeowners with down payment assistance.

For example, the Homeport program in Franklin County offers up to $15,000 total in down payment and closing cost assistance. (You must meet specific eligibility requirements, and the property must be located inside Franklin County and outside the physical jurisdiction boundaries of the city of Columbus.)

Yearning to set roots in the largest city on Lake Erie? Eligible first-time homebuyers can apply for the Cuyahoga County Down Payment Assistance Program, which offers 10% down payment assistance of the qualifying home purchase price or up to $14,900 toward a home in one of the 51 eligible Cuyahoga County communities

To get started, talk to your real estate agent or lender to find out if there are homebuyer assistance programs in your area.

The post Ohio’s First-Time Homebuyer 2022 Assistance Programs appeared first on Real Estate News & Insights | realtor.com®.

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