Hey there! If you're thinking of buying a home for the first time, and haven't saved up for a down payment, you still might be able to get it done.

Before I jump into the programs, let me briefly explain how down payment assistance works.

How it works

Down payment assistance comes in two forms: a grant, or a loan

A grant doesn't require repayment.

A loan does require repayment, but there are 3 different ways:

Monthly repayment. This is where they charge you interest and a monthly payment until the loan is paid off

Silent second. This is where they don't charge you interest, they don't charge you monthly payments, they just require that you pay it back when you sell the home.

Forgivable. This is where they forgive the loan as long as you meet certain criteria. A common requirement is that you live in the home as your primary residence for a set number of years. Once you've completed the timeframe, they forgive your loan and you don't need to pay it.

Approved lenders only

These programs can only be handled by approved lenders. If you would like help from a local realtor familiar with the programs and lenders with access, fill out this form here and I will connect you with one.

Now that we have that out of the way, let's jump in! Below are the local programs available to help make homeownership more accessible.

Huntsville

Down Payment Assistance Program (DAP)

  • Assistance: Provides up to $10,000 toward down payment and closing costs, based on individual needs.

  • Eligibility: First-time homebuyers who meet income qualifications. Applicants must commit to living in the property as their primary residence for at least five years.

  • Additional Requirements: Completion of a homebuyer education course through the Family Services Center.

  • Contact: For more information, email comdev@huntsvilleal.gov

  • Website: https://www.huntsvilleal.gov/residents/neighborhoods/housing/

Birmingham

Down Payment Assistance Program

  • Assistance: Offers up to $10,000 toward closing costs for homes purchased within Birmingham city limits.

  • Eligibility: Specific criteria apply; interested individuals should contact the program administrators for detailed information.

  • 5-year forgivable loan at 0% interest rate.

  • Website: https://cobcd.com/ready-to-own/

Alabama Housing Finance Authority (AHFA) Programs

  1. Step Up Program
    • Assistance: Provides up to 4% of the sales price, capped at $10,000, to assist with down payment and closing costs.

    • Eligibility: Available to homebuyers with an income of $159,200 or less, a minimum credit score of 640, and a debt-to-income ratio not exceeding 45%.

    • Repayment: Assistance is structured as a 10-year second mortgage combined with a 30-year fixed-rate first mortgage.

    • Website: https://www.ahfa.com/homebuyers/programs-available/step-up

  2. Affordable Income Subsidy Grant

  3. Mortgage Credit Certificates (MCC)
    • Benefit: Provides a tax credit of up to 50% of the mortgage interest paid per year, with a maximum of $2,000 annually.

    • Eligibility: First-time homebuyers purchasing a property in Alabama who meet income and purchase price limits.

    • Website: https://www.ahfa.com/homebuyers/programs-available/mccs

These programs can only be handled by approved lenders. If you would like help from a local realtor familiar with the programs and lenders, fill out this form here and I will connect you with one.

Mobile County

  • Down Payment Assistance Program
    • Assistance: Offers grants between $1,000 and $25,000 to eligible first-time homebuyers for down payment and closing costs.

    • Eligibility: Applicants must meet income requirements and other program criteria.

    • Website: mobilecountyal.gov

Decatur

  • H.O.M.E. Program
    • Assistance: Provides financial assistance for closing costs and covers 50% of the minimum down payment.

    • Eligibility: Low-income families who have not owned a home in the last three years and meet other program criteria.

    • Note: Applicants must work with a Preferred Decatur HOME realtor and complete a housing counseling course.

    • Website: https://www.cityofdecatural.com/departments/community-development/home-program/

Jefferson County

Opelika

  • Homeownership Loan Program: Offers down payment and closing cost assistance to low-to-moderate-income individuals and families purchasing a home within the city limits. The program aims to make homeownership more affordable for eligible participants. opelika-al.gov

These programs can only be handled by approved lenders. If you would like help from a local realtor familiar with the programs and lenders, fill out this form here and I will connect you with one.