Best First Time Home Buyer Programs in Ohio

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Contributor, Benzinga
April 2, 2020

Ohio offers several programs to make homeownership an affordable reality if you’re ready to make the leap. 

Take a look at Benzinga’s guide to the best first-time home buyer programs in Ohio, as well as national programs you may also qualify for.

Best First Time Home Buyer Programs in Ohio:

Best National First Time Home Buyer Programs:

First Time Home Buyer Programs in Ohio

The Ohio Housing Finance Agency (OHFA) oversees the state’s first-time home buyer programs. All of Ohio’s first-time home buyer programs are available through approved private lenders. Here are program details and eligibility requirements. 

1. Your Choice! Down Payment Assistance

The Your Choice! Down Payment Assistance program provides a forgivable loan to use toward your down payment, closing costs and preclosing expenses. You can get a loan for either 2.5% or 5% of your home’s purchase price if you qualify. The loan will be forgiven after 7 years, but if you sell or refinance your home before then, you’ll need to pay off the loan. 

Eligibility requirements: 

  • You must meet income limits, which vary by location and family size. 
  • Purchase price limits also vary by location. The purchase price limit for target areas is $346,315 is $283,349 for non-target areas. 
  • You must have a credit score of 640 or higher if your mortgage is a conventional loan, a USDA loan or a VA loan.
  • FHA loans require you to have a credit score of 650 or higher.
  • You must take a free homebuyer education class. 

2. Ohio Heroes

The Ohio Heroes program provides public service employees with a discounted mortgage interest rate. A discounted mortgage rate can save thousands of dollars over the life of your home loan. 

Eligibility requirements: 

  • You must work in one of the following professions:
    • Military, as an active duty service member, reservist or surviving spouse.
    • Education, as a teacher (pre-K to 12th grade), administrators and counselors 
    • Public safety, as a police officer, firefighter (including volunteers), EMT or paramedic
    • Medical, as a doctor, nurse, nurse practitioner or state-tested nursing assistants (STNAs)
  • You must be below the program’s income limits, which vary by county and family size.
  • The home you buy must meet the program’s price limits, which can vary by location.
  • A credit score of 640 or higher is required for conventional, USDA or VA loans. 
  • 650 or higher is required for an FHA loan
  • You must complete a free homebuyer education class.

3. Grants for Grads

The Grants for Grads program helps recent graduates buy an Ohio home. The program offers 2.5% or 5% of the purchase price as down payment assistance in the form of a forgivable loan. 

Your loan will be forgiven if you stay in your home for 5 years or longer. If you sell your home before that, you are responsible for repaying the loan. 

Eligibility requirements:

  • You must be a first-time home buyer. The OHFA defines a first-time home buyer as not having owned a home in the last 3 years. 
  • You must have graduated in the past 48 months with a degree. You can qualify with an associate’s, bachelor’s, master’s, doctorate or another post-graduate degree from an accredited college or university. 
  • You must meet income and purchase price limits. Both of these vary by area. The income limits also vary depending on the size of your family. 
  • You must meet credit score requirements. You must have a credit score of 640 or higher for a conventional, VA or USDA mortgage. You must have a credit score of 650 or higher for an FHA mortgage. 
  • You must complete a home buyer education class

4. Mortgage Tax Credit

The Mortgage Tax Credit provides first-time home buyers with a federal tax credit. The tax credit is based on your mortgage interest, and it can lower your tax liability. If you qualify, you can take this credit in addition to your mortgage interest deduction. 

If you use an OHFA home loan, you may qualify for a tax credit of up to 40% of your home mortgage interest, with a maximum of $2,000. You can combine the mortgage tax credit with a down payment assistance loan of 2.5% of your home purchase price. 

You may still be eligible for a tax credit if you don’t use an OHFA home loan. You may be able to deduct 30% of your mortgage interest if you buy a bank-owned property. If you buy a property in a target area, you may be able to deduct 25% and can be eligible to deduct 20% in a non-target area. 

Eligibility requirements:

  • You must be a first-time home buyer. You may not have owned a home in the last 3 years. 
  • Home purchase price and income limits must be met. These vary depending on where you live and the size of your family. 
  • You must meet the minimum credit score requirements. You must have a 650 credit score. Other mortgage types may require a credit score of 640 or higher.
  • You must complete a home buyer education class.  

Best National First Time Home Buyer Programs

As you consider Ohio’s programs, take time to look into the national programs. Although these programs aren’t exclusively for first-time home buyers, they all offer low down payment requirements. 

Benzinga’s laid out the most common programs and our recommended lender for each. 

FHA Loans

FHA loans are a popular choice for first-time home buyers due to the low down payment requirements. The Federal Housing Administration insures these loans, which means lenders can offer them to a range of home buyers, including those with less-than-stellar credit scores. 

Eligibility requirements:

  • A credit score of 500 or higher
  • A down payment of 3.5% or more if you have a credit score of 580 or higher 
  • If your credit score is 500-579, you must make a down payment of 10% or more.
  • You must buy a property below the purchase price limits in your area. In most areas, the limit is $331,760, but it may be as high as $765,600 if you live in a high-cost area. 
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Best National FHA Lender: Rocket Mortgage® by Quicken Loans®

Rocket Mortgage® by Quicken Loans® offers a seamless online mortgage experience. You can complete the entire process from home, and experts are available to answer your questions via phone or chat. Quicken Loans® has award-winning customer service, and it’s experienced with the FHA loan process. They also offer extensive online educational resources.

VA Loans

VA loans help current service members and veterans purchase homes. It’s a great fit for first-time home buyers because there is no down payment requirement and no mortgage insurance, which lowers your monthly payments. The VA insures these loans and private lenders offer them to borrowers.

Eligibility requirements:

  • Veterans and current service members must meet minimum service length requirements. Reservists and National Guard members and some surviving spouses may also qualify. Contact the VA to find out if you’re eligible and that you have a Certificate of Eligibility. 
  • No minimum credit score requirement
  • No minimum or maximum income requirement
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Best National VA Lender: Veterans United

The VA loan process can be daunting. You want to work with an experienced lender and Veterans United has been the top VA lender for 4 consecutive years. It boasts excellent customer service reviews and a user-friendly website. Representatives are available around the clock to help you navigate the process. 

USDA Loans

USDA loans help low- and moderate-income borrowers buy homes in rural areas. If you qualify, you can buy a home with no down payment. Flexible credit guidelines mean you don’t need perfect credit to qualify. 

Eligibility requirements:

  • Income below your area’s income limits
  • There’s no credit score requirement, but you do need to show you can handle debt. Lenders will review your credit history. 
  • You must be a citizen, a non-citizen national or a qualified alien.
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Best National USDA Lender: Fairway Independent Mortgage Corporation

Fairway Independent Mortgage Corporation has offered mortgages for more than 20 years. It’s customer-service focused with branches in almost every state. You can also start the application process online. 

Which Mortgage Is Right for You?

Choosing your first lender is a big decision. Review first-time home buyer resources and consider taking a home buyer education class to learn the ins and outs first. 

Contact multiple lenders to find out more about your options. Keep in mind that some situations, like being self-employed, might make it more challenging to find a lender. Be persistent and upfront with lenders about your financial situation. 

It’s easy to get a few quotes and start your road to homeownership today. 

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