First Time Home Buyer

 Programs in Alabama

Complete First Time Home Buyer Programs Available in Alabama.

The state agency created by the legislature in Alabama to offer first time home buyer programs is the Alabama Housing Finance Authority. Here is a summary of the current first time home buyer programs that are offered:

FIRST STEP
This tax-exempt Mortgage Revenue Bond (MRB) program offers lower-than-market mortgage interest rates to first-time and lower-income home buyers.

To further increase the MRB program's appeal, AHFA has added several options for participating home buyers who need extra help with a down payment, who live in rural areas without access to many mortgage lenders, or who have disabilities or family members with disabilities.

STEP UP
Premiering in the fall of 2000, the Step Up program is Alabama's first down payment assistance program designed specifically for moderate-income home buyers: those whose incomes can sustain a market-rate mortgage but whose savings fall short of the amount needed for entry costs like a down payment, closing costs and prepaid items.

MORTGAGE CREDIT CERTIFICATES
AHFA's Mortgage Credit Certificate program provides low- to moderate-income home buyers with the opportunity to buy a home by keeping more money in their pockets each month. MCCs reduce home buyers' federal tax liability, increasing the amount of disposable income available to purchase a home.

AMERICAN DREAM DOWNPAYMENT INITIATIVE
AHFA offers $10,000 in interest-free mortgage funds to reduce out-of-pocket expenses for first-time home buyers with lower incomes.

RURAL ALABAMA MORTGAGE PROGRAM
The Rural Alabama Mortgage Program (RAMP) is a partnership of AHFA and USDA Rural Development. RAMP is designed to increase homeownership in rural areas, where 30-year, fixed-rate mortgage loans can be hard to come by.

HABITAT FOR HUMANITY LOAN PURCHASE PROGRAM
The AHFA/Habitat for Humanity partnership is a unique loan purchasing program in which AHFA purchases loans from Alabama's Habitat affiliates. This process allows the affiliate to receive the loan money up front in a lump sum while AHFA receives the monthly payments from the mortgagor for the life of the loan. The affiliate then uses the up-front money to build more housing for low-income families.

BUILDING BLOCKS TO HOMEOWNERSHIP
Because the process of purchasing and maintaining a home remains a mystery to so many people, AHFA offers a Building Blocks to Homeownership seminar in an effort to educate today's potential home buyer. The free seminar, held several times a year upon request, is structured for new and prospective home buyers. Topics include money management, consumer credit, mortgage credit, financing tools and home maintenance.

For complete details on these first time home buyer programs available to Alabama residents, visit the Alabama Housing Finance Authority website.

Best Lender For First Time Home Buyer Loans

Unfortunately, some lenders do not like to work with first time home buyers (due to not having a track record), and prefer instead to only provide mortgages to people who have previously owned a home. If you do not need help with the down payment and are not in need of any state program, but simply want to apply for a mortgage, we recommend  ING DIRECT Orange Mortgage They have great rates, an easy online application, and welcome first time home buyers. Additionally they have not been as severely hurt by the subprime mortgage crisis and are still approving the majority of applications.

Other First Time Home Buyer Programs & Resources