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North Carolina first-time homebuyer assistance programs

Ellen Chang Suzanne De Vita
Written by
Ellen Chang,
Edited by
Suzanne De Vita
Published on January 31, 2024 | 4 min read

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Home in Raleigh, North Carolina
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Buying your first home can feel overwhelming, especially when applying for a mortgage and covering the upfront costs. If you’re looking for a home in North Carolina, there’s an upside: If you’re eligible, the North Carolina Housing Finance Agency can assist you with your down payment and provide an affordable loan and other ways to save.

North Carolina first-time homebuyer loan programs

The North Carolina Housing Finance Agency (NCHFA) operates three programs to meet various needs of potential homeowners: the NC Home Advantage Mortgage, the NC 1st Home Advantage Down Payment and the NC Home Advantage Tax Credit.

NCHFA NC Home Advantage Mortgage

NCHFA’s NC Home Advantage Mortgage is available to both first-time homebuyers and those who already own a home. A first-time homebuyer is considered someone who hasn’t owned a home in the last three years. The program offers a fixed-rate mortgage, either a conventional, FHA, VA or USDA loan.

Here are the requirements to qualify:

  • Your annual income is not over $134,000.
  • Your credit score is 640 or higher.
  • Your debt-to-income (DTI) ratio is no more than 43 percent.
  • You’re buying either a single-family home, townhome, condo, duplex (FHA loan only) or new manufactured home (FHA, VA or USDA loans only, with a minimum credit score of 660).

North Carolina down payment assistance

NCHFA NC 1st Home Advantage Down Payment

NCHFA also offers $15,000 in down payment assistance specifically to first-time homebuyers, veterans and those buying in special targeted markets through the NC 1st Home Advantage Down Payment program. This assistance comes in the form of a zero-percent second mortgage completely forgiven after 15 years. To be eligible, you must be obtaining an NC Home Advantage Mortgage and meet the requirements for that program.

Other first-time homebuyer loan programs

First-time homebuyers and veterans can combine an NC Home Advantage Mortgage with the NC Home Advantage Tax Credit, the state’s mortgage credit certificate (MCC) program.

An MCC allows you to claim a federal tax credit, equal to either 30 percent of your mortgage interest if you’re buying an existing home or 50 percent if you’re buying new-construction. At either rate, the credit is capped at $2,000 per year, but can be used each year so long as you live in your home.

Note that if the MCC is used in combination with the NC Home Advantage Mortgage, only certain types of properties qualify.

While you’re considering first-time homebuyer programs in North Carolina, be sure to explore nationally available loan programs including:

  • FHA loans – If you have a lower credit score or limited savings, consider an FHA loan. These loans are widely available, have a minimum credit score of 580 and require a down payment as little as 3.5 percent.
  • VA loans – If you’re a member of the military or veteran, you could qualify for a VA loan, which doesn’t require a down payment.
  • USDA loans – USDA loans don’t have a down payment requirement, but are only available to borrowers buying in a USDA-eligible rural area. You typically need a credit score of 640 or higher to qualify.
  • Good Neighbor Next Door program – This HUD program has a very low down payment requirement on homes in certain areas, coupled with the ability to save 50 percent on the purchase price.

Get started

Ready to move one step closer to  buying your first home in North Carolina? As you prepare to become a first-time homebuyer, here are some next steps:

  • Do your homework. If you’re interested in one of the North Carolina Housing Finance Agency’s programs, visit the organization’s website for program information and guides.
  • Work on your credit score. It’s the most important factor in determining your mortgage rate, so focus on boosting your number.
  • Compare lenders. You can view current North Carolina mortgage rates and lenders through Bankrate, or use the NCHFA’s website to find an approved mortgage lender in your area.
Written by
Ellen Chang Arrow Right Icon
Contributing writer
Ellen Chang is a former contributor for Bankrate. Chang focused her articles on mortgages, home buying and real estate. Her byline has appeared in national business publications, including CBS News, Yahoo Finance and MSN Money.