Ohio first-time homebuyer assistance programs
If you’re trying to buy a house in Ohio, you’ve picked a budget-friendly place: Median prices in the Buckeye State sit just under $222,000, according to Redfin, which is well below the current national median price tag of $382,600. While that is a better deal than you’ll find in a lot of other places around the country, it can still feel like a huge pile of cash – especially if you’re a first-time homebuyer. So, whether you’re trying to plant roots in Cincinnati, Cleveland or somewhere in between, start your real estate journey with the Ohio Housing Finance Agency (OHFA) to explore programs that can make homeownership more affordable.
Ohio first-time homebuyer programs
OHFA Homebuyer Program
The Ohio Housing Finance Agency works with lenders to offer 30-year, fixed-rate mortgages for first-time buyers who satisfy the following requirements:
- Meet the income and purchase price limits of the program, which vary by county and household size
- Meet the debt-to-income ratio requirement (which varies based on type of loan)
- Have a credit score of 640 or higher for a conventional, VA or USDA loan, or 650 or higher for an FHA loan
- Are purchasing a single- to four-family home; condominium; modular home or manufactured home
- Are purchasing property situated on two acres or less, or five acres or less if in a rural area
In addition to checking off those boxes, all borrowers seeking an OHFA loan need to complete a free homebuyer education course.
This program can be used with a conventional or government-insured/guaranteed ( FHA, VA or USDA) loan. Browse a list of OHFA’s participating lenders to get started.
Ohio down payment assistance
OHFA YourChoice! Down Payment Assistance
Complementing the state’s mortgage program, OHFA’s YourChoice! Down Payment Assistance offers 2.5 percent to 5 percent of the home purchase price for a down payment, closing costs or other expenses. Borrowers don’t have to repay the funds provided they do not sell or refinance the property for seven years.
Borrower requirements:
- 640 minimum credit score for conventional, VA or USDA loan; 650 minimum credit score for FHA loan
- Must meet debt-to-income limit ratios for your loan type
- Must meet OHFA income and purchase price limits
- Must complete homebuyer education course
OHFA Grants for Grads
OHFA’s Grants for Grads program offers generous terms for college graduates, whose student loan debt makes saving for a home especially hard. Available to first-time homebuyers who have completed an associate’s, bachelor’s, master’s, doctorate or other post-graduate degree within the last four years, it provides mortgages at discounted rates, plus down payment assistance worth 2.5 percent to 5 percent of the home purchase price. Borrowers don’t have to repay the down payment assistance if they remain in the state of Ohio for at least five years.
Borrower requirements:
- 640 minimum credit score for conventional, VA or USDA loan; 650 minimum credit score for FHA loan
- Must meet OHFA income and purchase price limits
- Must meet debt-to-income limit ratio for your loan type
- Must have graduated with a qualifying degree within the last four years
Other Ohio homebuyer assistance programs
OHFA Ohio Heroes program
Depending on the type of work you do, you might be able to take advantage of OHFA’s Ohio Heroes homebuyer program, which offers a discount on your mortgage rate. This offering applies to repeat homebuyers as well as first-timers, but it’s especially valuable if you’re just starting to earn paychecks from any of the following jobs:
- Police officer, firefighter (volunteers included), EMT or paramedic
- Physician, nurse, nurse practitioner or STNA
- Teacher (pre-K through grade 12), administrator or counselor
The program is also open to veterans, active-duty military members, members of reserves and surviving spouses.
Borrower requirements:
- 640 minimum credit score for conventional, VA or USDA loan; 650 minimum credit score for FHA loan
- Must meet OHFA income and purchase price limits
- Must meet debt-to-income limit ratio for your loan type
- Must complete homebuyer education course
Mortgage Tax Credit
After you buy your first home, OHFA’s Mortgage Tax Credit program can play a role when it’s time to file your taxes. The IRS already allows you to deduct some of your mortgage interest, and this program can help you lower your tax bill even more. There are two options:
- Mortgage Tax Credit Plus – If you obtain a loan through OHFA’s first-time homebuyer program, you can score a tax credit of up to 40 percent of your mortgage interest, up to a maximum of $2,000. There’s a trade-off, though: You might pay a “slightly higher interest rate,” according to OHFA’s website.
- Mortgage Tax Credit Basic – If your loan is not via OHFA, you can still apply for the tax credit, but it will be smaller: 30 percent of your mortgage interest for a bank-owned property; 25 percent for a property in a target area; and 20 percent for all other properties.
Local homebuyer assistance programs
Depending on where you’re aiming to buy, you may be able to qualify for locally-operated financial help. For example, Cuyahoga County, which surrounds the city of Cleveland, offers down payment assistance up to 10 percent of the purchase price for low- to moderate-income first-time buyers. Toledo offers a similar program with down payment funds up to $7,500 or even $9,500, depending on the part of the city you’re hoping to buy into.
Other Ohio first-time homebuyer loans
- FHA loans: Loans backed by the Federal Housing Administration can be a great match for first-time buyers with limited or less-than-perfect credit: With a 580 credit score, you may be approved to put down just 3.5 percent of the purchase price, and with a credit score between 500 and 579, you can put down 10 percent of the purchase price.
- VA loans: Loans backed by the Department of Veterans Affairs are a valuable benefit for service members, veterans and eligible spouses. There is no down payment requirement, and lenders tend to accept lower credit scores while offering some of the most competitive rates available.
- USDA loans: If you aren’t trying to buy a home in one of Ohio’s major metropolitan areas, see if the location where you want to live is eligible for a loan backed by the United States Department of Agriculture. These loans do not require a down payment, but you will likely need a credit score of 640 or higher.
Get started
Ready to explore your options as a first-time homebuyer in Ohio? Your first step is to determine your eligibility. You can use this simple questionnaire from OHFA to find out if you qualify. If you do, be sure to compare a range of options from different mortgage lenders — in some counties, OHFA works with 48 different lenders. Each of these can have different interest rates and terms, so carefully compare and consider your choices. If you’re eyeing a place in the Buckeye State, you can also compare mortgage rates in Ohio through Bankrate.
