North Carolina First Time Home Buyer Guide [2022] | 🏠 First Time Home Buyer Programs in NC {data, programs, tips, etc}

Are you ready to take the plunge and buy your first home? Whether you’re moving to Charlotte from another state or relocating within the metro area, you probably already know the challenges ahead of you. With a median home price of $370,000 in Charlotte and even higher for the state of North Carolina, a NC first time home buyer faces a major hurdle trying to save up for a down payment and closing costs. The Charlotte cost of living is lower than the national average, a factor that has helped the region’s population increase by over 20% in the past decade alone. There’s a lot of pressure on the housing market with limited inventory and seemingly ever-rising prices.

Fortunately, there are great first time home buyer programs in NC that make buying and owning a home more affordable. Here’s a look at the best mortgages, down payment assistance loans, and grants for first time home buyers in NC.

First Time Home Buyer Programs in NC – Tax Credits, Grants & Down Payment Assistance NC Options

NC first time home buyer down payment assistance comes in the form of 0% interest second mortgages and forgivable North Carolina first time home buyer grants to lower the hurdle of buying a home. You can even qualify for a tax credit to save up to $2,000 per year on federal taxes!

Community Partners Loan Pool (CPLP) NC Down Payment Assistance | NCHFA

CPLP is one of the best first time home buyer programs North Carolina offers. The downpayment assistance NC program offers:

  • Up to 20% in down payment assistance (capped at $30,000) when you get a NC Home Advantage Mortgage, or
  • Up to 10% down payment assistance when combined with a USDA Section 502 direct loan

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The CPLP down payment assistance is a 0% interest, deferred payment second mortgage. The silent second mortgage is repaid when the home is sold or at the end of the term.

You can combine this down payment assistance NC program with the NC Home Advantage Tax Credit, the 1st Home Advantage Down Payment program, or other loans or grants for first time home buyers in NC.

You must meet basic eligibility requirements:

  • Household income that does not exceed 80% of the Area Median Income in the county you’re buying a home
  • Minimum credit score of 640 (or 660 if buying new construction)
  • Satisfactory, stable income
  • Total debt to income ratio that does not exceed 43% and a housing ratio between 25% to 32%
  • Completed an approved home buyer education class with 2+ hours of housing counseling

To apply, you will need to work with a local CPLP member. Click here to search for an NCHFA community partner near you.

Mortgage Credit Certificate NC Program | NCHFA

As a 1st time home buyer, NC offers one of the best programs available to reduce your tax liability and make homeownership more affordable. This NC first time home buyer program is also available to military veterans!

The NC Home Advantage Tax Credit is a NC first time home buyer tax credit that gives you a federal tax credit of 30% of the mortgage interest you pay for as long as you live in the home and keep the mortgage. The credit is worth up to $2,000 per year.

To participate in the Mortgage Credit Certificate NC program, you must apply for it through the North Carolina Housing Finance Agency. There are basic eligibility requirements:

  • You are a military veteran, buying a home in a targeted census tract, or a first time home buyer in North Carolina
  • You are buying a home in North Carolina
  • You will occupy the home as your primary residence
  • You meet the sales price and income limits

The NC first time home buyer tax credit can be combined with the Home Advantage Mortgage which offers down payment assistance! However, it can’t be used with the NC 1st Home Advantage Down Payment program.

NC 1st Home Advantage Down Payment | NCHFA

1st Home Advantage is an NCHFA down payment assistance program available if you are a military veteran or a North Carolina first time home buyer. This North Carolina down payment assistance offers up to $8,000 when combined with the NC Home Advantage Mortgage below.

You can borrow up to $8,000 toward your down payment which takes the form of a silent, 0% interest second mortgage. It’s one of the best down payment assistance programs in NC because the loan is forgivable. 20% of your loan is forgiven every year between years 11 and 15. The NC down payment assistance is completely forgiven if you remain in your home without refinancing for 15 years.

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First Time Home Buyer NC Loans

These first time home buyer programs in NC offer mortgages designed specifically for first time buyers. This usually means a low, fixed interest rate that may be combined with down payment assistance!

NC Home Advantage Mortgage | NCHFA

The NC Home Advantage Mortgage is provided through the NCHFA to provide affordable home loan options to qualified buyers who meet income and credit requirements. It is not specifically a first time home buyers program; NC first time buyers and move-up buyers can qualify for a fixed-rate mortgage and up to 5% of the loan amount in down payment assistance.

However, the NC 1st Home Advantage Down Payment program is designed specifically for first time home buyers and military members. As noted above, it can be used with this home loan for up to $8,000 in down payment assistance. You may also qualify for the Mortgage Credit Certificate as a first time buyer.

Self-Help Loan Pool (SHLP) | NCHFA

The SHLP is one of the most unique grants for first time home buyers in NC, although it’s actually in the form of a primary mortgage. The program provides 0% interest mortgage financing for home buyers purchasing a home built or rehabbed by an SHLP nonprofit member. This is usually a local Habitat for Humanity program.

The SHLP member provides financing that uses a portion of HCHFA funds to give the buyer a single home loan. The mortgage is generally 20 to 30 years with a 0% interest rate. The SHLP member is typically the mortgage servicer who provides the agency with a pro-rata share of mortgage payments made.

A NC first time home buyer can receive up to $35,000 in financing. This program has the following eligibility requirements:

  • Household income at or below 80% of the Median Area Income
  • Complete approved home buyer education course and 2+ hours of pre-purchase counseling
  • Purchase a new or rehabilitated home from an SHLP member that is lower than the maximum sales price limit in the county

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Most SHLP members are Habitat for Humanity affiliates. Habitat for Humanity has several requirements for potential homeowners:

  • Need for housing
  • Ability to repay (income is 30-80% of the Area Median with debt limits)
  • Willingness to partner including completing 300+ sweat equity hours, completing Homeowner-in-Process education, and committing to a drug-free community without a serious criminal record

First Time Homebuyer’s Mortgage | State Employees’ Credit Union (SECU)

As a state employee and first time home buyer, NC SECU offers one of the best first time home buyer loans available. This special mortgage is for members who are first-time buyers, new employees of a NC state agency or public school system, or existing employees who are relocating for a new position.

Unlike other SECU home loans, this program allows you to finance up to 100% of your purchase price with a maximum loan amount of $500,000. You can receive up to $2,000 as an advance to help with closing costs.

Private mortgage insurance is not required and you will not pay application fees.

First Time Home Buyer Programs – Charlotte NC, Raleigh & Greensboro

Looking for additional programs for first time buyers in NC? While most statewide programs are offered by the NC Housing Finance Agency, you’ll find a number of city-based North Carolina first time home buyer grants and down payment assistance. In fact, most of the largest cities in North Carolina offer their own incentives for first time buyers. Here are the best first time home buyer grants NC cities offer.

House Charlotte Down Payment Assistance | City of Charlotte & DreamKey Partners

The HouseCharlotte Program is administered by DreamKey Partners on behalf of the City of Charlotte. As a first time home buyer in Charlotte, NC, you can qualify for one of five forgivable and deferred down payment assistance loans. The program also offers down payment assistance specifically for Charlotte Community Heroes including firefighters, EMTs, teachers, law enforcement, healthcare workers, and other essential workers.

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For Charlotte Community Heroes, this is one of the best North Carolina home buying programs with flexible options. The loan has a 5, 10, or 15-year term and it’s deferred and forgivable. That means you do not make payments on the loan, and it’s forgiven if you remain in your home for at least 10 years. At that point, the loan is converted into a grant. If you sell, transfer the home, or move out, a portion of the loan and accrued interest must be repaid. You can get up to $30,000 in down payment assistance through Charlotte Community Heroes.

For other home buyers, HouseCharlotte is still one of the best grants for first time home buyers in NC. The program offers 5, 10, or 15-year deferred and forgivable down payment and closing cost loans. You can receive $7,500 to $17,000 depending on your household income and whether you are buying a home in a high-cost neighborhood in Charlotte.

Note there are several eligibility requirements:

  • Maximum purchase price is $285,000 for existing homes and $315,000 for new construction
  • Household income must be 110% or less of the Area Median Income
  • You must buy a home within the Charlotte city limits for a primary residence

HouseCharlotte down payment assistance NC loans can be used for your down payment, closing costs (including credit repair or counseling), and interest rate buy down.

You can combine HouseCharlotte down payment assistance with NCHFA programs like the Community Partners Loan Pool (CPLP) above!

Greensboro Home Buyer Down Payment Assistance | Housing Connect GSO

This NC first time home buyer grant is available to first time buyers purchasing a home within the Greensboro city limits. You can receive up to $10,000 in closing cost and down payment assistance as a 5-year forgivable loan with 0% interest. The loan is forgiven at 20% for every year you live in the home. You can receive up to 20% of the purchase price in assistance.

As one of the most popular first time home buyer programs, Greensboro, NC provides an additional $5,000 if you buy a home in a redevelopment area which also waives the first time buyer requirement.

To qualify, you must meet income limits, complete an approved 8-hour in-person homebuyer education course, and make a minimum cash investment of $500.

Durham Down Payment Assistance | City of Durham & Community Home Trust

In March 2022, the City of Durham, NC announced a new down payment assistance program. The program is geared toward lower income buyers and it offers up to $20,000 in down payment assistance in the form of a forgivable 15-year loan with 0% interest.

To qualify, you must be a NC first time home buyer who has lived or worked in Durham for at least one year with household income at or below 80% of the Area Median Income and liquid assets of no more than $20,000.

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Homebuyer Assistance | City of Raleigh & DHIC

Looking for first time home buyer programs? Raleigh, NC offers a Homebuyer Assistance Program that helps with closing costs, down payments, and financing gaps for first time buyers in the City of Raleigh.

You can qualify for a 0% loan of up to $20,000. The loan is reduced on a schedule as long as you remain in the home as your primary residence and forgiven completely after 20 years.

To qualify, you must meet household income guidelines, occupy the home as a primary residence, and complete a homebuyer counseling course. The maximum purchase price is $275,000 for a new or existing home.

Wake County Affordable Homeownership Program | Downtown Housing Improvement Corporation (DHIC)

One of the most popular first time home buyer programs, Raleigh NC area home buyers can qualify for up to $20,000 in down payment assistance through the Affordable Homeownership Program. The program is offered by Wake County and DHIC but it’s only available for Wake County municipalities except Raleigh and Cary.

Home Ownership Assistance Program | City of Winston-Salem

Receive up to $14,800 (or 20% of the purchase price) in down payment assistance in the form of a second mortgage when you buy a home in Winston-Salem. To qualify, you must have household income at or below 80% of the Median Area Income and assets that don’t exceed $10,000. You must be a first time buyer, complete homebuyer counseling, and contribute at least $1,000 of your own funds.

This North Carolina first time home buyer grant is forgiven after 10 years if you remain in your home.

FAQs

What is down payment assistance?

Down payment assistance is a loan or grant that can be used to reduce the amount you need to put down when buying a home. This type of assistance is usually offered to first time home buyers. It usually involves a 0% interest deferred second mortgage with no payments required until you sell the home or move out, but there are first time home buyer grants NC offers that are forgiven after several years.

Who qualifies for down payment assistance in North Carolina?

NC down payment assistance is available to first time home buyers and military veterans. Many city programs also extend down payment assistance to essential workers (such as law enforcement, firefighters, teachers, and healthcare workers) and people buying a home in a targeted area.

Who is considered a first time home buyer in North Carolina?

A NC first time home buyer is someone who has not had ownership in a primary residence in the past 3 years. Displaced homemakers and single parents who only owned a home with a former spouse while married are also considered first time buyers.

 

Ready to make the dream of homeownership a reality? While we can’t help with programs for first time home buyers in NC or the daunting mortgage and home hunting process, we can make moving day easy and stress-free! Give us a call at Make a Move for a free, affordable moving quote once you’ve started the home buying process.

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