The AHFA or Alabama Housing Finance Authority offers the following down payment assistance programs and home purchase mortgage programs to help first time home buyers achieve the American Dream through home ownership.
The Alabama First Step Mortgage Program
This tax exempt Mortgage Revenue Bond program offers lower than market mortgage interest rates and low fees for fixed interest rate 30 year VA, FHA or Rural Development mortgages. This programs is designed for first time home buyers and low income home buyers. AHFA will provide a percentage of the home purchase price in down payment and closing cost assistance depending on the needs of the home buyer. This is financed over a 20 year term. To be eligible for this money you must use Rural Development or an FHA mortgage loan program.
The Alabama Step Up Program
The Step Up program is available throughout the state of Alabama. It is available year round and is available on a first come first serve basis. AHFA will provide no money down financing to qualified buyers that are using FHA or Rural Development loans. In conjunction with the down payment money, AHFA is offering a 30 year fixed rate mortgage with an interest rate that is slightly higher than the market rate on mortgage loans.
A homebuyer using this program must complete a home buyer education program. You can earn up to $97,300 and still be eligible for the step up program. The down payment money is blended into the mortgage loan so there is only one check that you will have to write every month.
American Dream DownPayment Initiative
AHFA is offering the ADDI program to help reduce expenses for first time home buyers that have lower incomes. AHFA offers ADDI assistance at 0% interest that is a five year forgivable subordinate financing agreement. The $10,000 will be used to reduce the first mortgage loan by up to $10,000. To be eligible you may not have owned a home in the last three years.
Mortgage Credit Certificates
Mortgage Credit Certificates are not mortgages. This program is administered by the AHFA, a Mortgage Credit Certificate will reduce the amount of federal income taxes the homeowner will have to pay. This will give the borrower more income to use to qualify for a home. The IRS and the federal government allows every homeowner an income tax deduction for all the interest paid each year on a mortgage loan. But an Mortgage Credit Certificate provides a tax credit of 20%. The tax credit that is provided by the MCC will simply help the homeowner increase their disposable income to be able to qualify for a loan as well as meet the monthly mortgage obligation.
Habitat For Humanity Loan Purchase Program
The state of Alabama, the AHFA and Habitat for Humanity offer the Habitat for Humanity Loan Purchase Program as an innovative statewide collaboration between local Habitat for Humanity Affiliates and the AHFA. The program provide families in need with no interest and no down payment mortgages. The AHFA will buy the mortgages from Habitat for Humanity so they can build more homes.
(New site)