Alabama Downpayment Programs And First Time Homebuyer Programs — An Update

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 Step Up Program

The Step Up program is designed for moderate income home buyers who can afford a mortgage but need help with a downpayment.

AHFA will provide no-money-down financing to qualified buyers with no sales price limits and higher income limits.

In conjunction with the down payment money, AHFA is offering a 30 year fixed rate mortgage.

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.

Mortgage Credit Certificates

Mortgage Credit Certificates give Alabama’s low to moderate income families another way to achieve homeownership.

Mortgage Credit Certificates can be combined with the Step Up program to make homeownership more affordable.

A Mortgage Credit Certificate will reduce the amount of federal income taxes the homeowner will have to pay. It provides a direct reduction of federal taxes of 20% of the mortgage interest paid each year. The remaining 80% can still be claimed as a tax deduction.

Habitat For Humanity

Working with Habitat for Humanity, AHFA purchases mortgage loans from Alabama’s Habitat affiliates.

This process allows the affiliates to receive the loan in a lump sum while AHFA receives payments from the affiliates for the life of the loan.

The affiliates then use the money to build more housing for low-income families.

AHFA and Habitat work with local lenders who act as conduits for the loans, making the program a productive cycle while helping families achieve homeownership.

The Alabama First Step Mortgage Program

First Step funds are not available at this time.