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First Time Homebuyers in Alabama Need to Know This!

First Time Homebuyers in Alabama Need to Know This!

If you want to buy a house with low income in Alabama, there is help available to you! There are many programs that will assist you with tax reductions, down payment assistance and so much more! Since there are several different types of assistance for low income home buyers in Alabama, we’ve organized this list by type as much as possible.

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Alabama residents can qualify for special first time home buyers assistance programs.

Step Up is a statewide homeownership program for low and moderate income first time home buyers. This program provides 3% down payment assistance and other benefits for eligible homeowners.

Mortgage Credit Certificates provide tax credits to homeowners. These tax credits can reduce the amount of federal taxes owed by a percentage of the annual mortgage interest paid each year.

Housing counseling agencies can assist you with home buyer education workshops, home improvement services and more! These agencies can be found all across Alabama. Here’s a HUD list with contact information for agencies in Andalusia, Auburn, Birmingham, Cullman, Decatur, Florence, Greensboro, Greenville, Hayneville, Huntsville, Jasper, Millbrook, Mobile, Montgomery, Moulton, Ozark, Prichard, Russellville, Rutledge, Sheffield, Troy, Tuscaloosa and Union Springs.

Some Alabama communities offer special first time home buyer programs!

Birmingham is home to Neighborhood Housing Services, an agency that provides home buyers classes and up to $7,500 in down payment assistance for low-to-moderate income first time home buyers. They also offer affordable rehabilitated homes to low income buyers who complete budget management and credit counseling programs.

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Birmingham students who participate in Build UP (Urban Prosperity) Birmingham can also graduate as homeowners! This program helps low income ninth-graders earn a high school diploma and an associates degree, while also training as construction workers through paid apprenticeships! At least part of their learning comes from remodeling homes in their neighborhood, which they can later move into and even have the chance to purchase!

Decatur offers a Home Ownership Made Easier (HOME) program that can pay up to half of the minimum required down payment or the entire minimum required closing costs, including some prepaid expenses. To qualify, the home that is being purchased must be located in Decatur city limits.

Huntsville provides assistance through the HOME program and the Down Payment Assistance Program. These two programs are vastly different.

The HOME Ownership Program provides newly constructed homes in specific neighborhoods to qualifying low income applicants. As of this writing, these homes are located in the Terry Heights and Lowe Mill neighborhoods. The homes have 3 bedrooms and 2 bathrooms. They are designed with an open floor plan. The homes are sold for just $69,000 with monthly payments as low as $430.

The Down Payment Assistance Program (DAP) can provide $5,000 toward the down payment and closing costs for certain applicants. You must commit to living in the home for at least five years to qualify for these funds.

Mobile County provides up to $10,000 in down payment assistance to home buyers. If you buy a newly constructed home, you may qualify for up to $30,000 in a New Construction Affordable Home Loan! The home loans are deferred and forgiven in equal monthly amounts over a set term.

Montgomery periodically offers down payment assistance of up to $5,000. These grants are usually very limited. Contact the Montgomery Community Development office for more information.

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Prichard provides credit counseling, employment counseling, down payment assistance, job training and so much more through the Housing Authority of the City of Prichard (HACP). The amount of down payment assistance is not specified.

Tuscaloosa offers home buyer assistance through HOME funds. These funds can also be used for home repair, building, and other property services.

Get MORE help in Alabama!