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There are plenty of reasons to call Ohio home, from the cosmopolitan pleasures of Cincinnati to the bucolic beauty of the Amish Country. If you’re a first-time homebuyer in Ohio, the Ohio Housing Finance Agency (OHFA) offers a range of options to make moving there a more affordable reality. The home you’re buying doesn’t technically need to be the first property you’ve ever purchased either; you simply can’t have owned a home within the last three years in order to be eligible.
Ohio first-time homebuyer loan programs
OHFA mortgage programs
The Ohio Housing Finance Agency (OHFA) works with mortgage lenders to offer a variety of loans suitable for first-time homebuyers, including:
To qualify, first-time buyers need to satisfy a number of requirements:
- Your income and the purchase price of the home must be within OHFA’s income and purchase price limits, which vary based on where you live. In Franklin County, for example, the income limits for conventional loan products range from $115,320 to $134,540, while the purchase price limit is $349,526 in non-target areas and $427,198 in target areas. (If you know the address of a specific property, you can use the state’s look-up tool to see if it’s in a target or non-target area.)
- You must meet the debt-to-income ratio requirement (which varies based on type of loan).
- Your credit score must be 640 or higher for a conventional, VA or USDA loan, or 650 or higher for an FHA loan.
- The home must be a single- to four-family home; condominium; modular home or manufactured home.
- The home must be 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.
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 complete homebuyer education course
Ohio down payment assistance
OHFA YourChoice! Down Payment Assistance
OHFA’s YourChoice! Down Payment Assistance offers 2.5 percent to 5 percent 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 OHFA income and purchase price limits
- Must complete homebuyer education course
OHFA Grants for Grads
You might be staring down some student loan debt, but OHFA’s Grants for Grads program can make owning a home a more manageable expense. This program is for first-time homebuyers who have completed an associate’s, bachelor’s, master’s, doctorate or other post-graduate degree within the last four years, and offers forgivable down payment assistance worth 2.5 percent to 5 percent and a discounted mortgage rate. 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 have graduated with a qualifying degree within the last four years
Other Ohio homebuyer assistance programs
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
If you’re buying a home in Columbus and your income is 80 percent or below the area median income (AMI), the American Dream Downpayment Initiative can give you up to $7,500 of assistance with your down payment in the shape of a deferred, forgivable loan; you must live in the residence for five years. A similar program in Toledo can help you get $7,500 worth of down payment assistance.
Other first-time homebuyer loan programs
Ohio’s state housing finance authority isn’t the only place to find help as a first-time homebuyer. You can expand your search for monetary assistance to national resources, which can help you get money to cover closing costs, buy a home with a significantly smaller down payment, score major savings on properties in designated revitalization areas, and more. Check out Bankrate’s guide to these other first-time homebuyer loans and programs.
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 more than 20 different lenders. Each of these can have different interest rates and terms, so carefully consider your choices. You can also compare mortgage rates in Ohio through Bankrate.
