Buying a home for the first time is a huge milestone — and an exciting one! But first time home buyers often don’t have the earnings or savings longevity to make a traditional 20% down payment. Fortunately, there are many first time home buyer programs available to Ohio natives that can help.
Here in Dayton, home ownership is on the rise. The U.S. Census’ Housing Vacancies and Homeownership survey found that the city’s homeownership rate has increased to 71.4%, its highest rate since the mid-1980s.
If you’re a first time home buyer moving to the Dayton area, this article is for you. We’ll walk through 8 down payment assistance programs that can help you afford a home in a Dayton community you love.
- Ohio Housing Finance Agency offers several first time home buyer programs, including some specifically for recent college graduates, veterans, and public servants.
- Most first time home buyer programs in Ohio require a minimum credit score of 640 or 650.
- First time home buyer programs in Ohio have maximum income levels that vary by county and program.
- Many programs have a minimum length of residency requirement (ranging from 2-3 years to 7 years) before the assistance repayment obligation is forgiven.
- Communities First Down Payment Assistance is one program that does not have a minimum length of residency requirement.
Statewide first time home buyer programs in Ohio
Your Choice! Down Payment Assistance
Your Choice! Down Payment Assistance program helps specifically with down payment and closing costs. Qualifying buyers can choose either 2.5% or 5% of the total cost of the home and must live in their home for 7 years in order for the assistance to be forgiven.
Here’s a rundown of Your Choice! eligibility requirements:
- Income limits vary by county. In Dayton, they’re as follows:
- Maximum Income: $90,840 (1 or 2 person families) and $105, 980 (3 or more person family)
- Maximum purchase price: $381, 308 (target new and existing homes) and $311,980 (non-target new and existing homes)
- Credit score minimum 640 (USDA and VA loans) or 650 (FHA loan)
- Meet debt to income ratio for your loan type
*Target areas are areas federally designated as experiencing slow economic growth.
Ohio Mortgage Tax Credit
The Ohio Mortgage Tax Credit isn’t exclusively for first time home buyers, but it definitely helps when you’re budgeting for your first home. The Ohio Housing Finance Agency (OHFA) provides homebuyers with a federal tax credit on their paid mortgage interest, offering up to $2000 in tax savings per year.
To qualify, homebuyers must have a tax liability. The total of the tax credit is determined by the location, property and type of mortgage. Homebuyers with a loan through the OHFA receive a 40% tax credit on mortgage interest.
Homebuyers with other types of mortgages can earn a 30% credit for the purchase of a bank owned property, 25% credit for homes purchased in target areas, and 20% credit for homes in all other areas.
Other requirements from OHFA include:
- You have not owned or had an ownership interest in your primary residence in the last three years.
- You meet debt to income ratios for your loan type.
- You meet income and purchase price limits (same as Your Choice!)
- You meet credit score requirements (same as Your Choice!)
*There are no credit score requirements for the Mortgage Tax Credit Basic Program.
Communities First – Down Payment Assistance
Communities First is a grant program offering down payment assistance in the amounts of 3%, 4%, or 5% of total home purchase price. It’s more flexible than some of the previous programs we covered in that it has no restrictions on reselling or refinancing and no minimum length of occupancy.
It does, however, also have income limits by individual (not household) that vary by county. In Dayton and Montgomery County the maximum qualifying income is $87,055.
Homebuyers can apply in the following three steps:
Other requirements for the Communities First grant are:
- Have a maximum debt-to-income ratio of 45% (subject to change)
- Have a minimum FICO credit score of 640 (subject to change)
- Occupy the property as your principal residence within 60 days
Ohio public servants can qualify for discounted mortgage interest rates through the OHFA’s Ohio Heroes rewards program. Homebuyers in the following careers are eligible:
- Veterans, active duty military, and military reserves
- Police officers, firefighters, EMTs, and paramedics
- Physicians, nurses, nurse practitioners, and STNAs
- Teachers (pre-K through grade 12), administrators and counselors
Buyers must also meet the maximum income and purchase price requirements and minimum credit scores of the other OHFA programs.
Ohio Grants for Grads
OHFA incentivizes recent college graduates to make Ohio their home through the Ohio Grants for Grads first time home buyer program. The Grants offer 2.5% and 5% down payment assistance. The grant is forgiven after five years as long as you remain in the state of Ohio.
To qualify, homebuyers must have graduated within the last 48 months with an associate’s, bachelor’s, master’s, doctorate or other post-graduate degree from an accredited college or university. You also cannot have not owned or had an ownership interest in your primary residence in the previous three years.
Buying your first home in Dayton?
Dayton is a great place to live and work. If you’re moving to the Dayton area, Oberer Homes can help you find the home that’s right for you.
Contact us today to get started!
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