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Cincinnati, OH - First Time Home Buyer

First Time Home Buyer Programs in Cincinnati, Ohio
Mortgage Loan Options - Down Payment Assistance

Cincinnati, OH – First Time Home Buyer Programs

Are you a first time home buyer looking to purchase a home in Cincinnati, Ohio?  On this page you can learn about some of the different types of mortgage programs that are available to first time home buyers in Ohio.  You may also view down payment assistance programs that are currently being offered in Cincinnati, Ohio.

Cincinnati, OH – First Time Home Buyer Loans

Below are some mortgage programs that are available to first time home buyers.

Types of Mortgages:

  • Conventional Loans – Conventional loans offer the best loan terms to borrowers with good or excellent credit, as well as those who can afford to place a larger down payment.  If you are able to put 20% or more down, you will be able to avoid paying private mortgage insurance (PMI).  However, conventional loans also offer low down payment options, such as programs that only require 3% down.
  • FHA Loans – FHA loans are a good option for borrowers who may not be able to qualify for a conventional loan.  The qualification requirements for FHA loans are much more lenient than conventional loans.  This includes options for home buyers with credit scores as low as 500 (in order to qualify for a 3.5% down payment, you must have a credit score of at least 580).
  • USDA Loans – USDA loans provide home buyers the opportunity to purchase a rural home without any down payment.  These loans are intended for borrowers with low-to-moderate income.  In addition to not requiring any money down, you can also finance the closing costs into the loan.  This means you can essentially buy a home with no money out of pocket!
  • VA Loans – Active duty military members and veterans can apply for a VA loan which allows you to buy your first home without any down payment.  These loans are not available to the general public, but exclusively to military/veterans.
  • Jumbo Loans – Any mortgage that does not meet the conforming loan limits is a jumbo loan.  You can lookup the 2020 conforming loan limits for Hamilton County, OH (or any other county) using this conforming loan limits calculator.  If you want to buy a more expensive home, and have the income to qualify, jumbo lenders offer loan amounts up to $5,000,000.
  • Non-Prime Loans – If you do not qualify for any of the above types of loans, you may consider a non-prime or non-qm loan.  These programs are especially helpful to self-employed borrowers, and a variety of people with credit issues (such as low credit scores and/or a recent bankruptcy, foreclosure, or short sale).  Regardless of your situation, you may want to learn more about non-prime loans if you do not qualify for any of the other types of mortgages featured above.

These are some of the options that are available to first time home buyers.  If you would like to have a mortgage loan representative help you understand what options may be available to you, we can match you with a lender that offers first time home buyer loans in Ohio. The lender that we match you with will provide you with a free consultation, and also the opportunity to get pre-approved for a home loan.

Click here to have a mortgage lender contact you

Cincinnati, OH – Down Payment Assistance Programs  

First time home buyers in Cincinnati may be eligible to receive down payment assistance.  This includes programs that are offered throughout the entire state of Ohio, as well as a program offered exclusively in Cincinnati.  You can learn more about these programs below.

Cincinnati ADDI Program

First time home buyers in Cincinnati may receive up to $5,000 in down payment assistance through the American Dream Downpayment Initiative (ADDI).  The funds are provided in the form of a 5 year forgivable loan.  This means that after 5 years, the money will not need to be paid back (for each year you stay in the home, 20% of the $5,000 (which is $1,000) will be reduced from what is owed.  At the end of the 5 years, you will not owe anything, as long as you stayed in the home.

Requirements

  • Purchase a home within the city limits of Cincinnati.
  • Be a first time home buyer.
  • Provide proof of all sources of your income.
  • Complete a homebuyers counseling course.
  • The home purchase price may not exceed $138,000 for an existing home, and $224,000 for new construction.
  • Make 80% or less of the median average income (which these income limits are outlined below).

Income Limits

  • 1 person household – $41,850
  • 2 person household – $47,800
  • 3 person household – $53,800
  • 4 person household – $59,750
  • 5 person household – $64,550
  • 6 person household – $69,350
  • 7 person household – $74,100
  • 8 person household – $78,900

To learn more about this program, visit the city of Cincinnati website.

Your Choice! Down Payment Assistance

The Ohio Housing Finance Agency provides an opportunity to borrow 2.5% or 5.0% of the home price, which can be used for your down payment and mortgage closing costs.  The funds are provided as a second mortgage, which means that it is technically a loan.  However, after 7 years the lien will drop off, and you will not owe anything, just as long as you have not sold or refinanced the your mortgage.

Program Requirements

  • This program is only available in the state of Ohio.
  • You must be a first time home buyer (or have not owned a home in the last 3 years).
  • If you use a conventional, VA, or USDA loan, you must have a credit score of 640 or higher.  If you use an FHA loan, you must have a credit score of 660 or higher.
  • You must complete a homebuyer education course.
  • You must meet the income and purchase price limits for your county.

You can learn more about this program on the Ohio Finance Housing Agency website.

Ohio First Time Home Buyer Tax Credits

The Ohio Housing Finance Agency offers a Mortgage Tax Credit that allows homebuyers to receive tax credits for a portion of their mortgage interest (up to 40%, with a maximum of $2,000).  This is in addition to the IRS home mortgage interest reduction.  To be eligible for the tax credits, you must meet the following requirements:

  • Be a first time home buyer (or owned a home in the last 3 years).
  • Have a minimum credit score of 640.
  • You must meet the DTI ratio requirements for your mortgage.
  • Complete a homebuyer education course.
  • Finally, you must meet the income and purchase price limits, which are outlined below for Hamilton County.  The limits are based on either target areas, or non-targeted areas.  A target area is a census tract where the housing market is highly challenged.

Non-Targeted Area:

  • Income Limits – For a 1 or 2 person family: $81,300.  For a 3 or more person family: $93,495.
  • Purchase Price Limits – $283,349.

Target Area: 

  • Income Limits – For a 1 or 2 person family: $97,560.  For a 3 or more person family: $113,820.
  • Purchase Price Limits – $346,315.

Would you like to learn more about the Mortgage Tax Credit Program?

Get Matched with a Mortgage Lender

A loan representative can help you determine what mortgage programs you may qualify for, and also check your eligibility for down payment assistance.  If you would like to receive a free consultation, we can help match you with a mortgage lender that offers first time home buyer loans in Ohio.

Click here to have a mortgage lender contact you

First Time Home Buyer Questions 

Below are some of the most frequently asked questions about first time home buyer loans:

How much do I need for a down payment?
The minimum down payment requirement will depend on the type of mortgage program.  USDA and VA loans do not require any down payment.  FHA loans only require a 3.5% down payment (and allow down payment assistance to be used).  Conventional loans typically require either 3% or 5% down.   The minimum down payment for a non-prime loan is usually at least 10% (or higher).

What is the maximum loan amount that I can qualify for?
The amount that you will be allowed to borrow will depend mostly on your income, as well as the particular type of loan you are interested in.  There are maximum loan limits for each type of mortgage program which are set at the county level.  Conforming loan limits are the maximum loan amounts allowed for conventional mortgages.  FHA loans have their own loan limits.  This is not necessarily how much you can borrow though, but the maximum amount allowed in your location.  The amount that you can personal qualify for will be based upon your income, and how much debt you have.  For most loans, your monthly mortgage payment, along with your monthly debts may not exceed 43% of your income.

Can I buy a home without a real estate agent?
It depends on your state and the type of loan program.  For some states, you must use an agent.  In other states, you are not required to use a real estate agent for many loan program, such as conventional mortgages.  However, some loan types require that you use a real estate agent regardless of your location, such as USDA loans.

Are there mortgage loan options for borrowers with bad credit?
Yes, both FHA loans and non-prime loans are available to borrowers with lower credit score, and other credit challenges.  The minimum credit score required for an FHA loan is 500.  For non-prime loans, there are lenders that allow a borrower to have a credit score even below 500.  Non-prime loans also do not have any waiting periods after a bankruptcy.

Can I buy a home if I owe tax debt?
For government-backed loans, such as FHA, VA, and USDA loans, you can buy a home with tax debt as long as you have made a payment plan with the IRS, and are not behind on the payments. Any federal debt must be in good standing in order to get a government-based mortgage. If your tax debts have moved into the status of a tax lien, this will prevent you from getting a home loan until it is resolved.

Can I buy a home if I have student loans?
As long as you are not delinquent on the student loan payments, and the monthly payments do not cause excessive debt-to-income ratios, you can still get a mortgage.

Can I buy a home without my spouse?
A common question is if you can buy a house without your wife or husband.  The short answer is yes. There are numerous reasons someone may want to exclude their spouse from a mortgage application, such as lower credit, lack of job history or income, or one spouse having excessive debt that could prevent an approval. You may be able to qualify and get a home loan without your spouse.

How do I find out if I qualify for a mortgage?
It is easy to find out what mortgage programs you may qualify for.  We can match you with lender that offers free consultations, and they can help you get pre-approved (and also compare what options may be available to you).  To have a mortgage lender contact you, request to be matched with a lender.

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