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Toledo, OH - First Time Home Buyer Programs

Learn How to Get a Mortgage to Buy Your First Home in Toledo, Ohio
Mortgage Program Options - Down Payment Assistance - Frequently Asked Questions

Toledo, OH – First Time Home Buyer Programs

Are you looking to purchase your first home? Our Ohio first time home buyer programs might be the perfect solution to help you obtain the financing you need to purchase the home you desire. We provide excellent home financing options, and encourage you to compare our offered loan terms to other mortgage lenders.

Toledo, OH – First Time Home Buyer Loans

There are 5 types of first time home buyer loans.  You may select different loan terms, such as a fixed rate or adjustable rate mortgage, and the number of years to repay the loan (such as a 30 year fixed rate mortgage).

Types of Mortgages:

  • Conventional Loans – Conventional loans offer the best loan terms to borrowers with good or excellent credit (620 FICO or higher), 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 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 loan that does not meet the conforming or FHA loan limits is a jumbo loan.  Toledo is located in Lucas County, which has the following conforming loan limits:  Single unit: $484,350.  Two units: $620,620.  Three units: $749,650.  Four units: $931,600.  The FHA loan limits for Franklin County are as follows:  Single unit: $356,500.  Two units: $456,350.  Three units: $551,650.  Four units: $685,550.  If you want to buy a more expensive home, and have the income to qualify, we provide what are known as jumbo loans up to $2,000,000.

The above 5 types of loans are the main first time home buyer options that exist.  We can help you determine which loan is the right fit for you based on your particular needs and eligibility.

Toledo, OH – Down Payment Assistance Programs

First time home buyers in Toledo may be eligible for down payment assistance.  This includes a statewide program, as well as a program offered exclusively in Toledo.

City of Toledo Down Payment Assistance Grant

First time home buyers in the city of Toledo may be eligible to receive up to $6,500 in down payment assistance.  The funds are provided with a 5 year deferred loan term.  As long as you stay in the home for 5 years, you do not have to pay the money back.

Program Requirements

  • The home must be located in the City of Toledo.
  • Be a first time home buyer.
  • Complete a homebuyer education course.
  • You must contribute at least $500 from your own funds towards the down payment.
  • Meet the income limits, which are outlined below.

Income Limits

  • 1 person household – $37,650
  • 2 person household – $43,000
  • 3 person household – $48,400
  • 4 person household – $53,750
  • 5 person household – $58,050
  • 6 person household – $62,350
  • 7 person household – $66,650
  • 8 person household – $70,950

To learn more about this program, visit the City of Toledo 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.

Your 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.
  • You must meet the income and purchase price limits, which are outlined below.  The limits are based on either targeted areas, or non-targeted areas.  A target area is a census tract where the housing market is highly challenged.  You can view what areas are targeted on the map at the bottom of this page.

Non-Targeted Area:

  • Income Limits – For a 1 or 2 person family: $68,700.  For a 3 or more person family: $79,005.
  • Purchase Price Limits – $271,165.

Target Area: 

  • Income Limits – For a 1 or 2 person family: $82,440.  For a 3 or more person family: $96,180.
  • Purchase Price Limits – $331,423.

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

Frequently Asked Questions About Buying Your First Home

How much do I need for a down payment?
It depends on the type of loan you want.  USDA and VA loans often will not require any down payment.  FHA loans require a 3.5% down payment.  Conventional loans typically require either 3% or 5%.  If you receive down payment assistance, you may not need any money for your down payment.

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.

Do you have first time home buyer loans for bad credit?
Yes, we offer mortgage options for borrowers with bad credit. This includes FHA loans for bad credit, which you can possibly be approved with a credit score as low as 500. However, a 580 credit score is required for the 3.5% down payment. If your credit score is between 500-579, then you will need to put 10% down.

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 know if I am ready and prepared to own a home?
It is critical to consider the often unexpected expenses of buying a home. This includes repairs, maintenance, and of course furnishing the home, monthly utilities, and all other expenses that are associated with homeownership. A common mistake is to just look at the difference in rent to your total mortgage payment. Almost every year, you can expect to have to pay for various upkeep to keep the property functional. This can include anything from repairing a hot water heater that broke, to landscaping, and various maintenance.

Something else financial consultants advise is that you have at least 3 months of reserves. This means that you could afford to make your new mortgage payment for at least 3 months in the event that you lose a job or have some other unforeseen circumstance that the savings would be needed for. This is not a requirement for most home loans, but it is good advice to consider.

Have more questions about buying your first home?  Give us a call at 1-800-731-3560.

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