New Orleans Down Payment Assistance and First-Time Homebuyer Programs

Often called “The Big Easy,” New Orleans is one of the country’s most unique and iconic cities renowned for its vibrant culture, rich history, music scene, and distinct cuisine. It’s also known for its historic architecture and diverse neighborhood for residents and visitors. However, beyond these side attractions, New Orleans, like most urban cities, faces challenges related to affordable housing.

Are you looking to buy a home in New Orleans? On this page, we’ll break down home buyer programs that will help you become a home buyer.

Down payment assistance programs in New Orleans

Down payment assistance and first time home buyer programs aim to help home buyers make a larger down payment, cover closing costs, or a combination of both. There are several types of home buyer benefits, including grants, forgivable loans, and interest rate reductions and tax credits.

A grant is similar to a scholarship for college. You apply, and if you qualify for the program (i.e. meet all the criteria and the entity still has the money), you can receive funds toward your down payment or for another upfront cost related to your home purchase. 

A down payment loan (or second mortgage loan) is a loan you acquire in order to have the funds for a down payment. Many loan types require a minimum down payment between 3% and 20%. If you don’t have this money saved (many first-time home buyers don’t) then a down payment loan is an option to help you qualify. Some loans are even forgivable if you meet certain requirements like staying in the home for a few years.

Less commonly, some programs come with lower interest rates and tax credits (e.g., mortgage credit certificates) to help lower your monthly payments.

New Orleans Homeownership Programs

New Orleans residents can also explore a local homeowner assistance program. The Expand to Homeownership program by the Finance Authority of New Orleans grants eligible applicants up to 4% of the purchase amount. The program assists first-time homebuyers in bridging the gap between a home’s purchase price and the maximum first mortgage.

Assistance type: Deferred payment loan

Sponsor: New Orleans’ Finance Authority

Assistance amount: 4% of the purchase price

Purchase price limit: $324,000

Eligibility requirements

• Applicants for the Expand to Homeownership program must have income not exceeding $84,000 for FHA/VA loans or $99,000 for conventional loans.
• Eligible applicants must also complete homeownership training by approved training agencies.

Statewide down payment assistance programs available in New Orleans

Louisiana Housing Corporation

The Louisiana Housing Corporation (LHC) is a state agency dedicated to ensuring that all residents of Louisiana have access to safe and affordable housing. This agency offers several homeownership programs tailored to low and moderate-income individuals and families statewide.

LHC MRB Programs

The LHC’s Mortgage Revenue Bond Assistance and Home programs are designed to help prospective homebuyers who are at 80% AMI or less and may not have enough money to meet down payment and closing costs. 

Assistance type: Deferred payment loan

Sponsor: LHC

Assistance amount: Between 5% to 9% for the HOME program and 4% of the mortgage amount for the Assisted program

Eligibility requirements

• Applicants must be first-time homebuyers.
• Applicants must meet local income requirements.
• The minimum credit score required to be eligible is 640

LHC Premier Program

LHC also offers conventional and government mortgages through its Premier Program. This program is similar to the MRB option; however, it’s not limited to first-time homebuyers and can be used for new purchases only, with no refinances.

Assistance type: Deferred payment loan

Sponsor: LHC

Eligibility requirements

• Household income must be up to $99,000 based only on the applicant’s income.
• The property must be located in Louisiana
• Homebuyer education is required for first-time homebuyers

LHC Delta 100 Program

The Delta 100 Program is a $2 million, parish-specific program that assists some first-time homebuyers without traditional credit. However, applicants must have demonstrated the capacity, eagerness, and dedication to homeownership through alternate avenues.

Assistance type: Deferred payment loan

Sponsor: LHC

Assistance amount: Up to 3% for closing costs and prepaid items.

Minimum borrower contribution: 1% of purchase price or $1,500, whichever is less

Eligibility requirements

• First-time homebuyers only with no minimum credit score
• Must purchase single-family housing in the Delta Parishes
• Homebuyer education is required.

LHC MCC Program

LHC’s Mortgage Credit Certificate (MCC) program is a $5 statewide program designed to aid first-time homebuyers, veterans, and low to moderate-income buyers purchase homes in designated areas. The MCC program can be paired with any of LHC’s down payment assistance programs. Ultimately, this program aims to increase applicant’s disposable income, thereby increasing their eligible loan amount.

LHC Pathways to Homeownership program

LHC looks to bridge the affordability gap between the maximum amount a homebuyer can afford and the actual home price through the Pathways to Homeownership Soft Second program. The program offers assistance as a deferred payment loan, which will be forgiven if the homebuyer occupies the home for ten years.

Assistance type: Deferred payment loan

Sponsor: LHC

Assistance amount: 20% of the purchase price up to $55,000 and $5,000 for closing costs for a total of up to $60,000

Eligibility requirements

• Applicants must be a first-time homebuyer without a primary residence in three years, a single parent, or a displaced homemaker.
• Applicants must have an annual household income at or below 80% of the Area Median Income (AMI)

LHC Preferred Conventional Program

In addition to down payment assistance, the Louisiana Housing Corporation offers residents the LHC Preferred Conventional Program. This program offers higher loan-to-value than FHA, increased income limits, and no upfront mortgage insurance premium. It covers some or all down payment, closing costs, and prepaid items.

Assistance type: Deferred payment loan

Sponsor: LHC

Assistance amount: Up to 4% of the total purchase price

Eligibility requirements

• The program is not exclusive to first-time homebuyers
• Applicants must fall within the program’s maximum income limit of $99,000 and credit score of at least 640
• First-time homebuyers are responsible for completing a homebuyer education course

Market Rate GNMA Program

Finally, residents can take advantage of LHC’s Market Rate GNMA program to cover the upfront costs of homeownership. This program can be paired with an FHA, VA, or USDA rural development loan to raise the funds needed to cover the down payment, closing costs, and prepaid items.

Assistance type: Deferred payment loan

Sponsor: LHC

Assistance amount: 4% of the total purchase price

Eligibility requirements

• All applicants must fall under 115% of the Area Median Income and have a minimum credit score of 640.
• Any home being purchased must be a single-family house located in Louisiana.

Disclaimer: This article is for informational purposes only and should not be considered as legal or financial advice. Please consult an attorney, mortgage lender, or CPA for guidance on your specific situation.