North Carolina Down Payment Assistance and First-Time Homebuyer Programs

Buying a home can be a major milestone in life, but it’s not easy to reach this mark. Fortunately, first-time homebuyers in North Carolina, as well as others like military veterans and low-to-moderate-income buyers, may be eligible for one or more down payment assistance or other homebuying programs that make this milestone more affordable.

Disclaimer: This article is for informational purposes only and should not be considered as legal or financial advice. Information is subject to change and should not be considered a guarantee of accuracy. Programs may have additional eligibility requirements beyond what’s listed in this article. Please consult an attorney, mortgage lender, or CPA for guidance on your specific situation and verification of program details.

Types of assistance for first-time homebuyers in North Carolina

In North Carolina, first-time homebuyer assistance from the North Carolina Housing Finance Agency generally falls into three categories:

1. Down payment assistance via forgivable loans
2. Tax credits
3. Mortgage loans at competitive, fixed rates

First-time homebuyers in North Carolina who meet eligibility criteria can qualify for a mix of these assistance types, but certain programs can not be combined, as explained below.

North Carolina down payment assistance programs

North Carolina has two main down payment assistance programs for first-time homebuyers, though certain programs can also apply to move-up buyers and/or military veterans. These down payment assistance programs include:

NC Home Advantage Mortgage™

While the name might not imply down payment assistance, the NC Home Advantage Mortgage program from the North Carolina Housing Finance Agency does have a down payment assistance component to it.

In addition to facilitating fixed-rate mortgage loans through participating lenders, the NC Home Advantage Mortgage program provides qualified homebuyers with up to 3% of the mortgage amount as an interest-free loan for down payment assistance, forgivable if recipients do not sell, refinance or move out of the home within the first 15 years.

Both first-time buyers and move-up buyers can be eligible for the program when applying through participating lenders for an FHA, USDA, VA or conventional loan.

An NC Home Advantage Mortgage can be combined with either the NC 1st Home Advantage Down Payment or NC Home Advantage Tax Credit, but not both.

Assistance type: Deferred 0% loan, forgivable by 20% per year at the end of years 11-15, 100% forgivable at the end of 15 years

Sponsor: North Carolina Housing Finance Agency

Assistance amount: Up to 3% of loan amount

Purchase price limit: Based on sales price limit of loan type (FHA, USDA, VA or conventional loan)

Minimum borrower contribution: None

Eligibility requirements:

• First-time or move-up homebuyer and legal U.S. resident purchasing primary residence in North Carolina (occupied within 60 days of closing)
• Income ≤ $134,000
• Minimum credit score of 640 (660 for new manufactured homes)
• First-time homebuyers must complete homebuyer education

NC 1st Home Advantage Down Payment

Another form of down payment assistance is the NC 1st Home Advantage Down Payment program, which is specifically for first-time homebuyers, military veterans or those buying in targeted census tracts in North Carolina. This program provides up to $15,000 in down payment assistance for those who qualify and use an NC Home Advantage Mortgage, but not the NC Home Advantage Tax Credit.

Assistance type: Deferred 0% loan, forgivable by 20% per year at the end of years 11-15, 100% forgivable at the end of 15 years

Sponsor: North Carolina Housing Finance Agency

Assistance amount: Up to $15,000

Purchase price limit: $480,000

Minimum borrower contribution: None

Eligibility requirements:

• First-time homebuyer, military veteran or purchaser in targeted census tracts in North Carolina
• Legal U.S. resident, purchasing primary residence in North Carolina (occupied within 60 days of closing)
• Within sales price and income limits based on county (e.g., $117,000 income limit for 1-2 person household in Wake County)
• Minimum credit score of 640 (660 for new manufactured homes)
• Use NC Home Advantage Mortgage
• First-time homebuyers complete homebuyer education

North Carolina first-time homebuyer tax credits

North Carolina also has a statewide program that provides tax credits for federal tax returns through what’s known as a Mortgage Credit Certificate (MCC). These tax credits can be used alongside the NC Home Advantage Mortgage, but not the NC 1st Home Advantage Down Payment.

NC Home Advantage Tax Credit

The NC Home Advantage Tax Credit program provides up to $2,000 per year in federal tax credits for first-homebuyers, military veterans, and those buying in targeted census tracts in North Carolina.

Homebuyers can apply for an MCC through the NC Housing Finance Agency when applying for a mortgage. If approved, you can take up to 30% of mortgage interest paid annually (up to 50% for new construction) as a federal tax credit, up to $2,000 per year. And you can still take the remaining amount of mortgage interest paid as a deduction if itemizing.

Assistance type: Tax credits

Sponsor: North Carolina Housing Finance Agency

Assistance amount: Up to $2,000 per year

Purchase price limit: $480,000

Eligibility requirements:

• First-time homebuyer, military veteran or purchaser in select census tracts in North Carolina
• Legal U.S. resident, purchasing primary residence in North Carolina (occupied within 60 days of closing)
• Loan reviewed and approved by the NC Housing Finance Agency before closing, with MCC applied for and approved before purchasing
• Within sales price and income limits based on county (e.g., $117,000 income limit for 1-2 person household in Wake County)
• Minimum credit score of 640 (660 for new manufactured homes)

North Carolina first-time homebuyer loans

As mentioned earlier, the NC Home Advantage Mortgage has both a down payment assistance and mortgage assistance component. In addition to the down payment assistance technically being a loan, this program also helps qualified first-time homebuyers and move-up buyers, by providing access to mortgage loans at competitive, fixed interest rates.

These loans are all 30-year, fixed-rate mortgages that have no discount points.

To qualify for an NC Home Advantage Mortgage, borrowers apply through participating lenders via the North Carolina Housing Finance Agency.

Loans can either be Conventional, FHA, VA or USDA mortgages, though borrowers need to meet eligibility requirements of both the specific loan type they’re applying for as well as the Housing Finance Agency’s criteria, which include:

• Being a legal U.S. resident purchasing a primary residence in North Carolina that’s occupied within 60 days of closing
• Having an annual income that does not exceed $134,000
• Having a minimum credit score of 640, or 660 for new manufactured homes

North Carolina Community Home Buying Programs

North Carolina also has homebuying assistance for low-to-moderate income buyers in North Carolina — those with incomes below 80% of their county’s area median income — through the Housing Finance Agency’s Community Home Buying Programs. You don’t have to be a first-time homebuyer to participate in these programs, which include:

Community Partners Loan Pool (CPLP)

The Community Partners Loan Pool (CPLP) provides down payment assistance to low- and moderate-income homebuyers when combined with the NC Home Advantage Mortgage or a USDA Section 502 Direct loan.

Assistance type: 0% balloon loan, deferred for the life of the first mortgage

Sponsor: North Carolina Housing Finance Agency

Assistance amount: The lesser of up to 25% of the sales price or $50,000 with an NC Home Advantage Mortgage; up to 10% of the sales price with a USDA Section 502 loan

Minimum borrower contribution: $500

Purchase price limit: Varies by county, e.g., $371,000 in Wake County

Eligibility requirements:

• Combined with NC Home Advantage Mortgage or a USDA Section 502 Direct loan
• Applied for assistance through CPLP member (approved nonprofit or local government housing agency)
• Within sales price and income limits based on county (e.g., $90,650 income limit for 4-person household in Wake County)
• Complete at least 6 hours of homebuyer education and 2 hours of 1-on-1 counseling before purchasing
• Minimum credit score of 640

Self-Help Loan Pool (SHLP)

The Self-Help Loan Pool (SHLP) program partners with Habitat for Humanity affiliates and other self-help housing nonprofits to provide low- and- moderate-income purchasers of these self-help homes in certain areas with shared mortgage financing.

Assistance type: 0% interest shared mortgage financing

Sponsor: North Carolina Housing Finance Agency

Assistance amount: Up to $50,000 (since January 1, 2023, up to $35,000 in certain areas)

Purchase price limit: Varies by county, e.g., $371,000 in Wake County

Eligibility requirements:

• Participate in constructing or rehabbing home being purchased
• Within sales price and income limits based on county (e.g., $90,650 income limit for 4-person household in Wake County)
• Complete at least 6 hours of homebuyer education and 2 hours of 1-on-1 counseling before purchasing

North Carolina Local Down Payment and Homebuying Assistance Programs

In addition to first-time homebuyer programs from the North Carolina Housing Finance Agency, you may be eligible for additional assistance through local programs. For example, the North Carolina Housing Coalition’s Homeownership Assistance Program provided down payment assistance in 16 counties most affected by Hurricanes Matthew and Florence. However, the program has been paused indefinitely since April 17, 2023, though you may want to see if additional funds have been made available by the time you’re ready to purchase a home.

Additional examples of local homebuyer programs in North Carolina include:

Raleigh Homebuyer Assistance

In Raleigh, first-time homebuyers can potentially qualify for one of two programs, via an approved lender, to help with a down payment, closing costs, or financing gaps, as the city of Raleigh explains.

Raleigh Homebuyer Assistance Program

Assistance type: Deferred 0% interest loan, forgivable after 30 years

Sponsor: City of Raleigh

Assistance amount: Up to $45,000

Purchase price limit: $371,000

Minimum borrower contribution: $500

Eligibility requirements:

• First-time homebuyer purchasing in Raleigh city limits
• Household income ≤ 80% area median income (up to $90,650 for a 4-person household)
• Complete homebuyer education and counseling through DHIC

Enhanced Homebuyer Assistance Program

In select areas, Raleigh’s Enhanced Homebuyer Assistance Program provides additional first-time homebuyer assistance. The details include:
 
Assistance type: Deferred 0% interest loan; 50% forgiven after 10 years, with balance due at 30 years

Sponsor: City of Raleigh

Assistance amount: Up to $60,000

Purchase price limit: $450,000

Minimum borrower contribution: $500

Eligibility requirements:

• First-time homebuyer purchasing in select areas of Raleigh (see interactive mapping tool to confirm eligibility)
• Household income ≤ 80% area median income (up to $90,650 for a 4-person household)
• Complete homebuyer education and counseling through DHIC

Wake County Affordable Homeownership Program

Some first-time homebuyers in Wake County might qualify for up to $50,000 in forgivable loans through the Wake County Affordable Homeownership Program, administered by the nonprofit DHIC. At this time, funds are not available for this program, but DHIC notes that it will inform its lender partners as funds become available; buyers must go through one of these lenders to obtain assistance. The program is also not available in Raleigh or Cary.

Assistance type: Deferred 0% interest loan, 25% forgiven every five years

Sponsor: Wake County

Assistance amount: Up to $50,000

Purchase price limit: None

Minimum borrower contribution: $1,000

Eligibility requirements:

• First-time homebuyer purchasing in Apex, Fuquay-Varina, Garner, Holly Springs, Knightdale, Morrisville, Rolesville, Wake Forest, Wendell or Zebulon
• Household income ≤ 80% area median income (up to $90,650 for a 4-person household)
• Minimum 640 credit score
• Complete homebuyer education and counseling through DHIC

House Charlotte

Another type of local homebuying assistance is the House Charlotte program from the City of Charlotte, administered by DreamKey Partners. This program, which is not exclusive to first-time homebuyers, provides interest-free, forgivable loans, depending on income limits. The loans can be used for assistance with down payments, closing costs, and interest rate buydowns. House Charlotte assistance must be requested through the program’s approved lenders.

Assistance type: Deferred 0% interest loan; forgivable at either 16 or 31 years, depending on income limits

Sponsor: City of Charlotte

Assistance amount: Up to $10,000 or $30,000, depending on income limits, and up to an additional $50,000 for a pilot program in select areas

Purchase price limit: $300,000 for existing properties; $315,000 for new construction

Eligibility requirements:

• Purchasing primary residence in the City of Charlotte (see interactive mapping tool to confirm eligibility)
• Complete a minimum of 8 hours of homebuyer education and counseling via an approved agency before closing

Household income ≤ 80% area median income (up to $79,750 for a 4-person household) for up to $30,000 in assistance (and in select areas up to an additional $50,000 for pilot program); household income above 80% and ≤ 110% (up to $109,650 for a 4-person household) for up to $10,000 in assistance

National down payment assistance programs and grants you can use in North Carolina

Homebuyers in North Carolina might also be eligible for down payment assistance, such as the program sponsored by the National Homebuyer Fund (NHF).

NHF Down Payment Assistance Program

The NHF Down Payment Assistance Program provides down payment assistance via a loan that can potentially be forgiven if you keep the purchased home as your primary residence for a given number of years, as determined at closing.

Assistance type: Forgivable loan

Sponsor: National Homebuyer Fund

Assistance amount: Up to 5% of the mortgage amount

Purchase price limit: Flexible, based on buyer’s income

Minimum borrower contribution: None

Eligibility requirements:

• Credit score of 600 or higher
• Income limit of 115% of median income in area where home is purchased

In addition to this national downpayment assistance program, you could potentially qualify for a lender-sponsored assistance program, such as through one of the nation’s largest banks. These programs vary among different lenders. Stairs Financial does not endorse any single lender-sponsored down payment assistance program over the next.

North Carolina down payment assistance and first-time homebuyer FAQs

If you want a quick rundown of what to know about down payment and first-time homebuyer programs in North Carolina, take a look at these FAQs:

Does North Carolina have a first-time buyer program?

Yes, North Carolina has several first-time homebuyer programs. Some of the most notable ones include programs from the North Carolina Housing Finance Agency, such as forgivable down payment assistance loans and federal tax credits. Local programs can also help, such as those that provide forgivable loans or no-interest deferred loans.

How to buy a house for the first time in North Carolina with the help of homebuying programs?

If you want to buy a house for the first time in North Carolina, you’ll likely take first steps such as reviewing your annual income and credit score to see which programs you’re eligible for. You can also look at purchase price limits to find homes within eligibility rules, and take homebuyer education and counseling if needed to qualify for down payment assistance or a homebuying program that can save you money.

To get a better sense of which programs you qualify for and to get connected to a lender that can help you apply for North Carolina programs, you can use our free mortgage marketplace.

What is the minimum down payment in North Carolina?

The minimum down payment in North Carolina depends on the type of loan, but the NC Home Advantage Mortgage, for example, requires a 3.5% down payment. However, you might find that certain down payment assistance programs help you buy a home for less upfront.

Can you get Biden first-time homebuyer assistance in North Carolina?

If Biden’s proposed first-time homebuyer programs become law, then yes, the Biden $25,000 Downpayment Toward Equity Act of 2021 and Biden’s First-Time Homebuyer Tax Credit would be available nationwide, including North Carolina, based on current proposals.

What types of North Carolina first-time homebuyer assistance are there?

North Carolina has three primary statewide programs for first-time homebuyers (and some others that meet eligibility requirements); two of these programs provide down payment assistance through forgivable loans, and the other provides up to $2,000 per year in federal tax credits.

What are the North Carolina first-time homebuyer program income limits?

Many North Carolina first-time homebuyer programs have income limits of 80% of area median income, but the NC Home Advantage Mortgage, for example, has an income limit of $134,000, which might differ from that 80% mark, depending on location and household size.

What are the first-time homebuyer program requirements in North Carolina?

First-time homebuyer program requirements in North Carolina commonly include:

• A minimum credit score of 640
• Being a legal U.S. resident
• Completing homebuyer education

However, not all programs have these exact requirements, and there can be several additional requirements based on the program. Take a look at the program sponsor’s website and contact your lender or other trusted professionals for more details.

How do I qualify for North Carolina first-time homebuyer programs?

Qualifying for North Carolina first-time homebuyer programs often requires falling within certain income limits, as defined by different programs. For example, the NC Home Advantage Mortgage program has an income limit of $134,000. You also often have to go through a program-approved lender to qualify. Check the specifics for the programs you’re interested in.

Find out which programs you qualify for

Stairs Financial streamlines your access to down payment assistance, making it easy for you to connect with a trusted lender and compare the loan and assistance programs you may qualify for, all in one place.