Dayton Down Payment Assistance and First-Time Homebuyer Programs

Dayton, known as “The Gem City,” is the sixth-most populous city in Ohio and is recognized for its rich aviation history and affordable economy. Dayton’s affordability extends to the housing scene, ranking among the nation’s top 10 for affordable homes. The housing market is also extremely competitive, with various assistance programs available.

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

Down payment assistance programs in Dayton

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.

Dayton Downpayment Assistance Program

The Dayton Down Payment Assistance Program is a partnership between the Home Ownership Center and the City of Dayton. This zero-interest, deferred second mortgage assistance requires no repayment unless the property undergoes sale, refinancing, ownership transfer, vacancy by the owner, or conversion into a rental or investment property.

Assistance type: Deferred Payment Loans

Sponsor: HomeOwnership Center and the City of Dayton

Assistance amount: 10% of the new home’s purchase price

Minimum borrower contribution: $500

Eligibility requirements

• Applicants must be first-time homebuyers with a total household income at or below 80% AMI.
• Applicants must also complete a pre-purchase appointment with a Homeownership Advisor and a required Homebuyer Class through the Homeownership Center of Greater Dayton.
• The program’s sponsors will conduct a mandatory local housing code inspection, and all identified structural problems will be taken care of prior to purchase.

Statewide down payment assistance programs available in Dayton

Ohio Housing Finance Agency

The Ohio Housing Finance Agency (OHFA) offers comprehensive housing assistance to low and moderate-income homebuyers through the Down Payment Assistance, Ohio Heroes, and Next Home programs.

The YourChoice! Down Payment Assistance program offers 30-year, fixed-rate conventional FHA, VA, and USDA-RD government loans. Applicants can choose either 2.5% or 5% of the home’s purchase price, with assistance applicable toward down payments, closing costs, or other pre-closing expenses.

On the other hand, the Ohio Heroes program rewards Ohio residents who serve the public with a discounted mortgage interest rate. Eligible applicants include active military members and veterans, security and medical emergency workers, healthcare professionals, teachers, administrators, and counselors.

Finally, residents can also opt for OHFA’s Next Home program, which provides 30-year, fixed-rate mortgages to those who are not first-time homebuyers. Available loans include conventional FHA, VA, and USDA-RD government loans. Homebuyers can pair this program with 2.5% YourChoice! Down Payment Assistance.

Assistance type: Forgivable Loans

Sponsor: Ohio Housing Finance Agency

Eligibility requirements

• Interested applicants must meet income and purchase price limits
• Applicants must meet credit score requirements; typically, at least 640 for conventional, USDA, and VA loans, and 650 for FHA loans.
• Qualified buyers are required to complete free homebuyer education by any HUD-approved counseling agency.

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.