Alabama Housing Finance is the state agency which offers first time home buyer programs. The loan programs they offer are:

First Step

In this loan program as a first time home buyer you pay less than the normal mortgage interest rate. This feature is available on a 30-year FHA, VA, Rural Development and conventional home mortgages. You also benefit from a tax exemption.

It offers assistance for up to 6 percent of the home's sales price towards down payment and closing costs, which is to be repaid over a 20-year term.

Qualifications:
• First time home buyers with a low income level
• Income level must be 80% less that the state's median income to get interest free down payments.

Step Up

This loan program is specifically designed for moderate income families. It offers help in paying the home’s down payment and it is the first program in Alabama to offer this.
This program is available through the state through lenders and can offer up to 100% financing for those meeting income requirements. It is also applicable for people taking a FHA, Rural Development, or select "My Community" conventional mortgage loans.

Key points
• Moderate income families
• You can take this loan if you earn up to $97,300 and the size or location of your home does not matter.

American Dream Downpayment Initiative

Currently this loan program is not available, check with the state's website for status updates.

It was designed for buyers with low income levels and it offers $10,000 to reduce unexpected expenses that usually come up when buying a home.

Qualifications:
• You should not have owned a home in the past three years
• You should be able to meet the federal guidelines for household income
• The home's sales price must be less than $200,160.

Rural Alabama Mortgage Program

The objective behind this program is to help people in rural areas get affordable housing. It has been brought out through the joint efforts of the AHFA and USDA. Borrowers can get $2,000 in down payment funds that are interest-free, to help reduce up-front, out-of-pocket expenses.

Qualifications:
• Your home should fall within the 94,000 to $110,000 price range.

For further details on available loan program visit http://www.ahfa.com/default.aspx?page=HomeOwnership

Contact details:
Within Alabama: 334/244-9200
Toll-free: 800/325-AHFA