Best First Time Home Buyer Programs in Ohio

When you become a first-time homebuyer, a lot of planning, saving and calculations go into making a purchasing decision. Ohio offers several programs to make homeownership an affordable reality if you’re ready to make the leap. If money’s tight, tapping into financial assistance through Ohio’s housing development authority and several mortgage lenders in the Buckeye State can help you save more while becoming a homeowner.

Take a look at Benzinga’s guide to the best first-time homebuyer programs in Ohio, as well as national programs you may also qualify for.

Quick Look: Best First-Time Homebuyer Programs in Ohio

• Best for Loan Forgiveness: Your Choice! Down Payment Assistance
• Best for Public Employees: Ohio Heroes
• Best for Recent College Graduates: Grants for Grads
• Best for Federal Tax Credits: Mortgage Tax Credit

Quick Look: Best National First-Time Homebuyer Programs

Best First-Time Homebuyer Programs in Ohio

The Ohio Housing Finance Agency (OHFA) oversees the state’s first-time homebuyer programs. All of Ohio’s first-time homebuyer programs are available through approved private lenders. Here are the program details and eligibility requirements. 

Best for Loan Forgiveness: Your Choice! Down Payment Assistance

The Your Choice! Down Payment Assistance program provides a forgivable loan to use toward your down payment, closing costs, and preclosing expenses. You can get a loan for either 2.5% or 5% of your home’s purchase price if you qualify. The loan will be forgiven after seven years, but if you sell or refinance your home before then, you’ll need to pay off the loan. You must take a free homebuyer education class. 

Eligibility requirements: 

• Credit score: 640 or higher for a conventional loan or loans backed by Veterans Affairs (VA) or the U.S. Department of Agriculture (USDA) loan or 650 or higher for a loan backed by the Federal Housing Administration (FHA).
• Income limit: Varies by location, loan and family size. For conventional loans, it ranges from $108,720 to $145,040 for one- to two-person families.  
• Loan limit: Varies by location and is available for single-family properties up to four-unit buildings. The purchase price limit for target areas is $588,104 and $481,176 for nontarget areas. 

Best for Public Employees: Ohio Heroes

The Ohio Heroes program provides public service employees with a discounted mortgage interest rate. A discounted mortgage rate can save thousands of dollars over the life of your home loan. Ohio Heroes has additional eligibility requirements related to your profession. 

You must work in one of the following professions:

• Military, as an active duty service member, reservist or surviving spouse
• Education, as a teacher (pre-K to 12th grade), administrators and counselors 
• Public safety, as a police officer, firefighter (including volunteers), EMT or paramedic
• Medical, as a doctor, nurse, nurse practitioner or state-tested nursing assistant (STNA)

In addition, you must be below the program’s income limits, and you must complete a free homebuyer education class.

• Credit score: A credit score of 640 or higher is required for conventional, USDA or VA loans, and a 650 or higher credit score is required for an FHA loan.
• Income limit:  Varies by county, family size, and loan type. For conventional loans, the range is from $108,720 to $145,040 for one- to two-person families. 
• Loan limit: Price limits vary by location. You could get single-family properties up to four-unit buildings. The purchase price limit for target areas is $588,104 and $481,176 for nontarget areas. 

Best for Recent College Graduates: Grants for Grads

The Grants for Grads program helps recent graduates buy an Ohio home. The program offers 2.5% or 5% of the purchase price as down payment assistance in the form of a forgivable loan. 

Your loan will be forgiven if you stay in your home for five years or longer. If you sell your home before that, you are responsible for repaying the loan. 

To qualify for Grants for Grads, you must be a first-time homebuyer. However, there’s a loophole if you’ve previously owned a home. The OHFA defines a first-time homebuyer as not having owned a home in the last three years. 

In addition, you must have graduated in the past 48 months (four years) with a degree. You can qualify with an associate’s, bachelor’s, master’s, doctorate or another post-graduate degree from an accredited college or university. You must complete a homebuyer education class. 

• Credit score: 640 or higher for a conventional, VA or USDA loan or 650 or higher for an FHA loan
• Income limit: Varies by area according to Ohio guidelines. For conventional loans, the range is $108,720 to $145,040 for one- to two-person families. 
• Loan limit: Varies by area according to Ohio guidelines. You could get single-family properties up to four-unit buildings. The purchase price limit for target areas is $588,104 and $481,176 for nontarget areas. 

Best for Federal Tax Credits: Mortgage Tax Credit

The Mortgage Tax Credit provides first-time homebuyers with a federal tax credit. The tax credit is based on your mortgage interest, and it can lower your tax liability. If you qualify, you can take this credit in addition to your mortgage interest deduction. 

If you use an OHFA home loan, you may qualify for a tax credit of up to 40% of your home mortgage interest, with a maximum of $2,000. You can combine the mortgage tax credit with a down payment assistance loan of 2.5% of your home purchase price. 

You may still be eligible for a tax credit if you don’t use an OHFA home loan. You may be able to deduct 30% of your mortgage interest if you buy a bank-owned property. If you buy a property in a target area, you may be able to deduct 25% and may be eligible to deduct 20% in a nontarget area. 

To qualify, you must be a first-time homebuyer. You can also qualify if you haven’t owned a home in the last three years. As with other Ohio programs, you must complete a homebuyer education class.  

• Credit score: 640 or higher for a conventional, VA or USDA loan or 650 or higher for an FHA loan
• Income limit: Varies by area according to Ohio guidelines
• Loan limit: Varies by area according to Ohio guidelines. You could get single-family properties up to four-unit buildings. The purchase price limit for target areas is $588,104 and $481,176 for non-target areas. 

Best National First-Time Homebuyer Programs

Many national programs are available to help both first-time homebuyers and repeat homebuyers. Here are some of the best options available. 

Best for Low-Income Buyers: FHA Loans

FHA loans are a popular choice for first-time homebuyers because of the low down payment requirements. The Federal Housing Administration insures these loans, which means lenders can offer them to a range of home buyers, including those with less-than-stellar credit scores. 

You can apply to an FHA-approved mortgage lender. FHA loans are a popular mortgage program because of their low credit and down payment requirements. However, you’ll still need to meet FHA loan qualifications.

• Credit score: 500+ with a 10% down payment; 580+ plus with a 3.5% down payment
• Income limit: Varies by area 
• Loan limit: Varies by area and property type 

Best National FHA Lender: Rocket Mortgage®

Rocket Mortgage® offers a seamless online mortgage experience. You can complete the entire process from home, and experts are available to answer your questions via phone or chat. Rocket Mortgage® has award-winning customer service and it’s experienced with the FHA loan process. It also offers extensive online educational resources.

• Credit score: 500+ with a 10% downpayment; 580+ plus with a 3.5% downpayment
• Income limit: Varies by area 
• Loan limit: Varies by area and property type. 

Best for Veterans and Service Members: VA Loans

VA loans help service members and veterans purchase homes. It’s a great fit for first-time homebuyers because there is no down payment requirement and no mortgage insurance, which lowers your monthly payments. The VA insures these loans and private lenders offer them to borrowers.

Veterans and current service members must meet minimum service length requirements. Reservists and National Guard members and some surviving spouses may also qualify. Contact the VA to find out whether you’re eligible and that you have a Certificate of Eligibility. 

• Credit score: No minimum
• Income limit: None
• Loan limit: Varies; $766,550 for most U.S. counties

Best National VA Lender: Veterans United

The VA loan process can be daunting. You want to work with an experienced lender, and Veterans United has been the top VA lender for four consecutive years. It boasts excellent customer service reviews and a user-friendly website. Representatives are available around the clock to help you navigate the process. 

• Credit score: No minimum
• Income limit: None
• Loan limit: Varies: $766,550 for most U.S. counties

Best for Rural Locations: USDA Loans

USDA loans are a great initiative by the U.S. Department of Agriculture to provide a home to low-income applicants at 0% down. You’ll get a subsidy and a reduced mortgage payment for a short time. You can only get this loan in rural areas.

If you qualify, you can buy a home with no down payment. Flexible credit guidelines mean you don’t need perfect credit to qualify. However, your income must be below your area’s income limits.

While there’s no credit score requirement, you do need to show you can handle debt. Lenders will review your credit history. In addition, you must be a citizen, a noncitizen national or a qualified alien.

• Credit score: None
• Income limit: Varies by county
• Loan limit: Varies by county, usually $398,600 to $919,800

Best National USDA Lender: CrossCountry Mortgage

CrossCountry Mortgage can help homebuyers who qualify secure a mortgage for less. To be eligible for this type of loan, the home you want to buy or refinance must be in an eligible rural or suburban area, and your household income must be under the USDA limit for that area. 

• Credit score: 640+, but borrowers with a lower score can qualify
• Income limit: $110,650 for households with up to four members; $146,050 for households with up to eight members 
• Loan limit: Varies by county, usually $398,600 to $919,800

Qualification Requirements

To qualify for the Ohio first-time home buyers program, you must:

• Have not owned a home in the previous three years
• Complete a homebuyer education course
• Meet traditional underwriting for the mortgage, including debt-to-income (DTI) thresholds for the lender
• Have a minimum 640 credit score or 650 for FHA loans
• A home sales price below the maximum limits, which vary by county and your loan type
• Have an income below the maximum thresholds
• In the case of Ohio Heroes, be working in a qualified professional
• In the case of Grants for Grads, have graduated with a degree in the past 48 months 

How to Apply for a Program

To gain access to an Ohio first-time homebuyer program, you must work with a state-approved lender. You can search for an OHFA-approved lender in your area. If you need more help, you can call the state’s toll-free helpline at 888-362-6432. Once you choose a lender, it will help you to secure all applicable OHFA grants and fill out any necessary paperwork. 

Buying Your First Home

First-time homebuyer programs are designed to help you secure your first home. Choosing the lender that is right for you is a big decision. In addition to reviewing first-time homebuyer resources, consider taking a homebuyer education class to learn the ins and outs first. 

Remember to contact multiple lenders to find out about interest rates and fees before you settle on one option. It’s easy to get a few quotes and start your road to homeownership today. You can find more tips for first-time homebuyers here.

Frequently Asked Questions