Looking for a Way to Finally Own Your Home? Ohio Wants to Help.

Could your new home be in Cleveland? Cincinnati? Columbus or Dayton? You name it. If you’d love to hold the deed to an Ohio home, and wonder how on Earth you could pull it off, learn about the help currently available from the state.

These opportunities help people with their down payments or closing costs, and can provide mortgage loans with discounted rates. Some are for first-time buyers. And some are for repeat buyers. Take a look!

Look to the Ohio Housing Finance Agency for Mortgage and Down Payment Assistance.

Do you know about the Ohio Housing Finance Agency? It collaborates with banks, credit unions, and mortgage companies to offer home loans. Buyers with modest incomes can apply for conventional loans (backed by Freddie Mac or Fannie Mae), or government loans (backed by the FHA, VA, or USDA). Any of these popular loans can be paired with Ohio’s down payment support.

For eligibility, you need to be in just one of these situations:

  • You are a first-time buyer. And that’s defined broadly. You simply haven’t owned (or co-owned) your primary home in the past three years.  
  • Or you’ve done military service and were honorably discharged.
  • Or you’re good with buying into an economically distressed area.

There are a few restrictions to understand. First, each Ohio county caps the price of the homes that can be bought with state assistance.

And as always, specific loans have particular income minimums and debt-to-income (DTI) ratio criteria that applicants must meet. And of course each type of mortgage has its minimum credit score. In this case you’ll need a score of 640+ (650+ if you’re going for an FHA-backed mortgage).

You’ll have a home buyer education course to complete. It’s free — thanks to the federal Department of Housing and Urban Development. 

Ohio’s Grants Can Be Lifesavers for Recent Grads.

Ohio’s Grants for Grads could be right for you if you haven’t owned or co-owned your home for three years or more — if ever.

If you graduated from college in the last four years, you could apply for a mortgage with a slightly discounted (.125% off) interest rate. But there’s more. You can pair this option with a second, deferred-payment loan for 2.5% or 5% of the home’s price: your choice! This helps cover your closing costs or down payment.

Live in your new home for five years and poof! The second loan is forgiven.

Qualified applicants will:

  • Hold a recent associate’s, bachelor’s, or post-grad degree.
  • Borrow from lenders that work with the Ohio Housing Finance Agency.
  • Fit the lender’s debt-to-income guidelines.
  • Have a credit score that’s at least 640 (or 650+ for an FHA-backed mortgage).

Both your total income and the purchase price of the home you’re buying must fall under a cap that’s set by the county where you’re buying. As with the Ohio Housing Finance Agency’s assistance plan, the grad plan requires buyers to take the HUD-approved home buyer course, free of charge.

Not a First-Time Buyer? Look Into Next Home.

Maybe you are moving within three years of acquiring your current home’s deed. So you don’t count as a first-time buyer. But these days, who can afford the down payment on the next home? Ohio gets it. Check out Next Home.

With this option, qualified buyers sign up for a 30-year, fixed-rate mortgage loan. Pick your mortgage type: Fannie or Freddie? Or a government-backed loan? For any of these popular loans, Next Home kicks in 2.5% of the home’s price for your down payment.

The Ohio Housing Finance Agency approves lenders for Next Home. The approved lender will go over your finances to be sure:

  • You fit the lender’s debt-to-income guidelines.
  • Your credit score is no lower than 640 (or at least 650, for an FHA-backed mortgage).
  • Both your total income and the purchase price of the home you’re buying fall under the county-based caps. Income caps on eligibility vary by county, and are usually set around $109K to $120K per household.
  • You can be ready to move into your new home within 60 days of closing day.

Qualified buyers take the HUD-approved buyer course — again, at no cost to the mortgage borrower.

Doing Work for the Public’s Wellbeing? Check Out the Extra Benefits for Ohio Heroes.

Much like the graduates’ grants, Ohio Heroes loans discount the interest rates for conventional or government-backed loans. The discount is a quarter-point — not bad! If you pursue a job in public service, and the home you choose is not priced over the county limits, you could qualify.

What’s more, you could supplement an Ohio Heroes loan with the state’s down payment assistance, described above.

Whether you’re a first timer or eligible for Next Home (see above), consider this option if your career is in:

  • Policing.
  • Professional or volunteer firefighting.
  • The medical professions.
  • Pre-kindergarten through 12th-grade education.
  • Active-duty or reserve military service. Vets and their surviving spouses can also apply.

Here again, the Ohio Heroes loans are for people with modest incomes who can still measure up to the state-approved lender’s debt-to-income expectations. Applicants must show a credit score of at least 640 (650 if applying for an FHA-backed mortgage). And they’ll need to take the HUD-approved buyer education course (for free).

DTI Holding You Back? Look at Communities First for Down Payment Help.

What is Communities First down payment assistance? It’s a grant you can use with Fannie Mae, Freddie Mac, or government-backed mortgages. And it gives the borrower 3, 4, or 5% home equity right off the bat!

If you don’t plan to stay in the home long, or your debt-to-income ratio is a problem, this grant can give you a boost. Here are some key specifications:

  • An applicant’s credit score can be as low as 620.
  • Communities First cannot be used to buy co-ops, manufactured homes, or vacation rentals.
  • The new deed holder must move in no later than 60 days after closing.
  • The county household income caps do not apply, but individual borrower caps do.

With Communities First, there is no second mortgage or lien place on the borrower’s property. These are grants, not loans. Speak with an approved lender (find yours here), and learn whether Communities First could work out for you.

And Don’t Forget to Look Into Local Home Buyer Assistance Opportunities.

Thanks to Quicken LoansTM for pointing out these gems, just waiting to be discovered by Ohio residents (and hopeful residents):

  • Cuyahoga County: In Cuyahoga County, the Down Payment Assistance Program could provide up to 17% of your total purchase funds. This must be the first home you’ve bought in the past three years.
  • Columbus: Look into the American Dream Down Payment Initiative (ADDI). This federally sponsored offering is a deferred, interest-free, forgivable loan. As of March 1, 2024, the City of Columbus offers up to $15K for closing costs and/or the buyer’s down payment. You’ll need to live in the home at least five years after closing.
  • Cincinnati: The City of Cincinnati offers the American Dream Down Payment Assistance Initiative (ADDI), too. The city publishes this PDF with all the exciting details. As always, ADDI funds come with a five-year home occupancy requirement.
  • Summit County: First Home, First Loan is a deferred loan to support home purchases in Summit County, Ohio. This package also matches the borrower’s down payments 3-to-1, up to $12K. Home buyers in Akron, Barberton, and other counties have similar offerings, so don’t miss them if you’re looking in those areas.
  • Toledo: Home at Last grants of around $7,500 help struggling Toledo residents buy free-standing homes or condos. The program promises closing in 21 days.  

With these boosts, some sidelined home buyers really could be home at last.

Mortgage Tax Credit Certificates: How Do They Work?

The Ohio Housing Finance Agency runs a mortgage tax credit certificate initiative for people buying primary residences in the state. Here are the key points:

  • You’ll need to meet certain DTI levels, county income caps, and home price caps.
  • As an Ohio home buyer, even with a loan that isn’t offered by an agency partner, you can get an IRS credit of up to $2K annually for mortgage interest paid — over and above the regular tax deduction!
  • Whether or not you got an Ohio down payment boost, you can apply for the “plus” level mortgage tax credit for mortgage interest up to $2K. Note that the interest rate on the loan is nudged up a bit, so be sure to do the math.  

Ohio also issues tax credit certificates at 30% for buying foreclosures, 25% for buying in an economically stressed area, and 20% for other homes. To qualify, seek out a participating lender. There are plenty of additional resources with this opportunity, so check it out!

Find It Here: Explore Your Next Opportunity in Ohio.

Struggling to afford a home in this market? If Ohio is where you’d like to live, why not consider applying for buyer assistance? The benefits are significant — including interest-free, forgivable second loans. Find a state-approved mortgage company and ask how Ohio might assist you.

Please note: Deeds.com is not connected with any of the above-mentioned offerings or agencies in any way. Requirements, such as minimum credit scores, may change. See your financial adviser for individual guidance in your home buying decisions.

Supporting References

 T.J. Porter for Quicken LoansTM, part of Rocket Mortgage, LLC (under license by LMB Mortgage Services, Inc.): Ohio First-Time Home Buyer Assistance Programs (May 1, 2024).

Communities First – Down Payment Assistance for Ohio via CommunitiesFirstOhio: For Buyers.

The Ohio Housing Finance Agency via MyOhioHome.org:Ohio Heroes.

And as linked.

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Photo credits: EEJCC via Wikimedia Commons, licensed under CC BY-SA 4.0 International; and Nikolaos Dimou, via Pexels/Canva.