Your Guide to NC Loan Assistance Programs

Are you eyeing a home or condo, but not sure how you’ll ever be able to afford a mortgage or scrape together a down payment? If you’re a North Carolina resident, you’re in luck. The North Carolina Housing Finance Agency, or NCHFA, and affiliate organizations offer programs to assist prospective home buyers. These programs range from affordable mortgages to down payment assistance, and some can even be combined.

With a little help from these programs and a participating mortgage lender like Dash, you might be able to afford your dream home sooner than you thought. Many of these programs are ideal for first-time homebuyers.

NC Home Advantage Mortgage

An NC Home Advantage Mortgage is a fixed-rate mortgage (conventional, FHA, VA, or USDA mortgages can all qualify). It is offered as an NCHFA program through participating mortgage lenders. The program is ideal for first-time buyers, but it’s also accessible to those who already own a home but are looking to “move up.”

The program also offers down payment assistance of up to five percent. (Conventional loans only qualify for up to three percent down payment assistance.) This assistance is offered as a no-interest second mortgage, but you don’t have to pay it off unless you move, refinance, or pay off your loan in the first 15 years. Otherwise, it’s forgiven 20 percent per year at the end of years 11 through 15.

NC Home Advantage Mortgage Qualifications

Want to apply for an NC Home Advantage Mortgage? Many North Carolina residents qualify if they meet the following requirements.

Eligible Applicants

• Must buy the home in North Carolina, and must occupy it as your primary residence (Be sure to move in within 60 days of closing!)
• Income can not exceed $99,000
• Credit score must be 640 or higher
• Must be a legal U.S. resident

Eligible Properties

• Single-family homes
• Townhouses
• Condominiums
• Duplexes (only FHA loans qualify)
• New manufactured homes (This option is only available to buyers with credit scores of 660 who use an FHA, VA, or USDA mortgage)

How to Apply for an NC Home Advantage Mortgage

You can learn more about the NC Home Advantage Mortgage on the NCHFA website. Because the loan is offered through participating NC mortgage lenders, you should contact a lender once you’re ready to get started. They will help you with the process.

NC 1st Home Advantage Down Payment for First Time Homebuyers

While the NC Home Advantage Mortgage does offer down payment assistance, you may qualify for additional assistance through the NC 1st Home Advantage Down Payment program. The requirements are more strict for this program, but qualified buyers may be able to access up to $8,000 in down payment assistance.

As with the other down payment assistance options, NC 1st Home Advantage Down Payment is a zero percent deferred second mortgage with complete forgiveness after its 15th year.

NC 1st Home Advantage Down Payment Qualifications

If you’re applying for an NC Home Advantage Mortgage, the NC 1st Home Advantage Down Payment program could help you secure a home. Before you ask your lender about the program, ask yourself if you meet the following requirements.

Eligible Applicants

• Must qualify for an NC Home Advantage Mortgage and meet all of its requirements:
• Must buy the home in North Carolina, and must occupy it as your primary residence (Be sure to move in within 60 days of closing!)
• Income can not exceed $99,000
• Credit score must be 640 or higher
• Must be a legal US resident
• Must be a first-time homebuyer (which means you have not owned a home for the last three years), military veteran, or purchasing a home in a targeted census tract

Eligible Properties

• Single-family homes
• Townhouses
• Condominiums
• New manufactured homes (must have a credit score of 660 or higher)

How to Apply for an NC 1st Home Advantage Down Payment

If you think you may qualify for an NC 1st Home Advantage Down Payment, your participating lender will help you apply as part of your NC Home Advantage Mortgage. You can learn more about the program on the NCHFA site.

NC Home Advantage Tax Credit

First-time buyers and military veterans may qualify for the NC Home Advantage Tax Credit. Qualified buyers can receive a tax credit of up to 30 percent of your mortgage interest rate (50 percent if your home is new construction), up to $2,000. This credit is available every year you live in your home.

The NC Home Advantage Tax Credit is a Mortgage Credit Certificate (MCC) offered through the NCHFA. You can apply for it when you apply for a mortgage. While it can be combined with an NC Home Advantage Mortgage, it can not be combined with an NC 1st Home Advantage Down Payment.

NC Home Advantage Tax Credit Qualifications

An NC Home Advantage Tax Credit can save you thousands of dollars over the course of your loan if you qualify. First, consider if you meet the following requirements.

Eligible Applicants

• Must be a first-time home buyer, military veteran, or purchasing a home in a targeted census tract
• Must meet the income and sales prices limits, which vary from county to county
• Must buy the home in North Carolina, and must occupy it as your primary residence (Be sure to move in within 60 days of closing!)
• Must be approved for the MCC before you purchase your home
• Loan must be approved by the NCHFA before you close
• Must be a legal US resident

Eligible Properties

Single-family homes

• Townhouses
• Condominiums
• New or used manufactured homes

How to Apply for an NC Home Advantage Tax Credit

Start by learning more about the credit program on the NCHFA website. When you begin the mortgage application process, ask your lender about also applying for the NC Home Advantage Tax Credit. They’ll help determine if you’re eligible and apply.

Community Partners Loan Pool

The Community Partners Loan Pool (CPLP) is another down payment assistance program. It can be combined with an NC Home Advantage Mortgage for assistance of up to 20 percent of the sale price (but can not exceed $30,000). It is also available to buyers using a USDA Section 502 loan for their mortgage, in which case they may receive up to 10 percent of the purchase price in assistance.

Like the NC 1st Home Advantage Down Payment, a CPLP loan is structured as a second, zero-interest mortgage. But the CPLP loan matches the term of the first mortgage and must be repaid, usually when the loan term ends or the home is sold.

The best part about the Community Partners Loan Pool? It can be combined with an NC 1st Home Advantage Down Payment or an NC Home Advantage Tax Credit.

Community Partners Loan Pool Qualifications

If you need additional assistance with your down payment, the CPLP could be a great option for you to get into the housing game. But the requirements for a Community Partner Loan Pool are a bit more strict.

Eligible Applicants

• Total household income can not exceed 80 percent of the Area Median Income in the county in which you’re buying your home
• You must offer proof of sufficient and stable income that will allow you to afford the home
• Credit score must be at least 640
• Housing ratio (how much of your monthly income will be dedicated to housing) must be between 25 and 32 percent
• Debt-to-income ratio can not exceed 43 percent
• Must finish an approved homebuyer education course, as well as two hours of housing counseling
• Must coordinate with a CPLP member to establish homeowner readiness plan before signing your contract

Eligible Properties

• New homes or homes in like-new condition (less than 10 years old)
• The sales price of the home can not exceed the limit for the county
• New homes must receive a Certificate of Occupancy
• Like-new homes must pass both a home inspection by a licensed NC inspector and a local housing code inspection
• If the home does not pass either inspection, necessary repairs must be made before the loan will be approved

How to Apply for the Community Partners Loan Pool

Unlike other home-buying assistance programs in North Carolina, you do not apply for the CPLP program through your lender. Instead, you’ll contact a local CPLP member, who will help determine if you and the home meet the requirements. (Find your local CPLP members here.) If they determine that you are eligible, they will submit an application to the NCHFA on your behalf. This process and the homebuyer education program and planning can take up to 60 days. Learn more about the CPLP program on the NCHFA website.

Self Help Loan Pool

The Self-Help Loan Pool (SHLP) program is offered in partnership with a SHLP member, usually an NC Habitat for Humanity affiliate. The program offers up to $35,000 in mortgage financing for a home built or rehabbed by an SHLP member (again, usually Habitat for Humanity).

The SHLP mortgage, combined with other agency funds, is offered as a zero percent, amortizing loan with a term that may range from 20 to 33 years. The homebuyer makes their mortgage payment directly to the SHLP member.

Self Help Loan Pool Qualifications

Of all of North Carolina’s homebuyer assistance programs, the SHLP program is the one with the strictest requirements. That is largely because it applies specifically to homes built or rehabbed by agencies like Habitat for Humanity. If you want to know if you qualify for the program, first consider the requirements below.

Eligible Applicants

• Must participate in the self-help housing program, like helping to build or rehab the home
• Household income must be at or below 80 percent of the Area Median Income
• Must complete an approved homebuyer education course and two hours of housing counseling before purchasing the home

Eligible Properties

• The SHLP program is only available for homes built or rehabbed by a Self Help Loan Pool member, like Habitat for Humanity
• Home price cannot exceed maximum sales price for the county

How to Apply for the Self Help Loan Pool

Like the other loan pool program, you must apply for a SHLP loan through a SHLP member. If you are interested in the program, begin by reaching out to your local SHLP member. (Find your local SHLP members here.) You can also find more information about the program on the NCHFA website.

Purchasing a North Carolina Home with Assistance

North Carolina offers a number of programs to help make your housing dreams come true, and your lender can help you navigate questions about which program is right for you and how to apply.

However, don’t limit your search for assistance to the state. There are also federal housing assistance programs you may qualify for based on your occupation, housing history, and other qualifications. Check out the US Department of Housing & Urban Development (HUD) to learn more about these other programs. Or, talk to a Dash mortgage coach. We’re here to help you find the best mortgage for you.

Opinions expressed are solely my own and do not express the views of my employer.