Photograph by Mariaelena Caputi
You likely already know about loans insured by the Federal Housing Authority, which include flexible qualification requirements, and no-money-down loans from Veterans Affairs for current and former military members. Similarly, there are U.S. Department of Agriculture programs offering no-down-payment loans on properties in designated rural areas, and low-interest loans from state government agencies, such as the Ohio Housing Finance Agency (OHFA), the Kentucky Housing Corporation (KHC), and the Indiana Housing and Community Development Authority (IHCDA). “Most people don’t realize all this money is out there,” says Bethany Ritchey, branch manager at Fairway Independent Mortgage Corporation. “And the programs can be stacked. Whether it’s a federal, state, city, or county program, you shouldn’t have to do all the research yourself. That’s the lender’s job.”
The OHFA offers forgivable loans of 3 percent of the home’s purchase price as a zero-interest loan, forgiven after several years if the home is not sold or refinanced. The same is offered to recent college grads, forgiven after a predetermined number of years if the grad continues to live in the state of Ohio. The IHCDA offers up to 6 percent of a home cost as a forgivable loan. A Cincinnati city program, The American Dream Downpayment Initiative, offers no-interest loans starting at $10,000 for first-time homebuyers in select neighborhoods, forgiven as long as you live in the house for at least five years. Like most of the programs in this article (but not all!), these apply to single-family homes for people whose Area Median Income is 80 percent of the average or less. (Hamilton County’s AMI is $63,080).
Finally, grants are no-strings-attached gifts toward a home’s down payment. The FreddieMac BorrowSmart grant is for $1,250.
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