Buying a home in Ohio can be an exciting experience, but it can also get very expensive. Even if you’re financing the purchase, you still need to save for a down payment, account for closing costs, and set aside funds for all the smaller fees that can quickly deplete your budget.
Luckily, there are many great first time home buyer programs in Cleveland, Ohio, that can help make the cost of buying a home far more affordable.
Some Cleveland first time home buyer programs exist in the form of affordable loans, while others are offered in the form of closing costs and down payment credits. However they are structured, these first time home buyer programs in Cleveland Ohio make the dream of purchasing a house far more manageable for the average person. Here is a look at some of the most popular programs available.
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First Time Home Buyer Tax Credits & Downpayment Assistance in Cleveland
The majority of first time home buyer programs in Cleveland Ohio, are provided by the Ohio Housing Finance Agency. The OHFA offers several tax credit and down payment assistance programs that borrowers in Cleveland can take advantage of.
OHFA Mortgage Tax Credit
One of the most popular first time home buyer programs in Cleveland Ohio is the OHFA mortgage tax credit, which is available to any Cleveland first time home buyer. The interest paid on your mortgage loan can be a significant annual expense.
The OHFA mortgage tax credit allows eligible borrowers to deduct a portion of that interest paid from their federal taxes, providing a savings of up to $2,000 per year. In order to qualify for this first time home buyer program in Cleveland Ohio, you must have a tax liability. You must also not have owned or had an ownership interest in your primary residence for at least 3 years and meet the credit and income requirements of your loan type.
However, the mortgage tax credit can be used in addition to the IRS home mortgage interest deduction and any other first time home buyer programs in Cleveland Ohio.
The total amount of the Cleveland first time home buyer tax credit depends on whether you use the interest deduction with a loan through the OHFA or not.
- Mortgage tax credit with a loan from the OHFA MTC Plus Program: 40% of the home mortgage interest up to $2,000
- Mortgage tax credit with another loan: 20% of the home mortgage interest for a property located in a targeted area, and 15% for all other properties
Borrowers who qualify for OHFA first time home buyer programs in Cleveland Ohio are also required to complete a free homeownership education course.
OHFA Downpayment Assistance
The OHFA also offers downpayment assistance programs in Cleveland. The down payment is often a major financial hurdle for many borrowers.
It’s typically the highest upfront cost of buying a home and ranges from 3-20% of the home price, depending on the type of loan you plan to use. The median home price in Cleveland is $135,000, which means the typical borrower should expect to pay anywhere from $4,050 to $27,000 for a down payment.
Down payment assistance programs in Cleveland make the upfront costs more manageable. Eligible borrowers can receive up to 3% of the purchase price for conventional loans and 3.5% for government-backed loans (such as FHA, VA, or USDA) to be applied toward the down payment, closing costs, or any other pre-closing expense.
It can be used in combination with an OHFA loan and other first time home buyer programs in Cleveland Ohio. It will be forgiven after 7 years as long as you stay in the same residence (if you don’t, the full amount must be repaid). Like other OHFA first time home buyer programs in Cleveland Ohio, Borrowers must also participate in a home buyer education course and meet the requirements for the type of loan they’re using.
OHFA Programs For Students and Heroes
The OHFA also offers a few Cleveland first time home buyer programs available to students and borrowers in select professions.
- Ohio Heroes: Available for police officers, firefighters, EMTs, veterans, and active duty military members, physicians, nurses, teachers, and other Cleveland first time home buyers in similar occupations. Qualified Ohio residents who serve the public can get a discounted mortgage interest rate
- Grants for Grads: The OHFA also offers first time home buyer grants in Cleveland for recent graduates of an accredited college or university. Borrowers must have graduated within the past 18 months with either an associate’s, bachelor’s, master’s, doctoral or other postgraduate degree. Those who qualify for these first time home buyer programs in Cleveland Ohio get a discounted mortgage interest rate and assistance with the down payment and closing costs (3% for conventional loans, 3.5% for government loans). First time home buyer grants in Cleveland through the Grants for Gads program will be forgiven after 5 years if you stay in the same residence.
First Time Home Buyer Loans in Cleveland
Along with down payment assistance and closing costs, there are also several first time home buyer programs in Cleveland Ohio that offer affordable loan terms.
Ohio Housing Finance Agency Loan Program
The OHFA also offers several affordable loan options to Cleveland first time home buyers. While they don’t originate the loans, they partner with lenders, credit unions, and mortgage companies to help qualified borrowers get access to loans.
They offer 30-year, fixed-rate FHA, VA, USDA, and conventional loans with generous income and credit requirements designed for borrowers with low to moderate incomes.
The OFHA first mortgage can be combined with one of their other first time home buyer programs, such as the down payment assistance, Grants for Grads, or Ohio Heroes, making the cost to buy a home in Cleveland even more manageable.
Neighborhood Assistance Corporation of America
The Neighborhood Assistance Corporation of America (NACA) is a non-profit community advocacy and affordable housing organization that helps families with incomes in the low to moderate range buy homes and protect themselves from predatory lending practices. Although they are headquartered in Boston, they offer first time home buyer programs in Cleveland Ohio and have a local office in the city.
They offer a loan program specifically designed for first time home buyers in Cleveland, called America’s Best Mortgage. It enables eligible borrowers to access affordable, below-market-rate mortgages through their financial counseling program. NACA mortgages feature no down payments, closing costs, hidden fees, or private mortgage insurance.
To date, they’ve financed over 75,000 mortgages with a foreclosure rate of 0.00012%. They have a four-step process to qualify for their Cleveland first time home buyer programs:
- Attend a NACA Home buyer workshop.
- Become a NACA member and submit your information.
- Get Qualified by a NACA Counselor
- Attend a Property & Purchase Workshop
Once you are a NACA member, they will be able to further advise you on the qualifications and how to get the most out of their first time home buyer programs in Cleveland Ohio.
First Time Home Buyer Programs in Cuyahoga County
Cuyahoga County Down Payment Assistance Program
In addition to the Cleveland, Ohio, first time home buyer programs that are available to borrowers on a national and statewide level, there are also programs offered by Cuyahoga County. The most popular is their downpayment assistance program.
The program is designed to assist individuals with low to moderate incomes. CNH Housing Partners administers the program, allowing eligible home buyers to receive down payment assistance equal to 17% of the total transaction cost.
The program only applies to owner-occupied, single-family homes (existing homes or new construction) that are occupied by the seller or have been vacant for over 90 days. The property must also be inspected for code violations or defective paint, which must be corrected if discovered before the buyer can take the title.
To qualify for their first time home buyer programs in Cleveland Ohio, borrowers must
- Not have occupied a home in the past 3 years
- Occupy the dwelling as their primary residence
- Not to exceed the total household income limits set by the state
- Be current on their taxes
- Have a mortgage where the loan-to-value doesn’t exceed 80%
- Have a housing debt-to-income ratio that doesn’t exceed 28%
- Have an overall DTI ratio that doesn’t exceed 43%
The CN housing partners website has more info on qualifications and requirements. You can also contact them by calling (216) 574-7100 to inquire about first time home buyer programs in Cleveland Ohio.
Cleveland First Time Home Buyer Programs FAQ
What Are First Time Home Buyer Programs in Cleveland Ohio?
A first time home buyer program in Cleveland is a government or lender-sponsored program that provides financial assistance or special loan terms to borrowers purchasing their first home.
First time home buyer programs in Cleveland Ohio can come in the form of a loan with flexible terms, assistance with down payments and closing costs, grants, tax credits, or a variety of other forms. They are meant to encourage homeownership and make it easier for low to moderate-income borrowers to overcome some of the financial hurdles associated with finding a home.
What Is the Best Program for a First Time Home Buyer in Cleveland With Bad Credit?
While there are no specific first time home buyer programs in Cleveland Ohio that cater to borrowers with bad credit, many loan programs have flexible income and credit requirements. For instance, the OHFA loan program can be paired with an FHA loan that is available to borrowers with a credit score as low as 500.
Do You Have to Pay Back Down Payment Assistance in Cleveland?
Many down payment assistance programs in Cleveland can be forgiven if you live in the home for a certain number of years. Although it depends on the organization, you should check with the terms of any Cleveland first time home buyer programs you’re considering, if it’s forgivable or if there are circumstances that require repayment.
What Is Considered a First Time Home Buyer In Cleveland?
A first time home buyer in Cleveland is typically someone who has never owned a primary residence. Although it can also refer to someone who hasn’t owned a primary residence in the past three years. So even if you have owned a home in the past, you may still qualify for Cleveland first time home buyer programs.
Thinking About Moving to Cleveland?
Now that you know all about the best first time home buyer programs Cleveland Ohio, you’re ready to make it your new home. When the time comes to make the transition, you can trust the dependable Cleveland movers at Summit Moving and Storage to make your upcoming move easy and efficient. Call (216) 641-6677 today for a free quote.
