Louisiana First-Time Homebuyer Programs

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Updated on Wednesday, February 20, 2019

Intro

Louisiana homebuyers will find a wealth of resources for purchasing single-family properties in the Pelican State. The state government runs a number of programs to support first-time and repeat homebuyers in securing affordable loans with favorable interest rates, as well as obtaining down payment assistance and tax credits that make homeownership affordable. These programs are specifically designed to support low- and moderate-income borrowers purchase homes.

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Louisiana first-time homebuyer programs

The Louisiana Housing Corp. (LHC) administers the state’s government-sponsored homebuying assistance programs. In addition to the statewide programs listed here, there are a number of city-level programs, as well as homebuying assistance initiatives in Jefferson Parish. You can learn more about those at the Department of Housing and Urban Development (HUD) website.

Eligibility for Louisiana assistance

The only universal requirement for Louisiana homebuying assistance programs is that the home must be located in Louisiana. However, each program also carries income limitations, though these vary based on program, location and family size. Some are location-specific, and this is noted under each heading.

Market Rate GNMA Program

Features

  • Thirty-year fixed-rate mortgage
  • Borrower pays no origination fees
  • Available to first-time and repeat homebuyers
  • Can get up to 4% assistance toward down payment, closing costs and/or prepaid items such as taxes or interest.

Eligibility

List requirements, which may fall in the following categories:

  • Available for U.S. Department of Veterans Affairs (VA), Federal Housing Administration (FHA), and U.S. Department of Agriculture (USDA) Rural Development loans.
  • Income limit is 115% of the area median income (AMI).
  • Credit score must be 640 or higher.

How it works

The LHC recommends beginning the process by checking your income eligibility against your parish’s income limits, which can be found here. If you believe you qualify, you can then speak with a participating lender for prequalification and begin your home search. After you sign the purchase agreement for the property, your lender will submit the request for funds to the LHC. You can find participating lenders at this link.

LHC Preferred Conventional Program

Features

  • Thirty-year fixed-rate mortgage
  • Can be used to purchase a single-family property (one to two units).
  • Borrowers may receive up to 4% toward closing costs, prepaid items and/or down payment assistance.
  • Lower mortgage insurance expenses.
  • Borrower will not owe origination or discount fees.

Eligibility

  • Property must be the borrower’s principal residence.
  • Loan amounts are capped at $417,000.
  • Credit score must be at least 640.
  • Income limit is $99,000.
  • First-time homebuyers must complete a homebuyer education course.
  • The loan-to-value (LTV) ratio is capped at 97% for one-unit homes and 95% for two-unit homes.

How it works

If you meet the income-limit requirement of $99,000, you can contact a participating lender to begin the prequalification process. From there, you may begin your property search and the lender will help you apply for LHC assistance funds.

LHC Choice Conventional Program

Features

  • Thirty-year fixed-rate mortgage
  • Borrowers may receive up to 4% assistance that may be used for closing costs, down payment assistance and/or prepaid items.
  • Depending on borrowers’ AMI, they may receive up to 2% in additional assistance toward closing costs and prepaid items.
  • Lower mortgage insurance requirements.
  • Available to first-time and repeat homebuyers.
  • No discount or origination fees.
  • Reserves aren’t required.
  • There are no borrower contribution requirements, so you may use personal monetary gifts toward your down payment and closing costs.

Eligibility

  • Property must be a one-unit principal residence.
  • Loans are capped at $424,100.
  • Income limit is $99,000.
  • Credit score must be 640 or higher.
  • First-time homebuyers must complete a homebuyer education course.

How it works

The first step in applying for the LHC Choice Conventional Program is to determine your income eligibility. If your income is $99,000 or less, you can then calculate whether you’d be eligible for the additional 2% assistance toward closing and prepaid costs. You’ll need this guide to find out the income limits in your parish. You may be eligible if your income is below 80% of the AMI in your parish, though an approved lender can walk you through the process and your eligibility.

LHC Advantage Program

Features

  • Reduces mortgage insurance.
  • Lowers mortgage interest rate.
  • Provides $1,500-$2,500 financial assistance from Freddie Mac for borrowers at 80% or 50% of local AMI, respectively.
  • Does not provide down payment assistance.

Eligibility

  • Your income must be less than $99,000.
  • The LTV ratio must be 97% or less.

How it works

As with other LHC programs, the first step in qualifying for the LHC Advantage is determining your income eligibility — in this case, this means determining whether your income is $99,000 or less. From there, you can contact a lender, who will begin the mortgage prequalification process.

Mortgage Revenue Bond (MRB) Program

Features

  • Provides 5% to 9% down payment and closing cost assistance, depending on the loan amount

Eligibility

  • Exclusive to first-time homebuyers.
  • The purchase price of the home cannot exceed $271,164.
  • Income limits vary based on location and family size. You can find these on the LHC website.

How it works

If you meet the income requirements for the MRB Program, you can work with an approved lender to prequalify for a mortgage and begin the search for your home. The lender will help you apply for MRB funds.

Mortgage Revenue Bond Assisted Program

Features

  • Receive up to 4% of your total mortgage amount to be used as down payment and closing cost assistance. The loan is received as a soft second mortgage, meaning it may be forgivable, involve deferred payments or otherwise be subsidized.

Eligibility

  • Exclusive to first-time homebuyers, except in targeted areas.
  • Income requirements vary based on family size and location. You can find the guidelines on the LHC website.
  • Income limits may increase to 140% of AMI if you’re buying in a targeted area, though other factors influence the guidelines as well. Contact LHC to learn whether your chosen location is in a targeted area and whether you meet the income requirements in that case.
  • The purchase price must not be higher than $271,164.

How it works

To learn more about the Mortgage Revenue Bond Assisted Program, visit the LHC website or contact an approved lender.

Delta 100 Program

Features

  • Up to 100% financing
  • Up to 3% assistance for closing costs and prepaid items
  • Thirty-year, 2% fixed-interest-rate mortgage
  • No mortgage insurance required
  • No minimum credit score requirement

Eligibility

  • Exclusive to first-time homebuyers.
  • Loans are capped at $242,000.
  • Borrower must contribute the lesser of 1% of the purchase price or $1,500, and the amount may not include gifts.
  • Borrowers must complete a homebuyer education course.
  • Only single-family properties are eligible.
  • Income must not exceed 80% of the AMI based of the borrower’s parish and household size, and must not exceed $99,000.
  • Home must be located in one of the following Delta parishes:
    • Caldwell
    • Catahoula
    • Concordia
    • East Carroll
    • Franklin
    • Madison
    • Morehouse
    • Pointe Coupee
    • Richland
    • Tensas
    • West Carroll
    • Ouachita (excluding Monroe)

How it works

If you meet the income requirements and plan to buy in an eligible parish, contact an approved lender to learn about mortgage prequalification and how to apply for the Delta 100 Program.

Mortgage Credit Certificate Program

Features

  • Tax credit for 40% of mortgage interest paid each year, capped at $2,000.
  • May be used alongside LHC down payment assistance programs.
  • May be used with first-time homebuyer loans, but not with mortgage revenue bonds.
  • Borrowers may claim the tax credit every year, as long as the property is their primary residence.
  • Product specifically targets first-time homebuyers with low to moderate incomes.
  • Purchase price limits apply as well, based on where you are buying.

Eligibility

  • Income limits are based on where the borrower lives and their family size.

How it works

Use this guide to determine whether your income and location qualify for the Mortgage Credit Certificate Program. If you’re eligible to claim the tax credit, you’ll need to file IRS Form 8396 with your annual return.

Soft Second Program

Features

  • Forgivable second mortgage for 20% of the home price, capped at $30,000.
  • Closing cost assistance up to $5,000.

Eligibility

  • Exclusive to first-time homebuyers, including those who have never owned a home and those who have not owned within the past three years. See the LHC website for a full list of qualifying circumstances.
  • Income must not exceed 80% of the AMI.
  • Only properties in the following parishes are eligible: Acadia, Allen, Ascension, Assumption, Avoyelles, Beauregard, Calcasieu, Cameron, Catahoula, Concordia, East Baton Rouge, East Carroll, East Feliciana, Evangeline, Franklin, Grant, Iberia, Iberville, Jefferson Davis, Jefferson, LaSalle, Lafayette, Lafourche, Livingston, Madison, Morehouse, Orleans, Ouachita, Plaquemines, Pointe Coupee, Rapides, Richland, Sabine, St. Bernard, St. Charles, St. Helena, St. James, St. John the Baptist, St. Landry, St. Martin, St. Mary, St. Tammany, Tangipahoa, Tensas, Terrebonne, Union, Vermilion, Vernon, Washington, West Baton Rouge, West Carroll, West Feliciana, and Winn.

How it works

The LHC recommends that homebuyers interested in the Soft Second Program contact the organization for more information.

National first-time homebuyer programs

Louisiana offers a variety of homebuyer assistance programs, so make sure you’ve reviewed them all to take advantage of any state programs for which you’re eligible. Look into parish- and city-specific programs as well, as you may be able to combine multiple incentives to lower your upfront costs or even the amount of interest and mortgage insurance you’ll pay over the life of your loan.

You may be eligible for national assistance, as well. Take a look at LendingTree’s guide to first-time homebuyer assistance programs to learn whether they apply to you.