Mississippi First-Time Homebuyer Programs

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Updated on Tuesday, February 19, 2019

Intro

New homebuyers looking to buy in Mississippi, home of the moody blues and blooming magnolia trees, may be able to find local assistance programs to help make the purchase possible. These programs target first-time homebuyers by helping with down payments, closing costs and monthly payments.

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Mississippi also offers counseling services that cover anything from buying a home to foreclosures, along with educational courses ideal for first-time buyers. If you’re interested in buying in Mississippi and want to learn more about the various programs offered, read on to determine which might be a good fit for you.

Mississippi first-time homebuyer programs

The Mississippi Home Corp. (MHC) offers several programs geared toward helping first-time homebuyers purchase a home. The agency first came about in 1989, with the help of the Mississippi Home Corp. act, to provide affordable and safe housing to its residents. These programs can offer anything from deferred loan payments to tax credits that can help save extra money.

Eligibility for Mississippi assistance

While all of these homebuyer assistance programs have individual eligibility rules and regulations, most tend to look at a few major criteria, such as a homebuyer’s income, credit score, legal residency and previous homeownership.

Smart Solution Mortgage

Smart Solution Mortgage teams up with participating lenders to offer loans with competitive rates and down payment assistance. It also provides its Smart Solution Second, which is geared toward those who need a second mortgage by offering 3.5% down payment.

What is it?

  • A 30-year fixed rate
  • Offers cheaper mortgage insurance premiums
  • Offers the option to combine a Mortgage Credit Certificate (MCC) with the possibility of claiming 40% of mortgage interest (up to $2,000 per year) as credit on federal income taxes and using the rest as a deduction

Requirements

  • Must be the buyer’s primary residence
  • Household income cannot be more than $95,000 per year
  • Must be U.S. resident
  • Minimum credit score of 620 (for Federal Housing Administration [FHA], U.S. Department of Agriculture [USDA] or U.S. Department of Veterans Affairs [VA] loans and conventional loans)
  • The property (new or existing) must be in Mississippi and should be one of the following: single-family home, condominium, townhouse or duplex

MRB 7

Mortgage Revenue Bonds program (or MRB 7) helps ease the burden of coming up with a down payment by providing $7,000 to be put toward it.

What is it?

  • A 30-year fixed rate mortgage
  • The buyer has various loan options (FHA, VA, USDA Rural Development and Fannie Mae/Freddie Mac Loans)
  • No restrictions on liquid assets
  • Offers down payment assistance
  • Also offers a 10-year deferred second mortgage with no interest, which can be forgivable after 10 years

Requirements

  • Must be a first-time homebuyer (not allowed to have owned a residence in the past three years), but veterans and residents in “target areas” such as Pike and Sharkey counties, are exempt.
  • Need to meet credit requirements and loan-underwriting requirements, depending on the specific product.
  • Income level cannot exceed maximum in the county in which you plan to live. For example, Clarke County residents with a household of one or two cannot exceed $52,800 in income, and those with three or more max out at $60,720.
  • Must be a U.S. resident.
  • The property must be in Mississippi and can be either a new or existing single-family home, condominium or townhouse.
  • Purchase price must not exceed maximum for specific county.

Housing Assistance for Teachers (HAT)

The Housing Assistance for Teachers Program (HAT) offers homebuying assistance to teachers who want to live in rural Mississippi, where there is a shortage of educators.

What is it?

  • A 25- or 30-year fixed-rate loan that provides up to $6,000 toward closing costs
  • Offers down payment assistance
  • Has no income limits (except when pairing HAT with another MHC loan)

Requirements

  • Must be a teacher for three years in a school district with a shortage of educators.
  • Must meet certain credit requirements.
  • Required to pay at least 1% of the property price for the down payment along with one month’s reserves.
  • The property location needs to be within an eligible county, such as Bolivar or Marshall. Loan-to-value ratio (LTV) cannot be more than 97%.
  • Must have an acceptable credit score (required credit score varies depending on LTV).
  • Must have mortgage insurance, depending on LTV.

Mortgage Credit Certificate (MCC)

The Mortgage Credit Certificate (MCC) can provide a tax credit up to 40% of the loan’s annual interest (actual amount depends on interest already paid), allowing for a possible 60% to be used as a deduction.

What is it?

  • A tax credit of up to 40%
  • The credit can be combined with MHC’s other programs and various loan products (conventional, FHA, VA and RD financing)

Requirements

  • Must be a first-time homebuyer (those in “target areas,” including Benton and Copiah, are exempt).
  • Can’t exceed household income limits, which vary by county. Clay County, for example, cannot exceed $63,360 for a household of one to two, or $73,920 for three or more.
  • The tax credit cannot be more than $2,000 per year.
  • Must live in a single-family home as permanent residence, and all manufactured homes need to be approved by the U.S. Department of Housing and Urban Development (HUD)
  • Purchase price must not exceed limits for specific county.
  • Must pay a $300 non-refundable reservation fee.
  • Must provide property sales contract and federal income tax returns (from the last three years).
  • Must complete a homebuyer education course.

How to apply

To apply for any of the homebuyer assistance programs with the Mississippi Home Corp., you will need to work with a participating lender. You can start this process by searching the agency’s website for a participating lender and reach out to them directly.

These lenders will be able to match you with the specific program(s) that work best for your needs, depending on your financial profile and credit history. Your income and credit score will be considered, along with the county where you are looking to purchase your new home.

National first-time homebuyer programs

Mississippi has many different programs that can come in handy when you’re looking to buy your first home there. However, the state may not have the perfect program that works for you. If that is the case, you may want to look into other programs that are available nationwide. Some of these programs include the USDA Rural Development program targeting lower-income residents who want to buy a home in a specified rural area, along with Habitat for Humanity, the FHA and the VA. Learn more about these programs by checking out LendingTree’s general guide to first-time homebuyer programs. LendingTree owns MagnifyMoney.

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