Financing Resources for First-Time Homebuyers in Georgia

Buying your first home is an experience full of excitement and anticipation, but the process can also feel overwhelming and sometimes downright scary. Luckily for potential homebuyers in Georgia, there are plenty of programs available to help first-time homebuyers understand the process and even help with the finances.

The U.S. Department of Housing and Urban Development (HUD) offers counseling services to help first-time homebuyers better understand the homebuying process. HUD-approved counseling agencies provide many of these services for free. Some agencies also offer online education programs which, if completed, can help you access certain first-time homebuyer loan programs.

There are a number of HUD-Approved Housing Counseling Agencies in the state.

• City of Albany, Georgia
• NID-HCA Albany (Fletcher)
• Area Committee to Improve Opportunities Now, Inc.
• 1st Choice Credit Union
• Housing Authority of Fulton County
• Columbus Housing Initiative, Inc.
• The Homeowners Employment Corporation
• Atlanta Legal Aid Society, Inc.

Home loan programs in Georgia offer a variety of incentives to potential homebuyers.

• Georgia FHA Loans: These loans are insured by the Federal Housing Administration and they offer first-time homebuyers an affordable down payment (3.5%). However, borrowers will need to pay for mortgage insurance (MIP) which serves as protection for the lender should you default on the loan. Loan limits vary based on county and are calculated based on the median home price for that area. While there are no income limits to qualify for an FHA loan, you will need to meet the debt-to-income ratios allowed by the FHA.
• USDA Rural Housing Loan: While you do not need to be a first-time homebuyer to qualify for this lending program, it’s still a great option for homebuyers of any kind looking to purchase a home in rural Georgia. This loan offers 100% financing, no down payment, and 30 year low fixed rate loans, among other things. There are several types of USDA mortgages. Loans for single-family homes are for qualifying low- and moderate-income borrowers. Income limits vary by location and household size. You can find the specific income requirements on the USDA’s website.
• Housing Choice Voucher (HCV): The HCV is funded by HUD and provides assistance to low-income families to help them transition from renting to owning. To be eligible, applicants must be a current HCV Participant in good standing. Applicants must also meet minimum income requirements and have continuous full-time employment for a year. Families applying for this voucher are required by HUD to make a minimum down payment of 3%, with at least 1% of that payment coming from personal resources.

In addition to the lending programs listed here, the state also has opportunities for down payment assistance.

• Homestretch Down Payment Assistance Program: The Gwinnett County Government’s Homestretch Down Payment Assistance Program offers qualifying first-time homebuyers up to $7,500 of assistance. This comes as a zero-interest loan with deferred payments. To qualify, homebuyers must meet specific criteria including a FICO credit score of 640 and a debt-to-income ratio of 43% or lower. Purchase price limits apply and the completion of an 8-hour homebuyer pre-purchase class.
• Georgia Dream Homeownership Program: Georgia’s Department of Community Affairs provides financial assistance to homebuyers through the Georgia Dream Homeownership Program. Qualifying applicants are eligible for down payment assistance of up to $5,000. Homebuyers must purchase a home in a targeted area and meet income and purchase price limits.
• Georgia Dream Hardest Hit Fund (HHF): Created for first-time homebuyers who have experienced economic challenges, the HHF offers $15,000 per household as a forgivable loan with no interest or monthly payments. After five years, the loan is forgiven and can be used for down payment or closing costs. To qualify you must live in a designated county, have a credit score of 640 or higher, have no felony convictions in the past 10 years, and you must secure your mortgage through the Georgia Dream Homeownership program.

Georgia offers a tax credit for first-time homebuyers. The MCC can assist the borrower in reducing their federal income tax liability and increasing their qualifying income.

To be eligible for this tax credit you must be purchasing a home in a “targeted area.” These areas meet specific criteria related to median family income or have been deemed as an “area of chronic economic stress.” Additionally, to be considered a first-time homebuyer, you cannot have owned property as a principal residence during the last three years. There are further restrictions for qualifying listed in the MCC Program Guide.

If you’re a potential first-time homebuyer in Georgia, you should know there are plenty of programs out there to make the process easy and affordable.