It is an exciting time of year for buying a home, and 2019 looks to be one of the best yet for home buyers. Not only is it a great city with a bustling economy and lively cultural and culinary scenes, but home values are on the rise. No wonder Columbus, Ohio is listed as one of the ten best cities for first-time home buyers.

The State of Ohio and the City of Columbus offer a number of programs helpful to first-time buyers and those purchasing their next home who aim to join in the excitement that is Columbus, Ohio. The majority help with financing and down payments, while others offer tax credits and reimbursement for remodeling. Each has its pros and cons depending on the buyer’s situation, but they are worth reviewing to see if they might be helpful.

City of Columbus American Dream Down Payment Initiative (ADDI) Program

The City of Columbus ADDI Program works in partnership with local lenders to provide funds for homeownership for low and moderate income, first-time homebuyers. (A first-time home buyer is defined as someone who has not owned a home for three years.) The property must be located in the City of Columbus and the Columbus City School District.

One of the nicest benefits of this program is that it offers a deferred, forgivable loan to be used toward a down payment and closing costs. Buyers have to live in the home for five years after closing. It cannot be sold, rented, or transferred during that time and must remain the buyer’s sole residence. After five years, the mortgage and restrictive covenant are released on the property and the loan is forgiven. Participants must meet certain income guidelines, receive homebuyer education from a Housing Division HUD-certified agency, and purchase a single-family home or condominium in the City of Columbus. 

Please visit the City of Columbus Housing Division for more information.

State of Ohio Homeowner Assistance Programs 

Offered by the Ohio Housing Finance Agency (OHFA), these programs offer assistance to first-time buyers, low to moderate income buyers, and others looking to purchase or remodel their homes. The state works with various mortgage companies, lenders, and credit unions to offer home loans to participants. Benefits of participation include lower mortgage rates, down payment assistance, tax credits and combined financing for buying and renovating a home. What’s not to like?

OHRA requires successful applicants to take part in a free homebuyer education course. Down payment assistant is available for first-time buyers (those who have not owned a home in the last three years) and is forgiven after seven years unless the home is sold or refinanced during that period.

OHFA also offers target area loans to purchase a home with an affordable mortgage and interest rate in specific areas the state is hoping to revitalize. Home buyers should peruse a map on the site to see if a property they are interested in is located in one of these areas or if these areas are near where they hope to settle.

Home Buyer Programs

First-time buyers have a number of options available through OHFA. Many help low and moderate-income borrowers get 30-year, fixed-rate, conventional, Federal Home Administration, Veterans Affairs, and the U.S. Department of Agriculture Rural Development mortgages. These offer relaxed income and purchase price limits. OHFA also has many other programs for first-time buyers and others. Participation can result in lower mortgage rates, down payment assistance, tax credits, and combined financing for buying and renovating a home.

Veterans who have been honorably discharged are eligible for VA loans and do not need to be first-time home buyers. Some rules do apply, of course, but it is worth noting that many of these loans can also be used by qualifying repeat buyers through the OHFA Next Home Program. Rules vary slightly from those for first-time buyers. Property types where these program funds can be used include existing single-family homes, duplexes, triplexes, four-plexes, and condominiums, modular homes and newly built sing-family homes.

Mortgage Tax Credit

First-time home buyers who combine an OHFA mortgage and a down payment assistance program may be able to receive a mortgage credit certificate. That may sound like a lot of hoops to jump through, but that certificate allows a tax credit of up to 40-percent of the annual mortgage interest paid. The real excitement with this one, though, is that the certificate can be used annually for as many as 30 years if the property is your private residence. Non-OHFA mortgage first-time buyers can also receive tax credits, so don’t despair.

Buyers/homeowners will need to owe a tax balance to claim the deduction, and there is a limit on the maximum amount of possible credit. The credit also can’t be more than you owe after deductions, exemptions, and the like.

Down Payment Assistance

First-time home buyers and repeat buyers (those purchasing the next home) may also qualify for down payment assistance of 2.5-percent or 5-percent of the home’s purchase price. Considering that a recommended 20-percent is the ideal amount, this can give home buyers a nice leg up in the purchase process. However, the larger amount of assistance does come with a higher interest rate, so you’ll have to weigh that against the overall financial situation. It is possible, though, to use the funds for a down payment, closing costs, or other qualifying pre-closing expenses. After seven years, the loan is forgiven. However, if you sell or refinance before that, you will have to repay the money. 

Ohio Heroes

First-time home buyers and repeat buyers who work in helping professions – veterans, activity duty military members or reservists (including surviving spouses), police, paid and volunteer firefighters, emergency medical technicians, paramedics, doctors, nurse practitioners, registered nurses, licensed practical nurses, state tested nurse aides, and pre-K through grade 12 teachers, administrators, and counselors – can apply for discounted mortgage rates. These can also be combined with the down payment assistance mentioned above.

Grants for Grads

Ohio is home to any number of fantastic colleges and universities, and the state would like to encourage their graduates to stay. Those who are first-time buyers and graduated in the past 48 months with an associate, bachelor, master, or doctoral degree from an institution recognized by the U.S. Department of Education.

Participants can also receive discounted mortgage interest rates that can combine that with down payment assistance. Grants for Grads participants will have their assistance forgiven after just five years unless the home is sold and they move to a new state. If that happens, the loan will have to be repaid. 

OHFA Advantage

Borrowers, first-time and repeat buyers, whose income is 80-percent or less of their county’s median income can receive additional help with down payments and closing costs. A 0.5-percent grant is available, and for those earning 50-percent or less of the median income, a two-percent grant is available. These, however, can only be used with a conventional mortgage. 

To explore all the links, please visit OHFA’s website.

Purchasing a home is an exciting prospect, and there are plenty of programs available to help you find and settle into the home of your dreams without breaking the bank.