Alabama Housing Finance Authority Debuts Step-Up Program
The Alabama Housing Finance Authority (AHFA) is dedicated to making homeownership more attainable for those who dream of owning a home but face financial challenges. The AHFA’s Step Up Program is specifically designed to provide essential financial support to eligible applicants, assisting them in managing the upfront costs that come with a mortgage transaction. These costs typically include the down payment, closing costs, and prepaid items, which can often be substantial barriers to homeownership.
Available Assistance: The Step Up program is a pivotal initiative for low- to moderate-income applicants in Alabama. It offers down payment assistance of up to 3% of the purchase price, significantly easing the financial burden on homebuyers. This assistance is provided as a 10-year second mortgage, which is combined with a 30-year, fixed-rate primary mortgage. This structure ensures that the assistance is manageable and sustainable over the long term, aligning with the homebuyer’s financial capabilities.
Eligibility Requirements: To be eligible for the Step Up program, applicants must meet specific criteria. A minimum credit score of 620 is required to qualify. Additionally, the annual household income of applicants must not exceed $97,300. This income limit applies regardless of family size or the location of the property within Alabama. The program mandates that the property be financed through an AHFA-approved conventional loan obtained from a participating lender. Furthermore, all applicants are required to complete a homeownership education course. This course is designed to equip potential homeowners with the knowledge and skills needed to navigate the complexities of owning and maintaining a home.
Property Guidelines: The Step Up program has clear guidelines regarding the types of properties that qualify. Eligible properties include both new and existing homes located in Alabama. The key requirement is that the property must be intended as the applicant’s primary residence and must be occupied within 60 days of closing. This condition ensures that the program benefits genuine homebuyers rather than investors or those looking for secondary or vacation homes.
In summary, the Alabama Housing Finance Authority’s Step Up Program is a significant resource for individuals and families striving to achieve homeownership in Alabama. By providing down payment assistance and requiring a combination of homeownership education and creditworthiness, the program not only facilitates the initial purchase of a home but also promotes responsible and sustainable homeownership. The Step Up Program is thus an important tool in AHFA’s mission to help Alabamians realize their dream of owning a home.
