First-Time Homebuyer Programs in Louisiana

The down payment on a new home is often the biggest hurdle for first-time homebuyers. In Louisiana, where the average home value is $198,951, a 20% down payment to avoid private mortgage insurance would amount to $39,790.

Fortunately, first-time homebuyer programs in Louisiana can help you achieve homeownership. There are also mortgages that allow first-time homebuyers to put less down on a home, but these options typically have income requirements and require mortgage insurance. MoneyGeek explores several state-specific and government-backed first-time homebuyer programs for people from different financial backgrounds.

Louisiana offers grants and loans to assist first-time homebuyers with covering both down payment and closing costs. We compiled the first-time homebuyer programs Louisiana Housing Corporation (LHC) offers to help you find the best option for your needs and situation.

LHC's Mortgage Revenue Bond (MRB) Home Program provides affordable financing options for first-time homebuyers with incomes at or below 80% of the area median income. The program offers below-market interest rates and provides down payment and closing cost assistance ranging from 5% to 9% of the loan amount, helping buyers manage upfront expenses. Homebuyers can pair this program with reduced mortgage insurance for conventional loans, which further lowers costs.

The Mortgage Revenue Bond (MRB) Assisted Program helps first-time homebuyers who need support with down payments and closing costs. The program provides 4% of the mortgage amount as assistance in the form of a soft second loan. Borrowers may qualify for reduced mortgage insurance rates for conventional loans. Additionally, homes in targeted areas have more flexible eligibility terms, including higher income thresholds.

The Delta 100 Program offers up to 100% financing for eligible first-time homebuyers in designated Delta Parishes. The program provides a 30-year fixed mortgage at below-market interest rates and up to 3% in assistance for closing costs and prepaid expenses. No minimum credit score is required, and mortgage insurance is not necessary. Borrowers must contribute 1% of the purchase price or $1,500, whichever is less, and complete a homebuyer education course.

The Pathways to Homeownership Program in Louisiana helps first-time homebuyers bridge the affordability gap by offering a soft second loan of up to 20% of the purchase price, capped at $55,000. This program also provides up to $5,000 in assistance for closing costs, bringing the total to $60,000. The soft second loan is forgivable if the borrower lives in the home for 10 years. A repayment is only required if the home is sold or refinanced.

Aside from statewide first-time homebuyer programs in Louisiana, there are also city-specific programs available to help you pursue homeownership in a city of your choosing. Check out the table below for some of the cities in Louisiana that provide first-time homebuyer programs for potential residents.

Louisiana offers zero-down-payment loan programs that allow you to purchase a home without putting money down. USDA and VA loans are two government-backed options with no down payment.

USDA loans are issued by the U.S. Department of Agriculture through its Rural Development Guaranteed Housing Loan program. They are designed to assist rural homebuyers in securing financing with no down payment options. It also aims to support homeownership in eligible rural and suburban areas, making it accessible for those who might not qualify for traditional financing.

These loans offer several benefits, including no down payment requirement, competitive interest rates, and reduced mortgage insurance costs. They cater to low-to-moderate-income buyers who wish to purchase a home in designated rural areas. To qualify, applicants must meet specific income limits, and the property must be located in an eligible area as defined by the USDA.

Eligibility for USDA loans requires the property to be 2,000 square feet or below and situated in a rural area with a population of less than 35,000. Income limits also apply, varying by location. For example, in Lincoln Parish, LA, the income limit for a four-person, low-income household is $51,050, whereas in Red River Parish, LA, it is $48,300. These criteria help ensure that loans reach the intended demographic, promoting homeownership in rural communities.

VA loans are a financing option offered by the U.S. Department of Veterans Affairs to assist veterans, active-duty service members, and certain members of the National Guard and Reserves in purchasing homes. These loans aim to provide affordable homeownership opportunities to those who have served the country.

VA loans offer several benefits, including the absence of a down payment requirement, which eases the financial burden on homebuyers. Additionally, these loans do not require private mortgage insurance (PMI), further reducing monthly payments. VA loans typically have lower interest rates compared to private loans, making them an attractive option for eligible borrowers. As of November 2024, the APR for a 15-year fixed-rate VA loan in Louisiana is 6.27%, while a 30-year fixed-rate VA loan stands at 6.50%.

Eligibility for VA loans depends on several factors, including the length of service or service commitment, duty status and character of service. Moreover, applicants must meet specific income limits based on their location. A valid Certificate of Eligibility (COE) is also required to qualify for a VA loan. Understanding these requirements can help you determine if you are eligible and ready to take advantage of the benefits offered by VA loans.

First-time homebuyers in Louisiana can take advantage of low-down-payment loan programs that allow them to finance their home with a down payment of 3.5% or less. These programs include conventional, FHA and FHA 203(k) loans.

FHA loans and conventional loans are often compared as they are the two most common types of mortgages. FHA loans require at least a 3.5% down payment, while conventional loans can require as low as a 3% down payment for first-time homebuyers. Conventional loans typically have stricter credit score and debt-to-income ratio requirements, making them less accessible for some borrowers compared to FHA loans.

As of November 2024, the current APR for a 15-year fixed-rate conforming loan in Louisiana is 6.08%, while a 15-year fixed-rate FHA loan has an APR of 8.48%. APRs on FHA loans can be higher due to more fees and extra costs associated with borrowing money on government-backed loans.

You can use our FHA vs. conventional loan calculator below to compare FHA and conventional mortgage programs and determine the best option for you.

We have answered some frequently asked questions about first-time homebuyer programs in Louisiana to help you find the best option and move closer to homeownership.

Explore additional MoneyGeek resources for first-time homebuyers in Louisiana to help you with the homebuying process.