First-Time Homebuyer Programs in Ohio

The down payment on a new home is often the biggest hurdle for first-time homebuyers. In Ohio, where the average home value is $230,250, you would need a down payment of $46,050 to avoid private mortgage insurance.

Fortunately, first-time homebuyer programs are available in Ohio to help achieve homeownership. There are also mortgages that allow first-time homebuyers to put less down on a home, but these usually 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.

Ohio offers grants and loans to assist first-time homebuyers with down payments and closing costs. To help you find the best option for your needs, we've compiled the first-time homebuyer programs offered by the Ohio Housing Finance Agency (OHFA).

The OHFA Homebuyer Program provides 30-year fixed-rate mortgages to first-time and repeat homebuyers in Ohio with low to moderate incomes. The program includes FHA, VA, USDA-RD and conventional loan options and can be combined with OHFA’s other programs. It's worth noting that borrowers are required to complete homebuyer education through a HUD-approved agency after applying with a lender.

The YourChoice! Down Payment Assistance program provides homebuyers with either 2.5% or 5% of the home's purchase price, which can be applied toward the down payment, closing costs or other pre-closing expenses. This assistance is structured as a forgivable loan, with full forgiveness after seven years if the home is not sold, refinanced or transferred within that time.

The OHFA Next Home Program offers 30-year fixed-rate mortgages to repeat homebuyers in Ohio, with conventional, FHA, VA, and USDA loan options. Borrowers can also access YourChoice! Down Payment Assistance, providing up to 2.5% of the purchase price for down payments or closing costs. This program is designed for those who may not qualify as first-time buyers but meet specific income and purchase price requirements.

The OHFA Mortgage Tax Credit allows eligible Ohio homebuyers to reduce their federal tax liability each year based on a percentage of their mortgage interest paid, saving up to $2,000 annually.
For buyers with OHFA mortgage loans, the Mortgage Tax Credit Plus provides a 40% credit rate on mortgage interest. This credit can be paired with a mortgage interest deduction for greater tax benefits. Homebuyers are also able to couple the mortgage tax credit with 2.5% down payment assistance.
Mortgage Tax Credit Basic, meanwhile, offers a reduced credit without requiring an OHFA loan or homebuyer education: 30% for bank-owned properties, 25% for target area properties and 20% for all other properties.

Aside from statewide first-time homebuyer programs in Ohio, 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 Ohio that provide first-time homebuyer programs for potential residents.

In Ohio, there are zero-down-payment loan programs available that allow you to purchase a home without putting money down. USDA and VA loans are two government-backed options that offer no down payment requirements.

USDA loans are designed to help homebuyers in rural areas secure affordable housing. Issued by the U.S. Department of Agriculture through its Rural Development Guaranteed Housing Loan program, these loans aim to assist those who may not qualify for traditional financing options.

USDA loans offer several benefits, including no down payment requirement and competitive interest rates. They are available for properties in designated rural areas, with the goal of promoting homeownership in less densely populated regions. Borrowers must meet specific criteria, including income limits and property requirements.

Eligibility for USDA loans requires the property to be 2,000 square feet or less and located in a rural area with a population under 35,000. Additionally, borrowers must adhere to income limits based on their location. For example, in Darke County, OH, the income limit for a four-person, low-income household is $66,400, while in Erie County, OH, it is $72,900. Understanding these requirements helps determine if a USDA loan is a suitable option for your homebuying needs.

VA loans are a specialized mortgage option issued by the U.S. Department of Veterans Affairs designed to assist veterans, active-duty service members, and certain members of the National Guard and Reserves in purchasing homes. These loans provide an opportunity for those who have served to achieve homeownership with favorable terms.

VA loans offer several benefits that make them an attractive option for eligible homebuyers. One of the most notable features is the no-down payment requirement, allowing buyers to finance 100% of the home's value. Additionally, VA loans do not require private mortgage insurance (PMI), which can significantly reduce monthly payments. Generally, VA loans come with lower interest rates compared to traditional loans. As of November 2024, the APR for a 15-year fixed-rate VA loan in Ohio is 6.20%, while a 30-year fixed-rate VA loan carries an APR of 6.26%.

To qualify for a VA loan, you must meet specific eligibility criteria. These include your length of service or service commitment, duty status, and character of service. Additionally, you may need to meet certain income limits based on your location. A valid Certificate of Eligibility (COE) is also required to demonstrate your qualification for the loan. Understanding these requirements can help you determine your eligibility and take advantage of the benefits VA loans offer.

First-time homebuyers in Ohio 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 a minimum down payment of 3.5%, while conventional loans can require as low as 3% for first-time homebuyers. Conventional loans typically have stricter credit score and debt-to-income ratio requirements, making FHA loans more accessible for those with lower credit scores.

The current APR for a 15-year fixed-rate conforming loan in Ohio is 5.99% as of November 2024. In comparison, the APR for a 15-year fixed-rate FHA loan is 8.04%. APRs on FHA loans can be higher because there are often more fees and extra costs associated with borrowing money on government-backed loans.

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

We have addressed frequently asked questions about first-time homebuyer programs in Ohio to help you identify the best option and move closer to achieving homeownership.

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