A Guide For First-Time Home Buyers In Ohio: Programs And Grants

There are several state programs you can qualify for as a first-time home buyer in Ohio. Programs are available to help recent college graduates, veterans and moderate-income borrowers.

But before applying, it’s a good idea to understand the eligibility requirements and how to apply. That way, you increase the likelihood of your application being successful.

Who Is Considered A First-Time Home Buyer In Ohio?

To qualify for many of the Ohio Housing Finance Agency (OHFA) programs, you must be a first-time home buyer. Ohio considers you a first-time home buyer if you haven’t owned a primary residence within the last 3 years.

Ohio Home Buyers At A Glance

Many Americans enjoy living in Ohio thanks to its affordable cost of living, abundance of outdoor activities and thriving cities. Cincinnati, Dayton and Columbus are frequently considered some of the best places to live in Ohio.

And Ohio is one of the hottest real estate markets in the country thanks to its affordable housing options. Here’s an overview of the housing stats in Ohio:

• Average credit score: According to Experian™, the average credit score in Ohio was 715 in 2021.
• Median household income: In 2020, the median household income in Ohio was $58,116, according to the United States Census Bureau.
• Average sale price: In September 2022, the average sales price in Ohio was $260,232, according to Ohio REALTORS^®. While that’s a 7.1% increase from September 2021, it’s still under the U.S. average. The Census Bureau says the average sales price in the U.S. was $517,700 in September 2022 – almost double the price of the average Ohio home.

National First-Time Home Buyer Loan Options

The following mortgages and programs are available for first-time home buyers in Ohio and across the U.S.:

• Conventional loans: A conventional loan is a mortgage offered through a private lender and is not insured by the government. You can take out a conventional loan to purchase a new home or refinance your existing home. To qualify, you’ll typically need a credit score of 620 or higher and a minimum down payment of 3%. However, keep in mind, if your down payment is less than 20%, you’ll need to pay private mortgage insurance (PMI).
• FHA loans: FHA loans are backed by the Federal Housing Administration (FHA), making the home buying process more affordable for low-income borrowers. Depending on your lender and down payment, you can qualify with a credit score as low as 500. Like many lenders, our sister company, Rocket Mortgage^®, requires a minimum down payment of 580.
• VA loans: VA loans are mortgages for veterans, active service members and eligible spouses. There are no down payment requirements and flexible credit requirements. You’ll need to receive your certificate of eligibility (COE) to qualify for a VA loan.
• USDA loans: USDA loans are for low-income borrowers looking to move to rural areas. To qualify, you must meet the income limits and your home must be located in a USDA rural designated area.

First-Time Home Buyer Programs In Ohio

Homeownership has become less affordable for many Americans, which is why programs are available to help qualifying borrowers. Here are some first-time home buyer programs you may want to consider when buying a house in Ohio.

OHFA Mortgage Programs

OHFA offers loan options to first-time home buyers, including 30-year fixed-rate FHA, VA, USDA and conventional mortgages. The agency works with lenders to make these loans available to qualified borrowers.

You must meet one of the following requirements to qualify for an OHFA first-time home buyer program:

• You haven’t owned a primary residence in the last 3 years
• You’re a veteran who has been honorably discharged
• You’re purchasing a home in a target area

Down Payment Assistance In Ohio

Here are some down payment assistance programs and grants available for Ohio home buyers.

Communities First

The Port of Greater Cincinnati Development Authority (The Port) provides financing, down payment assistance and closing cost assistance through its Communities First program. And since the assistance is considered a grant, it won’t add anything to your mortgage. To qualify, you must meet income and debt-to-income ratio limits as well as have a minimum credit score of 640, which may be subject to change.

Your Choice! Down Payment Assistance

If you’re looking for down payment assistance or help with closing costs, this program is a good option for you. You can choose either 2.5% or 5% of the home’s purchase price, and the funds can be applied toward your down payment or closing costs. If you stay in the home for at least seven years, the assistance will be forgiven.

Ohio Heroes

The Ohio Heroes program is available for Ohio residents who work in public service. If you qualify, you’ll receive a discounted mortgage interest rate and can choose to add on down payment assistance.

The program is available to individuals in the following careers:

• Veterans and active-duty military members
• Police officers, firefighters, paramedics and EMTs
• Physicians, nurses, nurse practitioners and STNAs
• Teachers, school administrators and counselors

Grants For Grads

If you recently graduated from college, you may be eligible for Grants For Grads. This program provides a discounted mortgage interest rate to recent graduates looking to put down roots in Ohio.

Along with meeting certain income and purchase price limits and credit score requirements, you must have graduated within the last 48 months with one of these degrees:

• Associate
• Bachelor's
• Master's
• Doctorate
• Another post-graduate degree from an accredited college or university

Ohio Mortgage Tax Credit

Another resource OHFA provides is a mortgage tax credit program, and there are two ways to take advantage of it:

Using the tax credit in conjunction with OHFA's First-Time Homebuyer program, will get you a tax credit that’s 40% of the home mortgage interest – up to $2,000 annually.

If you use the tax credit with another lender, your tax credit will be 20%. However, if you purchased in a targeted area, it will be 25%. And if you purchased a bank-owned property, it will be 30%.

First-Time Home Buyer Programs By Location In Ohio

Here are some resources available for homeownership assistance programs that are available based on the city you live in:

• Cincinnati/Hamilton County Homeownership Programs
• Cleveland/Cuyahoga County Homeownership Programs
• Columbus/Franklin County Homeownership Programs
• City of Toledo

The Bottom Line

There are plenty of resources available to help first-time home buyers in Ohio. If you can’t take advantage of the programs offered by the OHFA, you may be able to find national programs available. If you’re ready to start the mortgage approval process, you can apply today with Rocket Mortgage.