North Carolina first-time homebuyer programs

NC Home Advantage Mortgage

“NC Home Advantage is the first mortgage product from North Carolina Housing Finance Agency (NCHFA),” James McDuffie, mid-Atlantic mortgage area manager for U.S. Bank in North Carolina, told us. “It’s [a] 30-year fixed mortgage with down payment assistance up to 3% of the purchase price for customers under the income limit.”

The assistance becomes forgivable over time with the state reducing your obligation by 20% each year from years 11 through 15 until you owe nothing after 15 years. “[You can use] the funds for down payment or closing costs,” McDuffie said. “This reduces the monthly payment or cash to close, allowing [you] to get into the home with little money down.”

To qualify, you must meet the following criteria:

• Have a credit score of at least 640 (or 660 for a new manufactured home)
• Earn an annual income under $140,000
• Have a debt-to-income ratio below 45%
• Buy an eligible property type, which includes single-family homes, townhouses, condos, duplexes or new manufactured homes
• Use the home as your primary residence

Before applying, it’s worth considering the benefits and potential drawbacks of this program.

Pros and cons of the NC Home Advantage Mortgage program

» COMPARE: Best mortgage lenders for first-time buyers

NC 1st Home Advantage Down Payment program

“[The NC 1st Home Advantage Down Payment program] supports first-time buyers and veterans with up to $15,000 in down payment assistance,” said Marinus Leach, principal broker at Landhuis Residential by LPT Realty in Durham. “The key benefit [is] the assistance is forgivable after 15 years, as long as you stay in the home.”

To be eligible for this, you must meet these requirements:

• Have a credit score of 640 or higher (or 660 for a new manufactured home)
• Be a legal U.S. resident
• Be a first-time homebuyer (no homeownership in the past three years) or a military veteran
• Work with an NCHFA-approved lender
• Have a household income at or below 100% of the area median income (AMI)
• Purchase eligible property types, including single-family homes, townhouses, condominiums or new manufactured homes
• Use the home as your primary residence

» MORE: First-time homebuyer benefits

City-specific homebuyer assistance programs

“Many NC cities offer their own programs that can go above and beyond what the state offers — but with more specific eligibility requirements,” Leach said. These local programs often provide higher assistance amounts than state programs, which max out at $15,000. Additionally, you can combine city programs with state programs to get more assistance.

North Carolina homebuyer assistance by city

While specifics vary by city, you can expect these common requirements:

• Complete an eight-hour homebuyer education course
• Secure preapproval for your primary mortgage first
• Work with a city-approved lender
• Use the home as your primary residence
• Meet specific home price limits

Application timelines vary, with Durham operating on a first-come, first-served basis due to limited annual funding.

Community Partners Loan Pool

The Community Partners Loan Pool (CPLP) provides valuable assistance to low- and moderate-income buyers. It offers up to 25% of a home’s purchase price with a maximum of $50,000.

“With home prices outpacing income increases, affordability is a big issue across the state,” McDuffie told us. “These funds allow [you] to reduce [your] loan amounts to something [your] income can accommodate.”

The assistance comes as a zero-interest, deferred second mortgage with no required monthly payments. However, the repayment structure differs from other programs. You repay the full amount when you sell your home or at the end of the loan term, unlike other state programs that offer forgiveness over time.

To qualify for CPLP funding, you must meet these requirements:

• Have a household income at or below 80% of the AMI
• Have a credit score of at least 640
• Have a debt-to-income ratio of 45% or less
• Have a housing expense ratio between 25% and 32% (housing costs as a share of gross monthly income)
• Work with an approved community partner
• Complete homebuyer education and two hours of in-person counseling

Apply to CPLP programs early

The process takes at least 60 days, and counseling is required.

Homeownership Assistance Program

The Homeownership Assistance Program is currently paused. While it was active, it provided up to $30,000 in down payment assistance, plus closing cost help of up to 5% of the sales price for buyers in counties that had been federally designated as storm-affected areas.

“Although [the Homeownership Assistance Program isn’t] accepting applications as of late 2024, it previously provided down payment and closing cost support to first-time and first-generation homebuyers in areas hit by Hurricanes Florence and Matthew,” Leach told us. “It was aimed at long-term recovery and improving housing stability in storm-affected communities.”

Maximum income limits by household size in North Carolina

Many North Carolina programs set income limits at 80% of the AMI, which changes depending on your household size. The chart below can help you determine if your household falls within the limit.

Maximum income based on household size (80% AMI)