2023 Georgia First-Time Homebuyer Programs

Georgia first-time homebuyer programs help residents achieve their dreams of homeownership with affordable financing options and down payment assistance. But you’ll need to meet certain eligibility requirements to qualify, like meeting income and home purchase price limits. Learn all the ins and outs of Georgia’s first-time homebuyer programs as well as what you’ll need to do to qualify and apply below.

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First-time homebuyer programs in Georgia

Georgia offers several statewide homebuyer down payment assistance (DPA) options through its Georgia Dream Homeownership Program, run by the Georgia Department of Community Affairs. The City of Atlanta offers similar down payment assistance through its Atlanta Housing DPA Homeownership Program that also must be paired with an approved fixed-rate mortgage.

Standard Down Payment Assistance

Open to any Georgia homebuyer who meets its qualifications, this down payment help comes in the form of a $10,000 loan with a 0% interest rate. Separate from your mortgage, this other loan does not need to be repaid until you sell your home or refinance it. Those interested in using this assistance will need to put in $1,000 of their own money as well as meet several other requirements.

Requirements

• Be a first-time homebuyer, homebuyer who has not owned a home within the past three years, or a homebuyer purchasing property in a certain “targeted” or lower-income area
• Credit score of 640 or higher
• Hold no more than $20,000 or 20% of the home’s sale price (whichever is greater) in assets, not including retirement accounts like IRAs or 401(k)s
• Maximum household income 80% of area median income (AMI), depending on where you live
• Within home price limits, dependent on county
• Contribute a minimum of $1,000 of your own funds towards the purchase
• Complete homebuyer education courses

Pros and cons

PEN Down Payment Assistance

This down payment assistance program is exclusively available to public protectors, like police or firefighters; educators and healthcare providers or those working in such industries or active military members. It offers a 0% interest down payment loan amount up to $12,500.

Requirements

• Work as a public protector, educator, health care provider or in those industries, or be an active military member
• Be a first-time homebuyer, homebuyer who has not owned a home within the past three years, or a homebuyer purchasing property in a certain “targeted” or lower-income area
• Credit score of 640 or higher
• Hold no more than $20,000 or 20% of the home’s sale price (whichever is greater) in savings or investments, outside retirement accounts like IRAs or 401(k)s
• Maximum household income 80% of AMI
• Maximum home sales price, depending on county
• Contribute a minimum of $1,000 of your own towards the purchase
• Complete homebuyer education courses

Pros and cons

CHOICE Down Payment Assistance

This variation of the Georgia Dream down payment help is only available to those with a disability or who have a family member with a disability. It offers a $12,500 down payment loan, which comes with a 0% interest rate.

Requirements

• Have a family member living with a disability
• Be a first-time homebuyer, homebuyer who has not owned a home within the past three years, or a homebuyer purchasing property in a certain “targeted” or lower-income area
• Credit score of 640 or higher
• Hold no more than $20,000 or 20% of the home’s sale price (whichever is greater) in savings or investments outside retirement accounts like IRAs or 401(k)s
• Maximum household income subject to 80% of AMI
• Maximum home sales price, depending on home’s location
• Contribute a minimum of $1,000 of your own towards the purchase
• Attend homebuyer education courses

Pros and cons

Atlanta Housing Homeownership Down Payment Assistance Program

The Atlanta Housing Down Payment Assistance program helps residents looking to buy a home, townhouse or condo in the city of Atlanta with up to $25,000 in forgivable loan. You’ll have to meet eligibility requirements and remain in the home for more than a decade.

Requirements

• Be a first-time homebuyer or a homebuyer who has not owned a home within the past three years
• Your income cannot exceed 80% of the area’s median income
• Hold no more than $25,000 in assets outside retirement accounts like IRAs or 401(k)s
• Take out a fixed-rate mortgage, though the loan term can be 15, 20, 25, or 30 years
• Be a Georgia resident for at least six months before applying
• Contribute a minimum of $1,500 of your own towards the purchase
• Complete an eight-hour HUD-approved homebuyer education class
• Buy a home with a maximum home sales price of $335,000, located within the City of Atlanta

Pros and cons

Georgia first-time homebuyer qualifications

To qualify for a first-time homebuyer program in Georgia:

→  Be a first-time homebuyer, homebuyer who has not owned a home within the past three years, or a homebuyer purchasing property in a certain “targeted” or lower-income area

→  Minimum credit score of 640 or higher

→  Liquid assets (outside of retirement accounts) subject to limits, depending on the program

→  Maximum household income cannot exceed 80% of AMI

→  Certain profession and military service requirements may apply, depending on the assistance program

→  Buy a home with a maximum sales price, subject to county limits

→  Contribute a minimum of $1,000 of your own funds (for Georgia statewide programs), or of $1,500 for City of Atlanta program

→  Complete an approved homebuyer education course

→  For Georgia Dream down payment assistance, you’ll need to be approved by a participating lender for a 30-year fixed-rate mortgage. The Atlanta Housing Homeownership Program that also must be paired with an approved fixed-rate mortgage.

If you meet those requirements, getting assistance through one of Georgia’s first-time homebuyer programs will require you to go through a number of different steps, outlined below, but the whole process usually only takes about 60 days to complete.

1. Find a participating lender

You’ll first need to apply and be approved for a mortgage with a participating lender in the Georgia Dream program. The same applies for the Atlanta Housing program, although they maintain a separate list of participating lenders. Consider reaching out to a few different banks or mortgage companies to compare rates and loan terms. Both programs permit mortgages with conventional loans, FHA loans, VA loans or USDA loans, though the term requirements vary.

2. Search for your new home

Once you’re pre-qualified for a mortgage loan, you can begin house hunting. But you’ll need to limit your search to properties selling below the purchase price limits imposed by both programs.

3. Complete a homebuyer education class

To get first-time homebuyer assistance through Georgia Dream or Atlanta Housing, you must complete a homebuyer education course approved by the Department of Housing and Urban Development (HUD). You can find a list of all accepted in-person and online education options on the Georgia Dream website. Expect to pay $50 to $100 for these courses.

4. Get approved for down payment assistance

You will need to provide verification that you meet the requirements for your desired program, including that you meet the timeline and asset requirements for assistance. This may include the past three years’ IRS transcripts, signed completed personal tax returns, a credit report, and a fraud report as well as other forms — all of which are listed on the Georgia Dream website. Once the lender has all the necessary paperwork and approves your mortgage application, they will send that information on to the Department of Community Affairs for a final review and funding approval for your down payment assistance.

5. Close on your loan

The final step of any homebuying process involves closing on your mortgage. This is when you’ll sign the paperwork ang get the keys to your new home.

Understanding Georgia first-time homebuyer down payment assistance

If you’re looking for first-time homebuyer assistance in the Peach State, Georgia’s first-time homebuyer programs may help you with making a down payment. However, down payment assistance comes in several forms.

Deferred second mortgage

The statewide Georgia Dream down payment assistance programs come in the form of a deferred second mortgage. This means they act as a second lien on your property after your primary mortgage — which, in the case of the Georgia Dream program, must be a 30-year, fixed rate mortgage. These programs typically help cover down payment and closing costs and, in the case of Georgia Dream, are at 0% interest rate. It is called deferred because the payments may be due if you don’t stay in the home for a given time period or when a certain event happens, like selling, refinancing, as is the case of the Georgia Dream programs.

Forgivable second mortgage

A forgivable second mortgage is also a secondary lien placed on a home that can help buyers with down payment and closing costs. However, the main difference from a deferred second mortgage is that a forgivable second mortgage does not need to be repaid, as long as certain conditions are met in the initial loan agreement. The most common condition for forgiveness is an occupancy requirement, so this second mortgage could be forgiven in full, provided the owner lives in the home for a set period of time. For example, the Atlanta Housing Homeownership Down Payment Assistance Program offers a forgivable second mortgage; homeowners are required to live at their property for more than 10 years to receive forgiveness.

Grant

This form of assistance does not require a second mortgage lien to be placed on your property and can instead be viewed more like a gift. The money provided typically does not need to be repaid. Georgia does not currently offer statewide first-time homebuyer down payment assistance grants.

Mortgage credit certificate

A mortgage credit certificate provides a tax credit worth up to $2,000 annually, helping make a person’s monthly mortgage payments more affordable. The value of the tax credit depends on the total interest you’ve paid on your mortgage that year and the percentage of such interest your state will allow you to claim on your federal tax return — usually between 20% and 40%. Georgia does not offer mortgage tax credit certificates.

How much of a down payment do I need to buy a house in Georgia?

The kind of mortgage loan you’re applying for will often determine the size of the down payment you’ll need. For instance, most conventional loans only require a 3% minimum down payment. FHA loans, meanwhile, require 3.5% for borrowers with credit scores of 580 or above or 10% for those with weaker scores. And many USDA and VA loan borrowers need to put nothing down.

Can I qualify for down payment assistance in Georgia?

Your household income must fall below certain limits and the home you’re looking to buy must also fall below a set sales price in order to access Georgia’s statewide down payment assistance options. In most parts of the state, this means your household income cannot exceed $74,500 as an individual or a couple or $86,000 as a household of three or more, and your new home should cost $395,000 or less, but maximum amounts may vary depending on the county.

How do I apply for Georgia first-time homebuyer down payment assistance?

You’ll first need to find a lender participating in the Georgia Dream program and become pre-qualified for a 30-year, fixed-rate mortgage with them. Then after attending a homebuyer education course and finding your dream home within the program’s price limits, your lender will finalize your mortgage application and send it off to the Georgia Department of Community Affairs for a final review and funding approval.

Other first-time homebuyer loan programs

Conventional loans

Conventional loans are mortgages that are not backed by any government entity and typically come with more stringent qualification standards than those with government guarantees. Down payment and credit score requirements will vary depending on the lender and the type of conventional loan you chose, but Fannie Mae and Freddie Mac may permit first-time homebuyers to put as little as 3% down.

FHA loans

Backed by the Federal Housing Administration, FHA loans can help borrowers with lower credit scores find a home. They do require a down payment of at least 3.5% for those with a credit score of 580 or higher, while individuals with scores ranging from 500 to 579 will need to put down 10%. Your home purchase price will need to stay within county-level limits.

VA loans

VA loans are mortgages guaranteed by the U.S. Department of Veterans Affairs (VA) and as such are only available to active-duty military members, veterans and eligible surviving spouses. These loans do not require a down payment, and may not require minimum credit scores. VA loans do come with a funding fee cost between 0.5% and 3.6% you’ll need to pay.

USDA loans

If you’re looking to buy a home in a rural area, a USDA loan may be a good option to consider. These mortgages, backed by the Department of Agriculture, require no down payment but to qualify, you must meet income limits and the property must be in a USDA-designated rural area.

What are the best first-time homebuyer loans?

The best home loan for a first-time homebuyer is one that provides affordable monthly mortgage payments. For those with weaker credit scores or limited money to put toward a down payment, a government-backed option, like the FHA, VA or USDA loan, may be viable options. Conventional loans could also be a good option, depending on your credit score.

Home price trends in Georgia’s major areas

Home prices are on the rise across Georgia, meaning most homebuyers across the state will pay steeper monthly mortgage payments than they would have previously.

For instance, in Fulton County, where Atlanta is located, the typical monthly payment on a 30-year fixed-rate mortgage is $2,470, or $1,021 more than it was a year ago, according to data from the National Association of Realtors (NAR). In Chatham County, where picturesque Savannah is located, payments rose $648 a month to reach $1,530. And Richmond County, home to Augusta, and Bibb County, home to Macon, both saw payments jump by more than $320 a month.

Is there a first-time homebuyer tax credit in Georgia?

Georgia does not currently offer any tax breaks for first-time homebuyers, however, residents can deduct mortgage interest paid from their federal taxes, if they itemize their tax return.

What are the current mortgage rate trends in Georgia?

Home prices aren’t the only thing increasing Georgians’ monthly mortgage payments. Mortgage interest rates have risen over the past year, currently at 6.28% for a 30-year fixed rate mortgage — almost two percentage points higher than just a year ago, according to Freddie Mac’s Primary Mortgage Market Survey. The good news? Rates have begun to slide back down recently, leaving behind the 7.08% mark they hit in November 2022, though not at the same pace of their ascent. You can find rates for your home town and for Georgia on LendingTree’s mortgage rate page.