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Our Programs

FirstHome Mortgage
Downpayment assistance up to $7,000
Job loss protection
Mortgage Credit Certificates (MCC)

FirstHome Mortgage

We sell tax-exempt Mortgage Revenue Bonds to investors and use the funds to finance low-cost mortgages for first-time home buyers whose income has kept them out of the housing market. The mortgages are available to home buyers who haven’t owned a home in the past three years, and those who buy homes in economically distressed areas.

Because these loans are financed with Mortgage Revenue Bonds, you may hear lenders refer to them as “MRB” loans.

Partnering with our bankers and mortgage companies statewide, we offer 30-year, fixed rate conventional, FHA, VA, and USDA mortgages at interest rates that are approximately one percentage point below market.

Down payments are usually 0% to 3% of the sales price. In addition, 100% financing may be available for conventional, VA, and USDA loans.

How does it work?

A decrease of one percentage point in the interest rate could increase your customer’s purchasing power by approximately $15,000. This could be just the difference a buyer needs to qualify for one of your homes.

If a client has an annual income of $44,000, and a car payment and other debts total $400 a month, that client would have approximately $1,100 for a monthly house payment. Depending on where the home is located, property taxes and hazard insurance will cost about $275, leaving $825 to pay the principal and interest on the mortgage.

The chart below shows what the purchasing power would be based on varied interest rates.

Home buyer eligibility

To qualify, a home buyer:

• Must be a first-time home buyer or not have owned a principal residence during the past three years. Even if they are not first-time buyers, your customers may be able to use a FirstHome Mortgage if they are buying in areas designated as economically distressed.
• Must have an annual household income that falls within the allowed limits, up to $81,500 depending on family size and the county where the home is located.
• Must be purchasing a home with a sales price up to $220,000 for new construction, and up to $210,000 for an existing home.
• Must buy a home in North Carolina and occupy it within 60 days of closing.
• Must be a reasonable credit risk.

Eligible properties

Most types of homes qualify for the FirstHome Mortgage. Eligible properties include:

• New and previously owned detached homes
• Townhouses and Planned Unit Developments (PUDs)
• Condominiums
• New doublewide manufactured homes on permanent foundations, purchased in land-home transactions.

While existing manufactured homes cannot be financed with the FirstHome Mortgage, they may qualify for a Mortgage Credit Certificate (MCC).

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Downpayment assistance up to $7000

Home buyers who need help with downpayment and closing costs may qualify for interest-free, deferred second mortgages up to $7,000. The buyer pays $750 out-of-pocket, and the loan pays up to $7,000 of the balance.

These loans are processed by the lender at the same time as the FirstHome Mortgage.

No payment is due on the principal for 30 years from the date of closing. However, payment becomes due upon selling the home, transferring, refinancing, loan default, or if the home ceases to be the principal residence of the owner.

Home buyers must meet the same eligibility requirements as for the FirstHome Mortgage with the addition of the following:

• Buyer income is up to $75,650 for a family of eight and depending on the county where the home is located. Sales price of the home is up to $210,000.
• The lender does a cash-flow analysis for the buyer.
• Homes built before January 1, 1978, are not eligible.

The North Carolina Housing Finance Agency has been providing this downpayment assistance for several years using federal HOME funds. Currently, some of the funding comes from the American Dream Downpayment Initiative (ADDI), signed into law in December 2003.

Please direct home buyers to the Home Buyer section of this Web site for more information on our downpayment assistance or advise them to call us at 1-800-323-0988 and ask to speak with an underwriter.

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Job loss protection

The Job Loss Feature can help buyers who lose their jobs. To qualify, the homeowner must be eligible for unemployment benefits and must have kept current on mortgage payments up to the time of job loss.

The Job Loss Feature pays principal and interest payments for four months. The homeowner is responsible for the escrow portion of the mortgage payment (taxes and insurance). Funds are sent directly to the loan servicer. These funds are a second mortgage with no interest and no monthly payments. The homeowner repays this loan when they sell, transfer or refinance the home; if the loan goes into default; or if the home ceases to be the principal residence.

Other benefits may apply. Homeowners can contact their servicers for additional information.

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Mortgage Credit Certificates (MCC)

Home buyers who meet the income qualifications and eligibility requirements but do not qualify for the FirstHome Mortgage due to credit problems or high qualifying ratios may be eligible for a Mortgage Credit Certificate (MCC).

An MCC can be used with almost any type of mortgage, including those with adjustable rates. However, it cannot be used with our FirstHome Mortgage.

The participating lender sets the terms of the mortgage. This includes the interest rate, down payment, underwriting criteria, discount points, and closing costs. While the North Carolina Housing Finance Agency issues MCCs to qualified buyers, we do not originate loans. The buyer gets the loan from one of our participating lender.

Eligible properties

Most types of homes qualify for the MCC. Eligible properties include:

• New and previously owned detached homes
• Townhouses and planned unit developments
• Condominiums
• New and existing doublewide manufactured homes on permanent foundations, purchased in land-home transactions.

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