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Income Limits
First-Time Home Buyer
Down Payment Assistance
MCC

Our Programs

FirstHome Mortgage
Mortgage Credit Certificates (MCC)
Downpayment assistance
Job loss protection

FirstHome Mortgage

Partnering with participating lenders, we offer 30-year, fixed-rate conventional, FHA, VA, and USDA mortgages at below-market interest rates. These loans are financed through the sale of Mortgage Revenue Bonds and are sometimes referred to by lenders as MRB loans.

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

Lender eligibility

In order to offer the FirstHome Mortgage to buyers, lenders need to satisfy eligibility criteria:

• Are approved as an FHA mortgage originator (if originating FHA loans); approved as a VA mortgage originator (if originating VA loans); approved as a USDA mortgage originator (if originating USDA loans); or approved as a Fannie Mae or Freddie Mac seller/servicer in good standing (if originating conventional loans).
• Have an office in North Carolina that has originated mortgages for at least one year.
• Originate, process, underwrite, close, and fund the loan.
• Be in compliance with federal banking laws concerning minimum capital requirements.
• Have not violated federal banking regulations and thus not be undergoing enforcement proceedings of federal regulators.
• Have a net company asset worth of at least $250,000.
• Execute a Master Mortgage Loan Origination and Sale Agreement with the North Carolina Housing Finance Agency.
• Complete a lender training program with Agency staff.

For more information, see How to Become a Participating Lender.

Home buyer eligibility

To qualify, a home buyer:

• Must be a first-time home buyer or have not owned a principal residence during the past three years. Even if they are not first-time buyers, your customers may be able to use our mortgages if they are buying in areas designated as economically distressed.
• Must have an annual household income that does not exceed the allowed limits.
• Must purchase a home with a sales price that does not exceed maximum allowed limits: up to $200,000 for new construction and up to $190,000 for existing homes.
• 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

Program guide

Our online Homeownership Mortgage Program Guide is a comprehensive and helpful resource on all aspects of the FirstHome Mortgage. For your convenience, we’ve provided links to the guide’s sections below.

You can also order a hard copy of this guide by using the "Order Supplies" link at the bottom of the column to the left.

Introduction
Definitions
Eligibility Guidelines
Participating Lenders
Mortgage Processing Steps
Program Compliance
Appendix A Forms
Appendix B Recapture Provisions and Disclosures
Appendix C Targeted Areas

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Mortgage Credit Certificate (MCC)

Home buyers who meet the income 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 adjustable rate mortgages. However, it cannot be used with the Agency’s FirstHome Mortgage.

While our Agency issues MCCs to qualified buyers, we do not originate loans. The buyer must obtain the loan through a participating lender. As the lender, you set the terms of the mortgage. This includes the interest rate, down payment, underwriting criteria, discount points, and closing costs. You also process the buyer’s application for the MCC.

Lender eligibility

A lender needs to satisfy certain eligibility requirements in order to offer mortgages that qualify for an MCC:

• Meet one of these three requirements:
  Be an approved seller to Fannie Mae or Freddie Mac and have been continuously in business as an originator of residential mortgages in North Carolina for the previous year
  or
  Be an approved FHA mortgagee and have been continuously in business as an originator of residential mortgages in North Carolina for the previous two years
  or
  Have continuously been in business in North Carolina as an originator of residential mortgages for the previous five or more years.
  
• Meet all the following requirements:
  Originate, process, underwrite, close, and fund the loan.
  
  Be in compliance with minimum capital requirements imposed by federal banking laws and regulations.
  
  Have not violated federal banking regulations and thus not be undergoing enforcement proceedings of federal regulators.
  
  Have a net company asset worth of at least $250,000.
  
  Execute a Lender Participation Agreement.
  
  Complete a lender training session with staff of the North Carolina Housing Finance Agency.

To apply to become a participating lender, contact Cle Newsom at cnewsom@nchfa.com or (919) 877-5674 for an application package.

Eligible properties

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

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

Our online MCC Guide is a comprehensive resource to help you with the program. For your convenience, we have included links to its contents here.

You can also order a hard copy of this guide by using the "Order Supplies" link at the bottom of the column to the left.

Introduction
Definitions
Eligibility Requirements
Participating Lenders
MCC Processing Steps
Program Compliance
Underwriting Values
IRS Tax Information
Refinancing Requirements
Appendix A Forms for Mortgage Credit Certificate Program
Appendix B Recapture Provisions and Disclosures
Appendix C Targeted Areas

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Downpayment assistance

Home buyers who need help with a down payment and closing costs may qualify for interest-free, deferred second mortgages up to $7,000 from the North Carolina Housing Finance Agency in conjunction with the Agency’s FirstHome Mortgage. The buyer pays $750 out-of-pocket and the loan pays up to $7,000 of the balance.

No payment is due on the principal for 30 years from the date of closing. However, payment becomes due upon selling the home; refinancing the first mortgage; 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 limits and sales price limits are lower than for the FirstHome Mortgage.
• 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 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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