Ohio First-Time Home Buyer: 2022 Programs and Grants

What to know about buying a house in Ohio

If you’re an Ohio first-time home buyer, count yourself lucky. Because the Buckeye State provides some great support. You could be in line for one-on-one counseling, free homebuyer education, and even some generous down payment assistance. Indeed, some buyers are eligible for a grant of up to 5% of their home’s purchase price.

Here’s how to get started.

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Ohio home buyer overview

The average home sales price in Ohio was $257,490 in April 2022, according to Ohio Realtors. That was a 9.3% increase over the same month in 2021.

Rising home prices can make it challenging to save for a down payment and closing costs. So be sure to read on for information about home buyer assistance programs that could help you bridge the gap between your savings and those requirements.

Ohio home buyer stats

Average Home Sale Price in Ohio1 $257,490
Minimum Down Payment in Ohio (3%) $7,720
20% Down Payment in Ohio $51,500
Average Credit Score in Ohio2 715
Maximum Ohio Home Buyer Grant3 5% grant from Communities First Ohio

Down payment amounts are based on the state’s most recently available average home sale price. “Minimum” down payment assumes 3% down on a conventional mortgage with a minimum credit score of 620.

If you’re eligible for a VA loan (backed by the Department of Veterans Affairs) or a USDA loan (backed by the U.S. Department of Agriculture), you may not need any down payment at all.

First-time home buyer loans in Ohio

First-time home buyers with a 20% down payment in the state of Ohio can get a conventional loan with a low interest rate. And you never have to pay for private mortgage insurance (PMI).

Of course, few first-time buyers have saved enough for 20% down. But the good news is, you don’t need that much. Not by a long shot.

Borrowers can often get into a new home with as little as 3% or even 0% down using one of these low-down-payment mortgage programs:

  • Conventional 97: From Freddie Mac or Fannie Mae. 3% down payment and 620 minimum credit score. You can usually stop paying mortgage insurance after a few years
  • FHA loan: Backed by the Federal Housing Administration. 3.5% down and a 580 minimum credit score. But you’re typically on the hook for mortgage insurance until you refinance to a different type of mortgage, move, or pay off your loan
  • VA loan: Only for veterans, active-duty military members, reservists, and National Guard. Zero down payment is required. Minimum credit score varies by lender but often 620. No ongoing mortgage insurance after closing. These are arguably the best mortgages available, so apply if you’re eligible
  • USDA loan: For those on low-to-moderate incomes buying in designated rural areas. Zero down payment required. Credit score requirements vary by lender but often 640. Low mortgage insurance rates
  • OHFA or Communities First Ohio: May include competitive mortgage interest rates and can be used with down payment assistance. More information below

Note that government loan programs (including FHA, VA, and USDA home loans) require you to buy a primary residence. That means you can’t use these loans for a vacation home or investment property.

In addition, most programs let you use gifted money or down payment assistance (DPA) to cover your down payment and closing costs. Depending on the mortgage loan you choose, you could potentially get into your new house with minimal cash out of pocket.

If you’re unsure which program to choose for your first mortgage, your lender can help you find the right match based on your finances and home buying goals.

Ohio first-time home buyer programs

Ohio has a couple of great, statewide first-time buyer programs that could make your home purchase more affordable. These include the My Ohio Home and Communities First mortgage programs.

My Ohio Home

OhioHome.org is part of the state government’s Ohio Housing Finance Agency (OHFA).

My Ohio Home offers programs based on conventional mortgage loans, USDA loans, and VA Loans (for which you need a minimum credit score of 640). It also has FHA loans, for which that minimum is 650.

  • OHFA Homebuyer Program: 30-year, fixed-rate mortgages for moderate- and low-income borrowers
  • Ohio Heroes: Conventional and government-backed loans for eligible public servants including educators, law enforcement, medical professionals, and firefighters. This loan type can be paired with DPA programs
  • Next Home Program: Technically not a first-time home buyer program. Next Home offers 30-year, fixed-rate loans for all buyers that can be paired with select DPA programs
  • Mortgage Tax Credit: This tax credit comes in two varieties, Plus and Basic, which can provide a credit of up to 40% of the home mortgage interest

As is usual with these state programs, you must:

There are also three basic eligibility criteria. You must be one or more of the following:

  • A first-time home buyer (meaning you must not have owned a primary residence in the last three years);
  • A veteran with an honorable discharge; or
  • Planning to buy a home in one of OHFA’s target areas

There are other eligibility requirements too, including income caps and purchase price limits. You can learn more on OHFA’s website.

Communities First

Communities First Ohio is run by the Port of Greater Cincinnati Development Authority and appears to offer mortgages to all Ohio first-time home buyers. You can expect similar rules and eligibility criteria to those for OHFA mortgages. But eligible buyers will also need:

  • A debt-to-income ratio no greater than 45%
  • FICO score of 640 or more
  • Not exceed maximum income limits (varies by county)
  • Use an approved lender
  • Property must be your primary residence

However, Communities First seems to offer more generous down payment assistance (DPA) along with its loan programs — including home buyer grants of up to 5% of the home purchase price.

Ohio first-time home buyer grants

OHFA’s down payment assistance is pretty good compared with many states. It has a number of programs, but the most popular is probably Your Choice! Down Payment Assistance.

Your Choice! DPA

With this DPA program, Ohio first-time home buyers can borrow either 2.5% or 5% of their home’s purchase price. That takes the form of a loan which is forgiven after seven years. That means if you stay in the home at least seven years, you won’t have to pay anything back.

What’s not to like? Well, you have to repay the OHFA loan in full if you move, sell the home, refinance, or transfer your main mortgage before the seven-year loan term ends.

Grants for Grads

The OHFA Grants for Grads program provides discounted mortgage interest rates to recent graduates. It also offers 2.5% or 5% down payment and closing cost assistance, which is forgiven after five years provided you do not refinance, move, or sell.

Eligible home buyers must have graduated within the past 48 months with an associate’s, bachelor’s, master’s, doctorate, or another post-graduate degree from an accredited college or university. You’ll also need to complete a free home buyer education course from a HUD-approved counseling agency.

Communities First DPA

With Communities First, you can apply for a grant of 3%, 4%, or 5% of your next home’s purchase price. And because it’s a grant, you never have to repay the funds.

You may also qualify for one of these grants more easily than an OHFA loan. Because only the borrower’s income is counted, not the whole household’s. You can find more details in the program brochure.

Buying a home in Ohio’s major cities

Ohio is one of those states where it is, on average, less expensive to buy a home in a big city than statewide. And if you wish to buy in Cleveland, you’re doubly lucky. Because home prices are roughly half those in Columbus and Cincinnati. And Cleveland home prices are declining.

Columbus first-time home buyers

The median home price in Columbus was $240,000 in April 2022, according to Realtor.com. That was up 10.5% year over year.

If you want to buy a home at that median price, your down payment options might fall between:

  • $7,200 for 3% down payment
  • $48,000 for 20% down payment

The City of Columbus offers a down payment assistance program called the American Dream Down Payment Initiative (ADDI).

The program offers five-year deferred loans. So you don’t have to repay the money you receive, provided you don’t move out of the home, refinance, or pay off your mortgage during that period.

Some eligibility criteria are shown at that link. But details (including how much you can borrow) are scant. You can call (614) 645-7896 for more information.

Cleveland first-time home buyers

The median list price in Cleveland was $115,000 in April 2022, according to Realtor.com. That was actually down 3.4% year over year.

If you want to buy a home at that median price, your down payment options might fall between:

  • $3,450 for 3% down payment
  • $23,000 for 20% down payment

Cleveland’s down payment assistance is administered by Cuyahoga County. It offers a deferred loan of up to a staggering 10% of the purchase price. This can be used for homes with a value up to $149,000. So the loan amount is capped at $14,900. Still, that home price cap is higher than the median list price for the city.

The loan is never forgiven. But it is repayable only when you move, sell the home, refinance, transfer, or pay down your mortgage.

You can download a PDF program guide from the Cuyahoga County website for more details, including income limits and other eligibility criteria.

Cincinnati first-time home buyers

The median list price in Cincinnati was $229,900 in April 2022, according to Realtor.com. That was up 5% year over year.

If you want to buy a home at that median price, your down payment options might fall between:

  • $6,900 for 3% down payment
  • $45,980 for 20% down payment

The City of Cincinnati operates an American Dream Downpayment Initiative program for first-time homebuyers with modest incomes. And you can borrow up to $5,000 as an interest-free deferred loan that is forgiven after five years.

However, the city’s website says, “All or a portion of the funds will be recaptured in the event a homeowner moves from the residence, sells or transfers ownership during the five-year residency period.”

Download the program’s guide (PDF) for all the details.

Where to find home buying help in Ohio

All the organizations we’ve listed above should provide advice freely to any first-time home buyer in Ohio or their local area.

In addition to our selection, the U.S. Department of Housing and Urban Development (HUD) provides lists for statewide, regional, and local resources:

Statewide and regional first-time home buyer programs in Ohio

You can also find programs by county, city, and town on HUD’s Ohio first-time home buyer webpage.

What are today’s mortgage rates in Ohio?

You can see today’s live mortgage rates in Ohio here.

When you’re ready to start the home buying process, make sure you get personalized rate quotes from at least three mortgage lenders.

Don’t just look at advertised rates online; actually apply for preapproval and compare the interest rates and fees you’re offered. That’s the only way to know you’re getting the best deal possible on your new home loan.

1Source: Ohio REALTORS Report
2Source: Experian.com study of 2021 and 2020 data
3Based on a review of the state’s available DPA grants at the time this was written

The information contained on The Mortgage Reports website is for informational purposes only and is not an advertisement for products offered by Full Beaker. The views and opinions expressed herein are those of the author and do not reflect the policy or position of Full Beaker, its officers, parent, or affiliates.

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