Alabama households with modest incomes are set to benefit from new below-market mortgage interest rates through the Alabama Housing Finance Authority's (AHFA) First Step Mortgage Revenue Bond program according to a news release.
Beginning April 15, eligible homebuyers, earning below the median income for their respective area, are able to apply for two special 30-year fixed mortgage interest rates. These rates include 5.5% on FHA, VA or USDA loans, or 6% on Freddie Mac HFA Advantage conventional loans. Exclusive to Alabama residents and available solely through AHFA, applications are processed on a first-come, first-served basis via a statewide network of participating lenders. Both rates offer up to $10,000 in down payment assistance.
Funded by the sale of tax-exempt Mortgage Revenue Bonds, the First Step program, previously popular, is being reintroduced due to favorable market conditions, as stated by AHFA Executive Director Robert Strickland.
"The 50,000 Alabama homebuyers who took advantage of this program from 1980 to 2010 know what a difference it makes," Strickland said. "These lower-than-market interest rates result in real savings over the life of a loan. Combined with AHFA's down payment assistance, we can stretch borrowers' savings and reach the next generation of potential homebuyers."
Income and sales price limits for participation are determined by the U.S. Department of Housing and Urban Development, varying based on family size and the property's location. In select areas of the state, qualifying households can earn up to $119,400 annually and purchase homes with sales prices up to $588,104 in "target" areas and $481,176 in "non-target" areas. These designations are established by the federal government to promote economic development.
Detailed program information, including income and sales price limits, is available on AHFA's website at www.ahfa.com/homebuyers/programs-available/first-step-mortgage-revenue-bonds.