- First-time Nebraska home buyers can get competitive, fixed-rate mortgages via the Homebuyer Assistance Program (HBA) and other special programs.
- Assistance with down payments is also available to qualified first-time home buyers in Nebraska, and can provide as much as $10,000 towards the cost of a home.
- Low-income buyers can apply through grant programs like the Homeownership Set-Aside (HSP) program.
If it’s your first time buying a home in Nebraska, you might be feeling pretty intimated. After all, a nice house can cost upwards of $200K. Is it really possible to afford a home like that on an average (or below average) income?
Yes! The state of Nebraska has numerous home buyer programs and grants available to help first-time buyers like you. Let’s explore.
Homeownership Assistance In Nebraska: Programs & Education
The first big step is getting educated. Trustworthy sites such as HUD.GOV (U.S. Department of Housing and Urban Development) are incredibly useful when researching financial assistance, including statewide and regional programs that you may qualify for. Homeowner education programs are very helpful for first-time buyers – and even individuals who already own their own homes.
Once you’re ready to start looking for a home, check out the Nebraska Investment Finance Authority (NIFA) site to explore statewide home buyer programs. NIFA specializes in assisting first-time homebuyers with every aspect of the process – from home loan programs and interest rates to realtor and lender info, regional news, and other vital information.
Loan Programs For The First-Time Home Buyer In Nebraska
As we mentioned above, NIFA (Nebraska Investment Finance Authority) offers several different types of loan programs to prospective first-time homebuyers, including 30-year fixed rate loans. In addition, NIFA programs boast no prepayment penalties, so you can opt to make extra payments each month in order to avoid accrued interest over the lifecycle of your loan.
Here are four different loans available through NIFA. Be sure to read the eligibility sections for each one to see if you qualify!
1. Homebuyer Assistance Program (HBA)
This program offers two key solutions for Nebraska homebuyers: A) a fixed-rate 30 year mortgage loan, and B) down payment / closing cost financial assistance equal to 5% of the home’s purchase price (up to $10,000). Note that this second offering is also a loan (not a grant), so you’ll need to pay it back. Fortunately, it comes as a very affordable ten-year loan with a 1% interest rate.
Also note that the interest rate on this mortgage is higher than other NIFA-connected programs that don’t provide assistance with a down payment or closing costs. If you don’t really need the down payment / closing cost assistance, a different program might be better for you financially.
Here are some other considerations to keep in mind with the HBA Program:
- A minimum $1,000 personal investment is required from you. (This can be more in some circumstances.)
- Your household will need to fall under certain income limits.
- The price of your new home must be less than $283,000 for a single unit – or less than $346,000 in a “targeted area.”
- Homebuyer education class will be required
You’ll be able choose from several loan-type options, including one that is conventionally insured, a loan insured by the FHA, a loan guaranteed by USDA Rural Development, and a loan guaranteed by the Veteran’s Affairs (VA). Talk with your lender for more information about the best type of loan for your specific needs and qualifications. To view the current interest rates for the HBA Program, click here.
Military Home Program
This program offers competitive, fixed-rate 30 year mortgage loans to first-time home buyers who are active personnel in any branch of the US military. Veterans can also take advantage of this program, so long as they were discharged under other-than-dishonorable conditions.
The Military home program is not specifically built for buyers who need down payment assistance – but in some cases, these loans may come with low or no down payment requirements.
In order qualify for this program, active service members must be a “first-time homebuyer” under NIFA’s rules. This means they cannot have held an ownership interest in their main residence for the past three years. Veterans and their spouses, however, are exempt from this requirement.
- Your home must coss less than $283,000 for a single unit or $346,000 in a special “targeted area” (more on that shortly)
- You must have a credit score of 640 or higher
- You must fall under certain income limits, which vary from county to county. Talk with your lender for more information.
First Home Program
If you don’t need help covering your down payment or closing costs, the First Home Program may be a viable option. First Home can help you secure a competitive, fixed-rate 30-year mortgage loan for your new home. This program is compatible with several different types of loan, including:
- Conventional-insured loan
- FHA-insured loan
- USDA Rural Development-guaranteed loan
For homebuyers who are able to secure a conventional home loan and are able to make a down payment of 20% or more of the home’s purchase price, mortgage insurance isn’t required. To review interest rates for the First Home Program, click here.
- You cannot have owned a home within the past 3 years
- You must have a credit score of 640 or higher
- You must meet certain income limits which vary by county
- Your new home must cost less than $283,000
First Home Targeted Program
If your new home is located in a “targeted area,” there may be special assistance just for you. Targeted areas are special regions where the government is making an effort to revitalize the economy – in part by subsidizing homeownership. If you’re interested in living in one of these areas, that’s good news!
First Home Targeted is much like the standard First Home program: It helps you secure a competitive, fixed-rate 30 year mortgage. (No down payment or closing cost assistance is included.) But the limitations and restrictions for this program are significantly looser. Your home can have a higher value, your income can be greater, and there’s more flexibility around who’s considered a “first-time home buyer.”
This program is also compatible with several different loan types, including conventional-insured loans, FHA-insured loans, and USDA Rural Development-guaranteed loans. Here are the Nebraska counties currently considered “targeted” for these incentives:
Homeownership Set-Aside Programs: Grant Programs In Nebraska
In addition to the various regional and state loan programs available throughout Nebraska, there are also some grant programs that may be of interest to prospective first-time
homebuyers on the market. For example, the Affordable Housing Program (AHP) available through FHLBank has a unique distinction: it’s the largest program of its kind in the US for privately-funded housing grants.
Furthermore, the Homeownership Set-aside Program (HSP) offers closing cost, down payment, and repair assistance to first-time homebuyers earning at/below 80% of the AMI (Area Median Income) for households purchasing or constructing homes in Nebraska, Oklahoma, Kansas, and
Colorado. Provided to households as a forgivable grant, the HSP provides a five-year retention period and can be incredible helpful to low and moderate-income first-time homebuyers.
Living In Nebraska: How To Find The Right Loan Program
If you’ve still got questions or concerns about finding the best loan programs, good news – there’s a wealth of information available to help you navigate the home-buying process. Whether you’re searching for first-time home buyer programs by state, a down payment assistance program or grant in Nebraska, or just trying to choose the right type of mortgage, there are resources out there for people like you!
Ready to take the next step with your first home? Talk to a participating lender and ask about these programs.
1) “Loan Programs.” Nebraska Investment Finance Authority (NIFA.org), (no published date), https://www.nifa.org/homebuyer/loan-programs. Accessed September 3, 2020.
2) “Nebraska First Time Home Buyer Programs.” FirstHomeBuyers.net, (no published date), https://www.firsthomebuyers.net/states/nebraska-first-time-home-buyer.html. Accessed September 3, 2020.
3) “First-Time Home Buyer Programs by State.” Nerdwallet.com, (no published date), https://www.nerdwallet.com/blog/mortgages/first-time-home-buyer-programs-by-state/. Accessed September 3, 2020.
4) “Ultimate First Time Home Buyer Guide.” FirstHomeBuyers.net, (no published date), https://www.firsthomebuyers.net/states/nebraska-first-time-home-buyer.html. Accessed September 3, 2020.