2024 Georgia First-Time Homebuyer Programs and Loans

Georgia first-time homebuyer programs address some common barriers to homeownership by providing low-cost mortgages and down payment assistance. Prospective buyers can access programs available at the state, county and city levels, each with specific eligibility guidelines.

Learn more about the first-time homebuyer programs in Georgia, their qualification requirements and the steps to apply.

First-time homebuyer programs in Georgia

The Georgia Department of Community Affairs (DCA) offers multiple first-time homebuyer programs through its Georgia Dream Homeownership Program, including low-interest-rate loans and down payment assistance.

In addition to statewide initiatives, Georgia has many countywide and local first-time homebuyer programs.

• Georgia Dream Loan Program
• Georgia Dream Down Payment Loan
• Fulton Homeownership Program (HOP)
• Homestretch Down Payment Assistance Program
• Atlanta Housing Homeownership Program
• Additional Georgia first-time homebuyer programs

Georgia Dream Loan Program

As part of its Georgia Dream Homeownership Program, the Georgia Department of Community Affairs (DCA) offers low-interest mortgages to eligible first-time homebuyers and other qualified borrowers. Mortgage options include 30-year fixed-rate conventional, FHA, USDA and VA loans available through participating lenders.

Requirements

• Be a first-time homebuyer (includes borrowers who haven’t owned property in the past three years) or purchase a home in a targeted area
• Household income must be within program limits, ranging from $90,600 to $123,966, depending on county and family size
• Purchase price must be within program limits, ranging from $335,000 to $400,000, depending on county
• Liquid assets must be at or below $20,000 or 20% of the purchase price (whichever amount is higher)
• Credit score of 640 or higher
• Meet additional lender credit requirements
• Attend homebuyer education

Pros and cons

Georgia Dream Down Payment Loan

Under the Georgia Dream Homeownership Program, the DCA also provides down payment assistance. Borrowers financing a home through the Georgia Dream Loan Program can receive 5% of the purchase price (up to $10,000) to put towards their down payment and closing costs. Homebuyers who work in certain public-facing professions or have a family member with a disability can receive 6% of the purchase price (up to $12,500).

The down payment assistance is a 0% interest deferred second mortgage with no monthly payments. Borrowers repay the loan when they sell, refinance or no longer live in the home as their primary residence.

The Georgia Dream Down Payment Assistance program has three options:

• Standard: 5% of the purchase price, up to $10,000 (whichever amount is lower); available to all eligible buyers
• Protectors, Educators and Nurses (PEN): 6% of the purchase price, up to $12,500 (whichever amount is lower) — available to public protectors, educators, healthcare providers and active-duty military
• CHOICE: 6% of the purchase price, up to $12,500 (whichever amount is lower) — available to buyers with a family member living with a disability

Requirements

• Be a first-time homebuyer (includes borrowers who haven’t owned property in the past three years) or purchase a home in a targeted area
• Apply for a first mortgage through the Georgia Dream Loan Program
• Credit score of 640 or higher
• Meet income and purchase price guidelines
• Contribute a minimum of $1,000
• Attend homebuyer education

Pros and cons

Fulton Homeownership Program (HOP)

The Fulton County Homeownership Program offers first-time homebuyers assistance with their down payment and closing costs. Eligible homebuyers can receive 6% of their purchase price (up to $10,000) in a 0% interest, deferred payment loan forgivable after six years.

Requirements

• Be a first-time homebuyer (includes borrowers who haven’t owned property in the past three years)
• Apply for a first mortgage through a participating lender
• Household income must be within program limits (ranging from $54,000 to $101,800, depending on family size)
• Purchase a home in Fulton County
• Purchase price must be within program limits (currently $272,000)

Pros and cons

Homestretch Down Payment Assistance Program

Georgia buyers purchasing a home in Gwinnett County can receive up to $10,000 towards their down payment through the Homestretch Down Payment Assistance Program. The aid comes as a 0% interest deferred payment loan that can be forgiven after five years.

Requirements

• Be a first-time homebuyer (includes borrowers who haven’t owned property in the past three years)
• Household income must be within 80% of the area median income (ranging from $60,200 to $113,550, depending on family size)
• Purchase price must be within program limits ($323,000 for an existing home or $346,000 for new construction)
• Minimum credit score of 580
• Debt-to-income ratio of 43% or below
• Purchase a home in Gwinnett County
• Complete a Pre-Purchase Mortgage Counseling Class

Pros and cons

Atlanta Housing Homeownership Program

The Atlanta Housing Homeownership Program offers down payment assistance to first-time homebuyers purchasing a home within Atlanta city limits. The program provides up to $20,000 ($25,000 for borrowers working in certain public-facing professions) as a 0% interest second mortgage forgiven after 10 years. Borrowers can use the funds to supplement their down payment, cover closing costs or buy discount points.

Requirements

• Be a first-time homebuyer (includes borrowers who haven’t owned property in the past three years)
• Household income must be within 80% of the area median income (ranging from $60,200 to $113,550, depending on family size)
• Purchase price must be within program limits (currently $375,000)
• Liquid assets must be below $25,000
• Apply for a 15- or 30-year fixed-rate first mortgage with a participating lender
• Credit score of 620 or higher
• Be a Georgia resident for at least six months
• Contribute a minimum of $1,500
• Attend homebuyer education

Pros and cons

Additional Georgia first-time homebuyer programs

Georgia first-time homebuyer qualifications

To qualify for the statewide first-time homebuyer programs in Georgia, you’ll need to meet the following typical requirements:

→ Be a first-time homebuyer or someone who hasn’t owned a home in the past three years, or purchase a home in a targeted area
→ Have a credit score of 640 or above. While this credit score requirement is higher than some loan programs, it’s lower than the Georgia average credit score — 695 — according to Experian.
→ Meet income guidelines, depending on county and family size
→ Meet purchase price guidelines, depending on county
→ Contribute $1,000 (if applying for down payment assistance)
→ Have liquid assets at or below $20,000

Steps to apply for a first-time homebuyer program

1. Check your eligibility.Ensure you meet the first-time homebuyer requirement, which includes not having owned a home in the past three years. The first-time homebuyer requirement is waived if you purchase a home in a targeted area.

In addition, you must be within the income and purchase price guidelines. Remember that some lenders may have additional loan or credit qualifications you will need to meet.

2. Find a participating lender.You’ll need to get your first mortgage with a participating lender. Consider comparing multiple lenders to ensure you find the best loan program and terms for your situation. Your lender will tell you what documents you’ll need to get a mortgage preapproval.

3. Take a homebuyer education course.After prequalifying for a loan, the next step is to attend a homebuyer education class or counseling with a HUD-approved housing counseling agency or online through DCA.

4. Search for your home.Once you know the loan amount you’ve prequalified for, you can begin your home search and submit offers.

5. Finalize and close on your loan.After finding your home, you’ll submit your accepted offer to your lender, and the loan will enter the underwriting phase. If you’re applying for down payment assistance, you may need to meet additional requirements.

Once the underwriting process is complete, your loan is ready to close. Georgia Dream loans typically close 60 days from the application date.

Understanding Georgia first-time homebuyer down payment assistance

Applying to one of Georgia’s down payment assistance programs can help close the gap you may have in funding your down payment and closing costs. However, down payment assistance comes in many forms, so it’s crucial to understand how each program works.

Deferred second mortgage

A deferred mortgage is a second lien on your home in addition to your primary loan. Sometimes called a “soft” or “silent” second mortgage, a deferred loan usually has 0% interest and no monthly payments. But it’s not free money — you will in fact need to repay the loan when you sell the home, refinance it or no longer live in it as your primary residence. The Georgia Dream Down Payment Loan is a deferred second mortgage.

Forgivable second mortgage

A forgivable second mortgage is another kind of additional lien on your home. Some programs also call this a deferred mortgage, as it has 0% interest and no payments. However, the loan is canceled or forgiven after you’ve lived in the home for a specified time.

If you sell your home, refinance or move before the specified time, you’ll need to repay the unforgiven portion of the loan. Fulton County’s Homeownership Program and the Atlanta Housing Homeownership Program are examples of forgivable second mortgages.

Grant

Down payment assistance grants don’t need to be repaid. However, you may need to meet specific stipulations to receive the grant, such as getting a primary loan through a participating lender. The My Home DPA Program in Cobb County and the WE DeKalb program are examples of homebuyer grants.

Mortgage credit certificate

Some states issue a mortgage credit certificate, allowing first-time homebuyers to claim a tax credit based on the mortgage interest they pay yearly. However, Georgia doesn’t offer a mortgage credit certificate.

Keep these things in mind about DPA programs

Each down payment assistance program has specific requirements, so you’ll want to ensure that you understand the terms of any program you apply to. For instance, the Georgia Dream Down Payment Loan has no monthly payments, but you’ll need to repay the loan if you sell or refinance your home. Similarly, the Homestretch Down Payment Assistance Program is a no-payment loan; however, it’s forgiven if you stay in the property for five years.

How much of a down payment do I need to buy a house in Georgia?

Down payment requirements depend on the mortgage type you’re getting. Georgia residents can purchase a home with no money down with a VA or USDA loan, while conventional and FHA loans require a 3% or 3.5% down payment, respectively.

Notably, our study of mortgage offers in 2023 showed that the average down payment among Georgia first-time homebuyers was $31,329, representing about 10.6% of their average loan amount.

Can I qualify for down payment assistance in Georgia?

Most down payment assistance programs in Georgia have income and purchase price limitations, which vary by location. Additionally, for most programs, you’ll need to be a first-time homebuyer, which includes anyone who hasn’t owned property in the past three years.

How do I apply for Georgia first-time homebuyer down payment assistance?

The first step to applying to one of Georgia’s first-time homebuyer down payment assistance programs is to contact a participating lender to secure your first mortgage. Your lender will then walk you through the next steps, which may include attending a homebuyer education course.

  Here’s what you need to know about the process of applying for a home loan.

Other first-time homebuyer loan programs

Conventional loans

Conventional loans are mortgages that aren’t part of any government program. However, with a minimum credit score of 620, they can have some stricter requirements than other loan types.

Conventional mortgage interest rates may be higher than government loan rates, but conventional loans carry fewer fees and are often less expensive. Conventional mortgages allow down payments as low as 3% for first-time buyers, but you can make a 20% down payment to avoid private mortgage insurance.

FHA loans

FHA loans are mortgages backed by the Federal Housing Administration. They are popular with first-time homebuyers because of their flexible qualification requirements and low minimum down payment. Borrowers can finance a home with a credit score of 580 or higher and a 3.5% down payment. Buyers with scores between 500 and 579 can qualify with a 10% down payment.

FHA loan interest rates are typically lower than conventional mortgages. However, borrowers pay mortgage insurance for the life of the loan, which can increase the total loan cost. Further, FHA mortgages are also subject to loan limits.

 Learn more about current FHA loan limits in Georgia.

VA loans

Activity-duty service members, veterans and eligible surviving spouses can qualify for loans backed by the U.S. Department of Veterans Affairs (VA). VA loans have no down payment requirements, and VA interest rates are typically lower than those of other mortgage types. Borrowers don’t pay ongoing mortgage insurance, but they will have to pay an upfront funding fee.

USDA loans

USDA loans are available to low- and moderate-income borrowers purchasing a home in rural areas. Backed by the U.S. Department of Agriculture, USDA loans have no down payment requirement.

What are the best first-time homebuyer loans?

With multiple mortgage options, it can be unclear which loan is best for you. Fortunately, each loan program meets various needs of first-time homebuyers, including low down payment options and forgiving credit requirements.

When deciding which loan is right for your situation, consider your down payment, credit history and the price of the home.

Home price trends in Georgia’s major areas

According to recent data from the Federal Housing Finance Agency (FHFA), home prices across Georgia increased 7.16% year over year.

In the Atlanta area (Georgia’s largest metro and home to the state capital), home prices increased 6.64% year over year from the fourth quarter of 2022 to the fourth quarter of 2023, echoing the national home price increase of 6.49%.

The city of Atlanta, in particular, had a year-over-year home prices increase of 5.74%. Meanwhile, the neighboring city of Athens had a higher jump of 8.46%. And in the southeastern part of the Peach State, the city of Savannah’s home prices rose 13.59%, the second-highest increase nationally.

Is there a first-time homebuyer tax credit in Georgia?

The federal tax credit for first-time homebuyers no longer exists, but new homeowners can take advantage of various tax breaks for buying a house, including deducting mortgage interest if itemizing deductions.

What are the current mortgage rate trends in Georgia?

So far in 2024, the state of Georgia has seen a steady rise in interest rates. Rates on 30-year and 15-year fixed loans and 5/1 ARMs are all sitting higher than earlier in the year. Of these three products, so far the 15-year fixed rate has seen the most dramatic increase. The current mortgage rate forecast from LendingTree predicts that interest rates will remain above 6% throughout 2024.