2025 North Carolina First-Time Homebuyer Programs and Loans
If you’re looking to buy your first home in North Carolina, there are some programs that may help you save money, including down payment assistance and tax credits.
Here’s what you need to know about first-time homebuyer loans and grants in the Tar Heel State and what it takes to qualify for them.
First-time homebuyer programs in North Carolina
North Carolina offers several programs to help first-time homebuyers achieve their dreams of homeownership through the North Carolina Housing Finance Agency (NCHFA). These programs include upfront cash to help cover a down payment or your home’s purchase price and a tax credit to help you save on mortgage interest each year.
- NC Home Advantage Mortgage: Good option for first-time and move-up homebuyers.
- NC 1st Home Advantage Down Payment: Good option for first-time homebuyers and military veterans.
- NC Home Advantage Tax Credit: Good option for first-time homebuyers, military veterans and those buying in a targeted census tract.
- Community Partners Loan Pool: Good option for low- and moderate-income homebuyers.
- Self-Help Loan Pool: Good option for those purchasing a home built or rehabilitated by Habitat for Humanity.
NC Home Advantage Mortgage
The NC Home Advantage Mortgage provides mortgages and down payment assistance to first-time homebuyers and homebuyers looking to move to a more expensive house. You can get down payment assistance for up to 3% of the loan amount with repayment only required if you sell, refinance or transfer your home in less than 15 years. As long as you stay in your home until year 15, your down payment assistance will be completely forgiven.
Requirements
- Annual income of $140,000 or less
- Credit score of 640 or higher (or 660 or higher for new manufactured homes)
- The home will be your primary residence
- You will move in within 60 days of closing
- You are purchasing a home in North Carolina
- You must be a legal resident of the U.S.
Pros and cons
| Loan forgiven if you live in the house for 15 years High income limits Can be combined with other programs (see below) | Must repay down payment assistance if you move, refinance or transfer within 15 years New manufactured homes require a higher credit score For primary residence only |
NC 1st Home Advantage Down Payment
Another homebuyer program in North Carolina is the NC 1st Home Advantage Down Payment. It provides down payment assistance to first-time homebuyers and military veterans. The program provides up to $15,000 in down payment assistance through a 0% deferred second mortgage. Like the NC Home Advantage Mortgage, this assistance is forgiven at the end of year 15 if you still own the home.
Requirements
- Meet county income and sales price limits (available here)
- Credit score of 640 or higher (660 or higher for new manufactured homes)
- The home must be your principal residence
- Must move into the home within 60 days of purchase
- Must not have owned a home in the past three years or must be a military veteran
- Must be a legal resident of the U.S.
- The home you’re purchasing must be located in North Carolina
Pros and cons
| Up to $15,000 in down payment assistance Assistance fully forgiven if you live in the home for 15 years Available to anyone who has not owned a home in the past three years | Must meet county income and sales price limits Requires a credit score of 640 or higher Must live in the home within 60 days of purchase |
NC Home Advantage Tax Credit
The NC Home Advantage Tax Credit helps first-time homebuyers and veterans save up to $2,000 per year in federal taxes if approved for a mortgage credit certificate (MCC) by the NCHFA. You receive this credit by claiming a tax credit for 30% of the interest you pay on your home if it’s an existing home or 50% of the interest for a new home, up to the $2,000 limit. You can still claim a mortgage interest deduction for the remaining interest you pay.
As a first-time homebuyer, you may even be able to combine this tax credit with the NC Home Advantage Mortgage for even more assistance.
Requirements
- Meet county income and sales price limits (available here)
- Be approved for an MCC before purchasing your home
- Have your loan reviewed by the NC Housing Finance Agency before closing
- Buy in a targeted census tract if not a first-time buyer or veteran
- Be a legal resident of the U.S.
Pros and cons
| Can still deduct mortgage interest on federal taxes Higher deduction for new homes Can be combined with the NC Home Advantage Mortgage | Must be purchasing in a targeted census tract if not a first-time buyer or veteran Must be approved for an MCC before purchase May have lower income limits depending on where you purchase |
Community Partners Loan Pool (CPLP)
While not strictly a first-time homebuyer’s benefit, the CPLP offers assistance to all low- and moderate-income homebuyers in North Carolina. If your income is below 80% of the median income in your county, you may be eligible to receive up to 25% of your home’s sales price or $50,000 — whichever is less. This comes as a 0% subordinate loan but must be combined with the NC Home Advantage Mortgage or a USDA Section 502 Direct loan. Unlike the NC Home Advantage Mortgage, the CPLP loan is not forgiven, although you don’t need to repay it for up to 30 years as long as you remain in the home during that time.
Requirements
- Income below 80% of your county’s median income
- Credit score of 640 or higher, although exceptions may be available
- Sales price below county limits, available here
- Have an NC Home Advantage Mortgage or USDA Section 502 Direct loan
- Complete homebuyer education course and two hours of in-person housing counseling
- Proof of stable income to afford and maintain the home
- Debt-to-income ratio of no higher than 45%
Pros and cons
| Up to $50,000 in assistance No payments due for 30 years Zero-interest loan | Must repay the loan if you refinance, move or pay off the mortgage Must have an NC Home Advantage Mortgage or a USDA Section 502 Direct mortgage Only available to CPLP members |
Self-Help Loan Pool (SHLP)
SHLP provides 0% shared-mortgage financing to eligible low- and moderate-income buyers who are purchasing a Habitat for Humanity home. As with CPLP, you can receive up to $50,000 for up to 30 years if you purchase a home outside of a U.S. Department of Housing and Urban Development (HUD) Community Development Block Grant (CDBG) entitlement city or up to $35,000 if you’re purchasing within a CDBG entitlement city. You must help with the home’s construction or rehabilitation and meet certain underwriting requirements to qualify. SHLP also requires buyers to complete home buyer education and counseling with an HUD-approved housing counselor.
Requirements
- Income at or below 80% of your county’s median income
- Complete homebuyer education as well as two hours of one-on-one pre-purchase counseling provided by a HUD-approved housing counselor
- Must occupy the home as your primary residence for five to 15 years, depending on the amount of funding
- Must be purchasing a new or rehabilitated home from a SHLP member that’s less than the maximum sales price limit for the county
- Commit at least 15% of your pretax monthly income toward housing expenses
Pros and cons
| High loan amount Zero interest, 30-year loan Lower occupancy requirements for lower funding amounts | Must purchase a Habitat home Must meet income and sales limits Must spend at least 15% of your gross monthly income on housing |
North Carolina first-time homebuyer qualifications
The qualifications for first-time homebuyer programs in North Carolina vary, but most require at least a 640 credit score, which is well below the state average of 709 in 2024, according to Experian. You may also need to meet certain income and sales price limits. Depending on the program you choose, here are the steps to apply:
Steps to apply for a first-time homebuyer program
Step 1: Choose the right program
North Carolina offers several homebuyer programs, some of which can be combined for maximal savings. The first step is to determine the right program for you. Review the requirements, including necessary credit score and income limits, before choosing a program to make sure you qualify, then read through the terms carefully to ensure it’s a good match.
Step 2: Ask for help
If you have any questions about the programs or application process, don’t hesitate to reach out to an HUD-approved housing counselor. These government-trained experts can offer independent guidance at any step of the process, from choosing a program to the application process and what to expect next.
Step 3: Find an approved lender
Not all banks or lenders offer these homebuyer programs. The NCHFA maintains a list of participating lenders. If you’re applying for the CPLP, you’ll need to work with a community partner lender. It’s best to speak with multiple lenders to determine the best one for your needs.
Step 4: Apply through your lender
After you choose a lender, you’ll need to apply for the program just as you would any other mortgage. This will include providing documentation to verify you meet the various requirements, such as W-2 or tax forms to verify your income. It’s essential to get preapproved for a mortgage even before you start house shopping to show sellers you’re a serious buyer.
Understanding North Carolina first-time homebuyer down payment assistance (DPA)
One of the typical challenges facing first-time homebuyers is coming up with a down payment. In North Carolina, there are several types of assistance that can help. Out of the 48 DPA programs in North Carolina, about 90% of them had available funding as of the fourth quarter of 2024, according to Down Payment Resource’s homeownership program index.
Here are the most common types of assistance you can expect from a homebuyer program.
Deferred second mortgage
Requires repayment? Yes, when the home is sold or refinanced.
A deferred second mortgage is an additional lien on your home. It provides funds up front to help cover closing costs and/or the down payment. It’s repaid when the home is sold or refinanced.
Forgivable second mortgage
Requires repayment? No, if the buyer lives in the home for the required period of time.
A forgivable second mortgage is also a second lien on your home. However, in this case, the funds won’t have to be repaid as long as the buyer lives in the home for the required period of time.
Grant
Requires repayment? Some types of grants require repayment if the home is sold within a certain period of time.
Grants are given to homebuyers to pay their down payment and closing costs and generally won’t require repayment. However, depending on the type of grant, repayment could be required if the home is sold within a certain period.
Mortgage credit certificate
Requires repayment? No, if you live in your home for a required period of time.
Some first-time homebuyers can earn a tax credit of up to $2,000 of the mortgage interest they pay. To be eligible, you must meet the mortgage credit certificate requirements, which include income and purchase price limits.
Keep these things in mind about DPA programs
When considering DPA programs, make sure that you fully understand the terms. While some programs offer loan forgiveness, that may only apply if you own the home for a certain amount of time. If you move, refinance or sell the home before the loan is up, you may have to pay it back.
How much of a down payment do I need to buy a house in North Carolina?
The amount you’ll need for a down payment in North Carolina will vary depending on a number of factors, including the type of loan you secure and the size of your mortgage. However, a recent LendingTree study found that first-time homebuyers in North Carolina made an average $37,412 down payment in 2024.
Can I qualify for down payment assistance in North Carolina?
To qualify for DPA in North Carolina, you must meet these requirements:
- Minimum credit score and income limit
- Completion of homeowner education courses, if required
- Purchase a home in an eligible area
- Use the home as your primary residence
- Qualify with a participating lender
How do I apply for North Carolina first-time homebuyer down payment assistance?
The first step to apply for first-time homebuyer DPA is finding a participating lender. The lender can then walk you through the application process. Alternatively, you can get guidance from an HUD-approved housing counselor, who can discuss the steps for various programs.
Other first-time homebuyer loan programs
Conventional loans
Conventional loans aren’t backed by the government. They typically come with more stringent requirements compared to other loan types. However, for those who qualify, conventional loans are typically the most cost-effective home loans.
FHA loans
FHA loans are backed by the Federal Housing Administration. They are generally easier to qualify for than conventional loans but also come with some extra costs, such as two forms of mortgage insurance. FHA mortgage rates are typically lower than conventional loan rates.
VA loans
VA loans are guaranteed by the U.S. Department of Veterans Affairs. They’re available to active-duty service members, veterans and surviving spouses. They typically offer lower interest rates and closing costs and don’t require a down payment.
USDA loans
Backed by the U.S. Department of Agriculture, USDA loans are available to low- and moderate-income borrowers to build or purchase a single-family home in eligible rural areas. Similar to VA loans, USDA loans don’t require a down payment.
What are the best first-time homebuyer loans?
Which loans are best for first-time homebuyers? The answer to that question depends on your personal circumstances. Factors to weigh include your income, your credit score and the amount of money you have for a down payment. In some cases, your profession and where you intend to purchase a home may be factors, as well.
| Loan program | Best for first-time homebuyers who: |
|---|---|
| Conventional | Have moderate to high incomes and solid credit scores. |
| FHA | Have poor to fair credit and want a down payment of 10% or less. |
| VA | Are members of the military and veterans and may not have money for a down payment or have low credit scores. |
| USDA | Have low or moderate income and want to purchase a home in a rural area. |
Home price trends in North Carolina’s major areas
Like most of the country, North Carolina has seen an increase in housing prices in recent years, though it hasn’t been as steep as in some states. In 2024, housing prices in North Carolina rose by 3.3% — nationally, housing prices saw an average increase of 4.3%. Over a five-year period, however, housing prices in North Carolina have risen by 72.31% — a rate surpassed by only seven other states (New Hampshire, Montana, Maine, Idaho, Tennessee, Vermont and Florida).
Home prices in the Charlotte-Concord-Gastonia metro area — the state’s most recognized banking and finance hub — rose by 4.07% year over year. The Greensboro-High Point metro saw an even higher increase at 6.92%. In other areas, however, home prices rose by less. In the Raleigh-Cary metro — home to the state capital — for example, home prices rose by 3.78%.
Is there a first-time homebuyer tax credit in North Carolina?
There’s no longer a federal first-time homebuyer tax credit, but North Carolina offers a homebuyer tax credit called the NC Home Advantage Tax Credit. This allows residents to receive a credit for 30% of the interest paid on an existing home or 50% of the interest for a new home, up to the $2,000 each year.
What are the current mortgage rate trends in North Carolina?
Nationally, mortgage rates are expected to remain higher in 2025 than they were at the height of the pandemic. That said, over the past year, the 30-year fixed market rate is down 0.25%, and the 15-year fixed market rate is down 0.43%. Rates are expected to remain steady at 6% to 7% throughout the year, according to the current mortgage rate forecast from LendingTree. Fannie Mae’s Economic and Strategic Research Group projects mortgage rates will end around 6.5% in 2025 and 6.3% in 2026.