First-Time Homebuyer
Programs in the Carolinas

Buying a first home is an enormous step. For most people, it’s the biggest purchase they’ll ever make and the foundation for future financial security. But with high housing prices, saving for a down payment, qualifying for a mortgage, and navigating a complex process, it’s easy to feel overwhelmed, especially if you have never done it before.

This is where first-time homebuyer programs come in. In both North Carolina and South Carolina, state agencies and local governments have created special programs to help new buyers achieve homeownership. These programs are not just about giving away money—they are carefully designed, often using federal and state funding, to make homeownership possible for responsible buyers who otherwise could not afford it.

Who Qualifies as a First-Time Homebuyer in the Carolinas?

A “first-time homebuyer” is generally someone who has not owned a primary residence within the last three years. This standard is set by the U.S. Department of Housing and Urban Development (HUD) and adopted by most state and federal programs. Even if you previously owned a home, as long as you have not had ownership in the last three years, you may still qualify.

Key points about qualification:

• Exceptions exist. Some programs, particularly for veterans or for homes in federally designated “targeted areas,” may waive the three-year rule. This means you could still qualify even if you recently owned a home. Always check each program’s specific rules.
• Residency and legal status. You must be a U.S. citizen or have eligible permanent residency status. This requirement comes from federal fair housing and lending laws.
• Income and credit. Most programs establish maximum income and home price limits to target low- and moderate-income families, rather than wealthy buyers. Credit score minimums are common (typically 640 or above), and income is verified using pay stubs, W-2s, or tax returns.
• Homebuyer education. Almost every program requires completion of a HUD-approved homebuyer education course. These courses are typically available online or in person and teach you about budgeting, loans, and the responsibilities that come with owning a home.

These requirements are in place to ensure that assistance goes to those who truly need it and can maintain their homeownership. They also protect both the buyer and the program’s funding from risk.

Understanding the Differences Between NC and SC Programs

While North Carolina and South Carolina are neighbors, their housing support systems differ in structure and emphasis:

North Carolina	South Carolina
Managed by the North Carolina Housing Finance Agency (NCHFA), with extra local programs in cities like Charlotte and Raleigh.	Centralized under the South Carolina State Housing Finance and Development Authority (SC Housing).
Assistance amounts are sometimes higher in local programs, reflecting local home prices.	Relies heavily on “bond loan” programs, which use state-issued bonds to keep mortgage rates low.
Offers a wider variety of programs (including major tax credits, which are ending soon).	Offers the Palmetto Heroes program, dedicated to public service professionals like teachers, nurses, and first responders.
Veterans and buyers in certain areas often receive additional flexibility.	Income caps are often clearer and strictly enforced statewide.

North Carolina offers a wider range of choices and higher local support, while South Carolina focuses on consistency and programs for public servants.

North Carolina First-Time Homebuyer Programs

Here are North Carolina’s top programs: 

NC Home Advantage Mortgage™

The NC Home Advantage Mortgage™ program is the primary support program for first-time homebuyers in North Carolina. It is administered by the NCHFA under state law (see Chapter 122A of the North Carolina General Statutes). The program offers a competitive 30-year fixed-rate mortgage, as well as up to 3% of the loan amount in down payment assistance (DPA).

The down payment assistance is structured as a “silent” second mortgage, with no interest and no monthly payments. If you live in the home for 15 years, the debt is fully forgiven.
If you sell or move before the 15th year, a portion of the assistance must be repaid, but the amount decreases with each year. It is available with FHA, VA, USDA, and conventional loans.

The program is available to both first-time and repeat homebuyers, provided the home is used as a primary residence. To qualify for the program, you must:

• Have a minimum credit score of 640
• Have a maximum annual income of $134,000 (2025 limit; subject to change annually)
• Work with a lender approved by the NCHFA

The combination of a reliable mortgage and substantial down payment assistance makes homeownership attainable for thousands of families who might otherwise struggle to save enough for a down payment. The possibility of full debt forgiveness after 15 years helps protect against a long-term financial burden.

NC 1st Home Advantage Down Payment

This is the most generous down payment assistance program in North Carolina, intended exclusively for first-time homebuyers (with no homeownership in the past three years) and eligible veterans. It offers a fixed amount of $15,000 for the down payment and closing costs, structured as a deferred second mortgage.

The $15,000 is provided as a “soft” second mortgage, meaning no interest and no monthly payments are required. Forgiveness begins after 10 years of occupancy, with full forgiveness after 15 years. If you sell or refinance the home earlier, partial repayment may be required. The program must be used in combination with the NC Home Advantage Mortgage™.

Eligible participants include first-time homebuyers and qualified veterans (including active-duty service members, National Guard members, and certain surviving spouses). Applicants must meet the same income, credit score, and primary residence requirements as the main program.

Given today’s home prices, a $15,000 grant can cover the entire down payment for many properties and also pay for closing costs. This removes one of the main obstacles for new buyers.

HouseCharlotte (City of Charlotte)

HouseCharlotte is a local initiative managed by the City of Charlotte and funded through local and federal housing grants, including HUD’s HOME Investment Partnerships Program. The program provides between $30,000 and $80,000 in down payment assistance in the form of a 0% interest, forgivable loan.

The amount of assistance depends on your income, household size, and the availability of matching grants from other programs. The loan is fully forgiven after 30 years, provided you remain in the home for the entire period. It is available only for properties located within the city limits of Charlotte.

Eligible participants include individuals with incomes up to 110% of the Area Median Income (AMI). For example, in 2025, the average monthly income (AMI) for a household of four is approximately $104,000. Applicants must also complete a HUD-approved homebuyer education course. Additionally, both the property and the applicant must meet other requirements established by the city.

Due to rapidly rising home prices in Charlotte, it is becoming increasingly difficult for residents to buy homes. This program helps bridge the affordability gap for many families and supports long-term residency within the community.

Raleigh Homebuyer Assistance

This city program provides up to $45,000 in down payment assistance citywide and up to $60,000 in designated “target neighborhoods” defined by the city’s housing policy. As of mid-2025, the program is open with no waitlist and serves approximately 75 families per year.

The funds are offered as a 0% interest, deferred loan—no payments are required until the home is sold or refinanced. The program aims to increase homeownership and stabilize neighborhoods.

To be eligible, you must be a first-time homebuyer with a credit score of 640 or higher. There are also income limits: no more than 80% of the AMI. The home must be located within the city limits of Raleigh. Completion of a HUD-approved homebuyer education course is mandatory.

With assistance of up to $60,000, this is one of the most generous local support programs in the country, especially important in a market where entry-level home prices are rapidly rising.

South Carolina First-Time Homebuyer Programs

Here are South Carolina’s top programs: 

SC Housing Homebuyer Program (Bond Loans)

The primary program of the South Carolina State Housing Finance and Development Authority, as outlined in the South Carolina Code of Laws, Title 31, Chapter 13. The program uses state-issued bonds to provide 30-year fixed-rate mortgages at low interest rates and down payment assistance.

Down payment assistance is offered as a forgivable second mortgage, typically equal to 4% of the principal amount of the first mortgage. If you remain in the home for 15 years, the loan is fully forgiven. The program is available with FHA, VA, USDA, and conventional loans. Mortgage interest rates are often below market rates due to the availability of bond funding.

Eligible participants include first-time homebuyers or buyers purchasing in federally targeted areas. In addition, applicants must meet the following requirements:

• Have a minimum credit score of 640
• Meet income and home price limits, which vary by county and household size (for example, in 2025, up to $93,200 income in most counties)
• Purchase a primary residence located in South Carolina
• Complete a HUD-approved homebuyer education course

Palmetto Home Advantage

A flexible down payment assistance program from SC Housing that provides 3% or 4% of the loan amount for down payment and closing costs. Unlike the main bond program, there is no purchase price limit, and the program is available to repeat buyers.

The down payment assistance is forgivable over a 10-year period and requires no monthly payments. It is compatible with FHA, VA, USDA, and conventional loans. Reduced mortgage insurance premiums are available for qualifying conventional loans.

To participate, the income must be below $127,200. Applicants must also meet the lender’s credit and underwriting requirements. The program is open to both first-time and repeat homebuyers.

Many buyers do not meet the stricter requirements of bond programs, but Palmetto Home Advantage offers broader eligibility while still covering most or all of the down payment.

SC Mortgage Credit Certificate (MCC)

Just like in North Carolina, this program, supported by the Internal Revenue Service (IRS), provides a federal tax credit of up to $2,000 per year for the entire term of your mortgage. It is authorized by the IRS and administered by SC Housing. 

You claim the tax credit each year when filing your federal tax return (IRS Form 8396). You must apply before closing and meet the income and purchase price limits.

Eligible participants include first-time homebuyers, veterans, or buyers in designated target areas. Income and purchase price limits vary by county and household size.

Tax credits directly reduce your tax liability, increase your net income, and make homeownership more affordable year after year.

Palmetto Heroes 2025

A special program for South Carolina’s public service workers: teachers, nurses, law enforcement officers, firefighters, EMS personnel, correctional officers, and active-duty military members.

It offers $10,000 in down payment assistance, along with reduced mortgage interest rates. Funding is limited and awarded on a first-come, first-served basis—it often runs out quickly (in 2025, funds were exhausted by May). The program may return in early 2026, pending state legislature approval of funding.

Eligible participants must be employed in one of the approved public service fields and meet standard income and credit requirements. The home must be used as the primary residence.

Federal Programs Available in the Carolinas

In addition to state and local options, federal mortgage programs are available to eligible first-time buyers in both states and can often be used in combination with state assistance:

1. FHA Loans

• Insured by the Federal Housing Administration (12 U.S.C. §1709).
• Minimum down payment: 3.5%.
• Minimum credit score: 580 (may be higher with some lenders).
• Flexible on debt-to-income ratio and alternative credit history.

Who benefits? First-time buyers with limited savings and less-than-perfect credit.

2. VA Loans

• Guaranteed by the U.S. Department of Veterans Affairs (38 U.S.C. Chapter 37).
• No down payment required.
• No private mortgage insurance.
• Competitive interest rates.

Who benefits? Eligible veterans, active-duty military, and some surviving spouses. Requires a VA Certificate of Eligibility (COE).

3. USDA Loans

• Backed by the U.S. Department of Agriculture (7 CFR Part 3555).
• No down payment required.
• Income must be below 115% of the Area Median Income.
• Property must be in a designated rural area (USDA property eligibility map).

Who benefits? Buyers in rural or semi-rural communities often have limited access to other mortgage types.

4. Fannie Mae HomeReady® and Freddie Mac Home Possible®

• 3% down payment options.
• Reduced mortgage insurance premiums.
• Flexible sources of down payment (can be gifts or grants).

Who benefits? Moderate-income buyers who may not qualify for FHA or VA, or who want to keep monthly payments low.

How to Apply for a First-Time Homebuyer Program

Applying for a homebuyer program is a multi-step process that requires attention to detail, but following these steps will maximize your chance of success:

1. Research programs for your area and situation. Check official state, city, and county housing websites for the latest updates, eligibility calculators, and program guides.
2. Complete a HUD-approved homebuyer education course. Required by almost all programs; covers the basics of mortgages, budgeting, credit, and home maintenance.
3. Choose an approved lender. State agencies only work with approved lenders (listed on their websites). These lenders understand the requirements and will guide you through each step of the process.
4. Get pre-approved for a mortgage. Lenders will review your credit, income, debts, and down payment sources.
5. Gather required documentation:
   • Government-issued ID (driver’s license, passport, or permanent resident card)
   • Proof of income (pay stubs, tax returns, W-2s, Social Security award letters, etc.)
   • Bank statements
   • Employment verification
   • Homebuyer education certificate
   • Signed purchase agreement (when under contract)
6. Apply through your lender, not directly to the state. Most programs require your lender to submit paperwork to the state agency on your behalf. The lender will make sure your loan and down payment assistance are approved and ready for closing.

Following this process ensures you meet all legal requirements and maximize your chance of receiving assistance. Education protects you from common mistakes; working with an approved lender ensures compliance with all rules.

Where to Get Counseling and Financial Education

Education is not only required—it’s your best defense against making costly mistakes. You can find HUD-approved homebuyer education through:

• eHome America: Offers a convenient online course recognized nationwide.
• Local housing agencies: Many cities and counties have in-person or virtual classes.
• HUD-approved nonprofit organizations: Search the HUD counselor database for local options.

Courses cover everything from mortgage basics to maintaining your home and avoiding foreclosure. Completion is required for most assistance programs and can improve your financial literacy for life.

How to Compare Multiple Assistance Options

Choosing the right program is about more than just the biggest dollar amount. Ask yourself:

• How much total assistance can I receive?
• Is the assistance forgivable, or will I have to repay it if I move?
• Are there limits on combining programs (for example, can I use a local grant with a state loan)?
• What are the income and purchase price limits?
• What are the program’s application deadlines and funding availability?

Meet with an approved lender or a housing counselor before you start home shopping. They can run the numbers and tell you exactly which programs you can use together.

Frequently Asked Questions

Do I have to repay the assistance?

Most programs are forgivable after you live in the home for a certain number of years (often 10-15). If you move or refinance early, you may have to repay a portion. Read your program agreement carefully.

Can I combine programs?

Sometimes, yes. For example, you might be able to pair a state down payment loan with a city grant. But some programs, like the NC $15,000 down payment loan and the MCC tax credit, cannot be combined. Always check eligibility rules.

What happens if I sell my home early?

You may owe repayment of the remaining “unforgiven” portion of your assistance. Ask your lender or agency for a payoff schedule.

How do I find an approved lender?

Each state and city program lists participating lenders on its official website. Use these lenders only to ensure program compliance.