First-Time Homebuyer Programs

A first-time homebuyer is someone who has not owned a primary residence in the last three years. AHFC has two programs for first-time homebuyers, the Tax-Exempt and the Taxable First-Time Homebuyer.

Tax-Exempt First-Time Homebuyer Program

The Tax-Exempt Program (TEP) offers lower interest rates to eligible first-time homebuyers who meet maximum income limits and acquisition cost limits. 

How the Program Works

To be eligible for the TEP for first-time homebuyers, borrowers may not have owned a primary residence in the last three years unless the house is within a targeted area (as defined below) or if they are qualified veterans.

  • Targeted areas (HUD designated census tracts) have higher income and acquisition cost limits. To find out if a property is located in a targeted area census tract, go to factfinder and perform a street address search.
  • Qualified veterans must have been retired, discharged or released from duty under conditions other than dishonorable, and active duty military borrowers must have completed their initial military obligation. Acceptable evidence of eligibility includes a copy of the veteran's Certificate of Eligibility or Title 38 letter and a DD214 or Statement of Service. No previous use of the TEP or Veterans Mortgage Program is allowed under the veterans' exception.

Federal regulations establish maximum income limits and acquisition costs for this program. Income is determined by multiplying the borrower's gross monthly income by 12. Acquisition cost is the total cost of acquiring the property from the seller.

Additional Considerations

  • Eligible properties are limited to single-family homes, condominiums, Common Interest Community units, duplexes and Type I manufactured homes.
  • A duplex must be at least five years old and occupied as a multi-family residence for at least the last five years.
  • Borrowers must submit copies of federal income tax returns for the last three years.
  • Borrowers who obtain a TEP loan may have to pay Federal "recapture" tax tax following the sale of their home. AHFC recommends consulting a tax professional to determine if the recapture penalty applies. 
  • Borrowers are required to read the Tax-Exempt Booklet.

LOAN OPTIONS

How to Apply


Taxable First-Time Homebuyer Program

This first-time homebuyer program offers a reduced interest rate to eligible borrowers. Unlike the tax-exempt program, there are no maximum income limits or acquisition cost limits. 

How the Program Works

This program is designed for first-time homebuyers who wish to purchase a home that exceeds the acquisition cost limits or income limits of the Tax-Exempt Program (TEP) or whose income exceeds TEP income limits. 

Additional Considerations

  • First-time homebuyers have not owned a primary residence in the last three years.
  • Eligible properties include owner-occupied single-family residences, condominiums, Common Interest Community units, duplexes and Type I manufactured homes.
  • At least one unit in a duplex must be the principal residence of the borrower.
  • Borrowers must submit copies of federal income tax returns for the last three years.

LOAN OPTIONS

How to Apply: