Nebraska, like most areas, has incentive programs in place designed to encourage people to invest their future in the state. There are both federal and state programs in play for new homeowners relocating or buying their first property in Nebraska. In addition, some of the cities offer their own incentive plans to coax people to call them home. For first time home buyers, Nebraska offers a few extra perks if you qualify. The key is to find the program that best suits your individual home buying needs and then see what the requirements are to take advantage of it.
How About Homebuyer Assistance?
When it comes to buying a home, whether it is your first or not, Nebraska offers little in the way of grants. The program that has replaced the grants scenario is called Homebuyer Assistance. With HBA, you combine the benefits of a first mortgage loan with a second loan that covers the down payment.
The first mortgage loan goes toward the property principal and interest. It is a 30-year fixed mortgage with no origination fee. The loan is made at the Nebraska Investment Finance Authority (NIFA) rate, currently 3%. You must make a minimum investment payment of $1,000, but this can be gift funds.
The second mortgage, which is covering your down payment, is also made at the current NIFA rate. It is a 10-year term loan with no origination fee. The amount of this loan cannot exceed 5% of the purchase price of the property. You will need to make an initial payment on both the principal and interest to qualify.
This program requires you to be a first-time home buyer, defined as someone who has not owned a home within the past three years. You must have a credit score of at least 640 in most cases, but they do make exceptions. Your maximum debt to income ratio requirement is 45%. This program is not available in all parts of the state, but rather designed to stimulate population growth in specific areas unless you are a qualified veteran.
What is First Home Plus?
First Home Plus is another program offered by the Nebraska Investment Finance Authority. This program provides a low-interest rate for first-time home buyers but no down payment assistance. As with all NIFA programs, you need a credit score of 640, unless given an exception, and a maximum debt to income ratio of 45%. You must also be a first home buyer, having not owned or lived in a home for the past three years, or lost your house in a divorce, forced job relocation or natural disaster.
What is First Home Focused?
The third program offered by NIFA is called First Home Focused. This incentive plan is available to any first time buyer willing to purchase in a federally designated target area in one of these Nebraska counties:
- Adams
- Douglas
- Jefferson
- Lancaster
- Scotts Bluff
The purpose of the program is to stimulate economic growth in these areas of the state by offering low-interest loans to qualified first time home buyers. The qualification requirements are the same as they are for other NIFA loans. You must have a credit score of 640 unless given an exception and a debt to income ratio of 45%.
The program also has limitations for income and purchase price based on location and family size. For example, a buyer with 1-2 family members looking to live in the targeted area of Adams Country must have a combined income of $81,240 or less. The property cost cannot exceed $250,000. There are different price levels for different bedroom sizes, too. A single unit must cost $250,000 or less, but a 2 bedroom unit can be as much as $316,850. If buying in Lancaster, the income qualification changes to $85,200 for a family with 1-2 people.
What Assistance is There at the Community Level?
Once you have exhausted your options for federal programs like HUD or FHA, and applied to all the state-run incentive plans, the next place to look is in the community you hope to buy. Many cities in Nebraska want to promote local growth, so local organizations offer plans designed to draw in first time home owners. For example, Hastings, population of around 25,000 with a median home price of $161,900, has first time home buyer assistance through the Hastings Development Corporation.
Norfolk, on the other hand, provides home buyer assistance using a partnership program conducted by the city and the Elkhorn Valley Community Development Corporation. Norfolk, Nebraska sits in the mid northeast section of the state between Omaha and Sioux City and has a population of 25,000 people. Homes in this area sell for around 119,500 and the median house size is 1,612.
What About Buying Rural?
Of course, Nebraska is known for its farmland, so it you are interested in buying a rural property there, check the opportunities available through the United Stated Department of Agriculture Rural Development program. The Single Family Housing Guaranteed Loan Program in Nebraska offers assistance to those who meet the income standards and who are willing to buy designated properties. This program is there for any home buyer, whether you are investing in your first property or not. The stipulation is you must live in the house you buy through this plan. It does not cover rental or investment properties.
When considering making Nebraska the place you call home, first time home buyers should start at the federal level when looking for assistance. The next step would be to explore the state sponsored programs offered by NIFA, many of these work in conjunction with federal loan plans like HUD or FHA. From there, see what the community properties look like, focusing on target areas or cities that provide buyer’s assistance.
2 Point Highlight
There are both federal and state programs in play for new homeowners relocating or buying their first property in Nebraska. In addition, some of the cities offer their own incentive plans to coax people to call them home.
