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If you’re a first-time homebuyer in Mississippi, you could be eligible for assistance through the Mississippi Home Corporation. The state housing finance authority can connect you with mortgage programs and down payment assistance that can help with the upfront costs of buying a home, and also has special programs for certain types of borrowers. Here’s a look at what the agency has to offer.
Mississippi first-time homebuyer loan programs
MHC Smart Solution
Mississippi Home Corporation’s (MHC) Smart Solution program offers 30-year mortgages at competitive rates and with lower mortgage insurance premiums. The loan options include Freddie Mac (up to 97 percent financing), FHA, VA and USDA mortgages, which can be combined with down payment assistance funds.
Smart Solution is for first-time and repeat homebuyers buying a home in the state, either a single-family home, condominium, townhome or duplex. Manufactured homes are also allowed with an FHA loan. Other eligibility requirements include having a 640 minimum credit score, and a household income of no more than $95,000.
MHC Mortgage Revenue Bond 7
MHC’s Mortgage Revenue Bond 7 (MRB7) program also comes with a competitive interest rate and down payment assistance, but is geared toward first-time homebuyers, veterans or those who are planning on purchasing a home in a specially-designated target area. You’ll need to meet certain criteria, including credit guidelines, which are based on the loan you choose: Fannie Mae or Freddie Mac, FHA, VA or USDA.
Like the Smart Solution program, you’ll need to be within income limits, but these differ based on the county. There are also purchase price limits: If the home is in a target area, the limit is $309,000; in a non-target area, it’s $258,000.
Mississippi down payment assistance
Like most first-time homebuyer programs, MHC’s mortgages and down payment assistance are combined together. As long as you meet the qualifying requirements for the first mortgage, you’ll be eligible for the assistance.
MHC Smart Solution Second
If you’re borrowing a mortgage through MHC’s Smart Solution program, you can take advantage of the Smart Solution Second down payment assistance, which offers help up to 4.5 percent as a second mortgage. The second mortgage is a 10-year loan with the same rate as your first mortgage.
MHC MRB7 down payment assistance
Through MHC’s MRB7 program, borrowers can receive up to $7,000 in a deferred, zero-interest loan to help cover closing costs and the down payment. This loan is forgivable after 10 years.
MHC Housing Assistance for Teachers
MHC’s Housing Assistance for Teachers (HAT) program offers a grant to eligible teachers, up to $6,000, for the down payment and closing costs. The grant is available to teachers educating in what the state has identified as “critical shortage areas”: Special Education, Mathematics, Foreign Language and Science. The grant will be forgiven so long as the teacher meets the program’s requirements, which include:
- Teaching for at least three years in critical shortage school district
- Buying a home in the county where the district is located
In addition, teachers will need to contribute at least 1 percent of their own funds towards the down payment, and have at least one month’s reserves.
Other Mississippi homebuyer assistance programs
Mortgage credit certificate (MCC)
First-time homebuyers in Mississippi can lower their federal income taxes through a mortgage credit certificate (MCC). The MCC is a tax credit of as much as 40 percent of your annual mortgage interest, up to $2,000 a year. The idea is that the credit can help you qualify for a mortgage, and make homeownership more affordable for you overall.
In addition to being a first-time homebuyer, you’ll also need to meet household income limits which vary based on county, and purchase price limits.
Other first-time homebuyer loan programs
First-time homebuyers in Mississippi have other options in addition to state-level assistance, including government loan programs. These include FHA, VA or USDA loans. If you have a lower credit score or a smaller down payment, these types of loans could work for you.
Conventional loans are also available to first-time homebuyers in Mississippi, some for as little as 3 percent down. Head over to Bankrate’s first-time homebuyer loans and programs guide to learn more.
When you’re ready to buy your first home, consider starting with the Mississippi Home Corporation to learn about the agency’s affordable mortgage options and the specific requirements of each. If you like what you see, you can connect with a participating mortgage lender in your area to determine next steps. Whichever type of financing you ultimately choose, be sure to research mortgage rates and offers to ensure you find the best rate and terms available.