November 2024 Lender News from AHFA

First Step is the Right Step to Help Homebuyers Save Big

In an uncertain economy, one thing is sure: A First Step Mortgage Revenue Bond loan from AHFA helps homebuyers save thousands of dollars.

On a median-priced home with a 30-year FHA loan, that’s an average savings* of more than $56,000 – about $1,875 per year for your borrowers.

If you’re not using the First Step program to reach first-time homebuyers, here are three reasons to add it to your toolbox:

Expand the pool. We all know that homeownership stabilizes and strengthens our communities. First Step’s lower-than-market interest rates help you reach first-time homebuyers and those of modest means who might otherwise be stuck in the cycle of monthly rent. More than 96 percent of our borrowers are first-time homebuyers.

Stack the savings. First Step loans also may be combined with up to $10,000 in a down payment assistance loan from AHFA. In addition, eligible borrowers may qualify for an Affordable Income Subsidy Grant toward closing costs. These add-ons further increase your borrowers’ purchasing power.

Build customer loyalty. Most first-time homebuyers eventually become repeat homebuyers. What’s more, those homeowners you’ve given a solid financial footing may need small business, home improvement, and auto loans down the road.

First Step loans are available with 30-year, fixed-rate, amortizing conventional, FHA, VA, Rural Development, and privately insured mortgages. Participants must meet federally established income and sales price limits based on geographic location.

“AHFA’s First Step loans result in real savings for Alabama’s first-time and lower-income borrowers,” said Executive Director Robert Strickland. “Every day we’re seeing schoolteachers, counselors, law enforcement personnel, ministers and more become homeowners through this program. We want Alabama lenders, homebuilders, and real estate professionals to be part of that.”

* Savings calculated on AHFA’s average FHA loan amount of $201,879. For more details on the First Step program, please visit AHFA.com.

Step Up Program Saves the Sale for First-Time Buyer

Alex Castanza, a loan officer with Guild Mortgage in Montgomery, described a recent “win” using AHFA‘s Step Up down payment assistance.

“I had a borrower who had just enough money to either pay for closing costs or put a down payment on her home,” he said. “She found the perfect starter home for her, but the sellers were not going to give her any help on her closing costs. With that, we were able to use the Step Up program to secure her down payment funds and close on her first house ever. Thank you, AHFA, for making this possible.”

Going the extra mile for borrowers earned Guild Mortgage special recognition as AHFA's Top Participating Lending Company for the fourth quarter of FY2024. Step Up gives lenders like Castanza an option for reaching moderate-income homebuyers who can afford a mortgage but need help with the down payment. Nearly 1,000 households earning less than $159,200 benefitted from Step Up's down payment assistance loans last year, resulting in approximately 22,000 families helped since the program’s inception. For more information, please visit the Step Up page on AHFA.com.

Realtors and Lenders, Let’s Connect!

Are you a mortgage or real estate professional who wants to know more about AHFA programs? AHFA offers on-site training on our programs that covers borrower and property eligibility, processing, documentation, income calculations and more. Our “Doing Business with AHFA” class qualifies for 3 CEUs, certified by the Alabama Real Estate Commission.