North Carolina First-Time Home Buyer: 2022 Programs & Grants

What to know about buying a house in North Carolina

Buying your first home can be complicated no matter where you’re purchasing. But the good news is, you don’t have to go it alone.

North Carolina first-time home buyers have plenty of advice and educational support readily available. And The Old North State is home to various programs that might provide financial help with your down payment and (sometimes) closing costs. Here’s how to get started.

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North Carolina home buyer overview

According to Redfin, the typical home price in North Carolina was $360,200 in April 2022. That was 19% higher than the same time a year earlier.

North Carolina home buyer stats

Average Home Sale Price in NC1	$360,200
Minimum Down Payment in NC (3%)	$10,806
20% Down Payment in NC	$72,040
Average Credit Score in NC2	707
Maximum NC Home Buyer Grant3	Up to 5% of the loan amount (NCHFA, below)

Down payment amounts are based on the state’s most recently available average home sale price. “Minimum” down payment assumes 3% down on a conventional mortgage with a minimum credit score of 620.

If you’re eligible for a VA loan (backed by the Department of Veterans Affairs) or a USDA loan (backed by the US Department of Agriculture), you may not need any down payment at all.

First-time home buyer loans in North Carolina

If you’re a first-time home buyer in North Carolina with a 20% down payment, you can get a conventional loan with a competitive interest rate. And you never have to pay for private mortgage insurance (PMI).

Of course, few first-time buyers have saved enough for 20% down. But the good news is that you don’t need that much. Not by a long shot.

Borrowers can often get into a new home with as little as 3% or even 0% down using one of these low-down-payment loan programs:

• Conventional 97: From Freddie Mac or Fannie Mae. 3% down payment and 620 minimum credit score. You can usually stop paying mortgage insurance after a few years
• FHA loan: Backed by the Federal Housing Administration. 3.5% down and a 580 minimum credit score. But you’re on the hook for mortgage insurance until you refinance to a different type of mortgage, sell your home, or pay off your loan
• VA loan: Only for military veterans and service members. Zero down payment is required. Minimum credit score varies by lender but often 620. No ongoing mortgage insurance after closing. These are arguably the best mortgages available, so apply if you’re eligible
• USDA loan: For those on low-to-moderate incomes buying in designated rural areas. Zero down payment required. Credit score requirements vary by lender but often 640. Low mortgage insurance rates
• North Carolina Housing Finance Agency: May include competitive interest rates and down payment assistance. More information below

Depending on the mortgage loan you choose, you could potentially become a homeowner with minimal cash out of pocket.

These loan types even let you use gifted money or down payment assistance (DPA) to cover the down payment and closing costs.

If you’re not sure which program to choose for your first mortgage loan, your lender can help you find the right match based on your finances and home buying goals.

NC first-time home buyer programs

The North Carolina Housing Finance Agency (NCHFA) encourages first-time home buyers in the state to use a housing counselor approved by the US Department of Housing and Urban Development (HUD). And it stresses that “Many mortgage programs require their buyers to obtain pre-purchase counseling from a HUD-approved housing counselor.”

Yes, there’s a modest cost to this homebuyer education. But the advantages of having an independent expert hold your hand through the process can be considerable.

And, to help you get started, the agency provides a free download of a Pocket Guide to Home Ownership in English and Spanish.

NCHFA home buyer assistance program overview

While home buyer education is required in some cases, first-time buyers should always adhere to these guidelines.

• Depending on the loan type, buyers can purchase a single-family, home, duplex, townhouse, or a new manufactured home
• Minimum credit score of 640 required
• Buyer income and purchase price must be within program limits
• Debt-to-income ratio must be less than 43%

Qualifying buyers can choose between an FHA loan, VA loan, or USDA loan through the program’s partner lenders. And financing comes in the form of a 30-year fixed-rate mortgage.

NC first-time home buyer grants

The North Carolina Housing Finance Agency also provides generous down payment assistance loans to eligible first-time buyers across the state.

The NCHFA doesn’t spell out the terms for its mortgage product.

However, it does explain that its down payment assistance program is a zero-interest second mortgage with no monthly payments that is completely forgiven after you’ve owned and lived in the home for 15 years.

• If you sell or move within the first 10 years, you’ll have to repay the full loan amount
• 20% of the loan amount is forgiven at the end of each of year in years 11 through 15
• After that, you’ll owe nothing

To be eligible for its home buyer assistance program, your household income can’t exceed $99,000 per year. And you need a credit score of 640 or higher. There are other conditions too, which you’ll find on the NCHFA website.

Meanwhile, some first-time buyers may get an NC Home Advantage Tax Credit.

With this, you get a Mortgage Credit Certificate (MCC) that could save you up to $2,000 each year on your federal taxes. But MCCs are only available with an NC Home Advantage Mortgage, not an NC 1st Home Advantage Down Payment.

Buying a home in North Carolina’s major cities

As is often the case, home prices are high in big, prosperous cities. And that’s certainly true for Charlotte and Raleigh. But Greensboro prices tend to be lower than the state average, but they’re rising quickly.

Charlotte first-time home buyers

The median purchase price for homes in Charlotte was $400,000 in April 2022, according to Realtor.com. That was up 12% year-over-year.

If you want to buy a home at that median price, your down payment options might fall between:

• $12,000 for 3% down payment
• $80,000 for 20% down payment

If you’re a first-time buyer wanting a home in Charlotte, check out the HouseCharlotte Program. That’s a City of Charlotte initiative, administered by a private-sector company.

It has five different programs for people with low and median incomes. These take the form of zero-interest loans with no monthly payments. These are all forgivable after a set period: five, 10, or 15 years. Visit the website for eligibility information and more details.

Raleigh first-time home buyers

As with Charlotte, the median sales price of homes in Raleigh was $400,000 in April 2022. According to Realtor.com, that was up 15.9% year-over-year.

If you want to buy a home at that median price, your down payment options might fall between:

• $12,000 for 3% down payment
• $80,000 for 20% down payment

The City of Raleigh requires you to attend a homeownership class and get a certificate before you can enter its down payment assistance program.

Once you have that, it says, “Our Homebuyer Program offers low-interest loans up to $20,000 to help with down payment and closing costs or a gap in financing. The principal balance is reduced on a set schedule and is forgiven if the owner continues to live in the residence for 20 years. Please note that conditions may apply.”

Greensboro first-time home buyers

In April 2022, the median list price of homes in Greensboro was $280,000, according to Realtor.com. That was up 27.3% year-over-year.

If you want to buy a home at that median price, your down payment options might fall between:

• $8,400 for 3% down payment
• $56,000 for 20% down payment

The City of Greensboro’s Housing Connect Homebuyer Down Payment Assistance Program can provide up to $10,000 to eligible first-time buyers.

This takes the form of a zero-interest second mortgage, with no monthly payments, that is forgiven after just five years of your retaining ownership of the home and remaining in residence. And you can borrow on the same terms up to $15,000 in total down payment assistance if you buy in one of the city’s redevelopment areas.

Various eligibility and conditions apply and you can find them on the website. But these are less strict than many others, especially when it comes to income limits.

Where to find home buying help in North Carolina

All the organizations we’ve listed above should provide advice freely to any first-time home buyer in the state of North Carolina or their local area.

Your real estate agent and loan officer can also help when it comes to locating down payment assistance and choosing a loan program.

In addition to our selection, the U.S. Department of Housing and Urban Development (HUD) provides a few lists for statewide, regional, and local resources which you can see here.

State and regional first-time home buyer programs in NC

Local first-time home buyer programs in NC

Greensboro, NC
The Greensboro Housing Coalition
More than just a mortgage program Will help you to realize the dream of homeownership
Call today to reserve your space!
(336) 691-9521

Rocky Mount, NC
South Eastern North Carolina Community Development Corporation
1006 Aycock Street
Rocky Mount, NC 27803
Contact: Larry Russell
(252) 977-3141

What are today’s mortgage rates in North Carolina?

You can see today’s live mortgage rates in North Carolina here.

When you’re ready to start the home buying process, make sure you get personalized rate quotes from at least three mortgage lenders.

Don’t just look at advertised rates online; actually apply for preapproval and compare the interest rates and fees you’re offered. That’s the only way to know you’re getting the best deal possible on your new home loan.

¹Source: REDFIN Housing Market Overview 
²Source: Experian.com study of 2021 and 2020 data
³Based on a review of the state’s available DPA grants at the time this was written