What You Should Know About Buying a Home in Ohio
If this is your first time home buying in Ohio, consider yourself lucky. Because Buckeye State offers great support to people like you. You could stand in line for personal advice, free homebuyer training, and even a generous down payment.
You may even be eligible for a grant (which never has to be paid back) of up to 5% of the purchase price of your first home. Imagine the difference your home buying plans could make.
How to start.
Check Your Eligibility To Buy A Home In Ohio. Start here (29.09.2021)
In this article (continue to …)
Ohio Home Buyers Summary
The Ohio Realtors Association says the average sales price across Ohio was $ 252,200 in July 2021. That was 12.9% more than in the same month in 2020.
The sharp rise in home prices makes it difficult to save on a down payment and closing costs. So be sure to read on for information about homebuyer assistance programs that can help you bridge the gap between your savings and these needs.
Ohio Home Buyers Summary
Average Ohio Home Sale Price
$ 252,200
Minimum deposit in Ohio (3%)
$ 7,560
20% deposit in Ohio
$ 50,430
Average Credit Score in Ohio1
711
Maximum Grant for Home Buyers in Ohio2
5% grant from Communities First Ohio
Down payment amounts are based on the last available average home sale price in the state. A “minimum” down payment is assumed to be 3% less than a conventional mortgage with a minimum credit rating of 620.
If you are eligible for a VA loan (supported by the Department of Veterans Affairs) or a USDA loan (supported by the U.S. Department of Agriculture), you may not require a down payment at all.
Check Your Eligibility To Buy A Home In Ohio. Start here (29.09.2021)
Initial Loans For Homebuyers In Ohio
First time home buyers with a 20% down payment in the state of Ohio can get a conventional loan at a low interest rate. And you never have to pay for personal mortgage insurance (PMI).
Of course, only a few first-time buyers have saved enough for 20 percent. But the good news is you don't need that much. By far not.
Borrowers can often move into a new home as little as 3% or even 0% with one of these low down payment mortgage programs:
Conventional 97 – From Freddie Mac or Fannie Mae. 3% down payment and at least 620 credits. You can usually stop paying mortgage insurance after a few yearsFHA loans – Supported by the Federal Housing Administration. Down 3.5% and a credit score of at least 580. But you're usually on the hook for mortgage insurance until you refinance, move to another type of mortgage, or pay off your loanVA loan – For veterans, active service members, reservists and the National Guard only. A zero deposit is required. The minimum credit score varies by lender, but is often 620. No ongoing mortgage insurance upon completion. These are arguably the best mortgages available. So apply when you are eligibleUSDA loan – For low to middle income people who shop in designated rural areas. Zero deposit required. The creditworthiness requirements vary depending on the lender, but often 640. Low mortgage insurance ratesOHFA or Communities First Ohio – May include competitive mortgage rates and can be used with down payment assistance. More information below
Note that most of these programs require you to purchase a primary residence. This is a home that you will live in full time, not a vacation home or investment.
However, depending on the type of loan you choose, you may be able to move into your new home with minimal cash.
With these programs, you can even use free cash or Down Payment Assistance (DPA) to help cover down payment and closing costs.
If you are unsure which program to choose for your first mortgage loan, your lender can help you find the right deal based on your finances and your home purchase goals.
Find the best first-time buyer loan for you (09/29/2021)
Ohio Programs for First Time Home Buyers
Ohio has some great first-time purchaser programs nationwide that could make your home purchase more affordable. These include the My Ohio Home and Communities First mortgage programs.
My Ohio home
OhioHome.org is part of the state government's Ohio Housing Finance Agency (OHFA).
The OHFA offers programs based on conventional mortgage loan, USDA loan, and VA loan (which require a credit rating of at least 640). It also has FHA loans for which this minimum is 650.
As is common with these government programs, you must:
There are three basic eligibility criteria. They must be one or more of the following:
A first-time home buyer (i.e. you must not have had a primary residence in the past three years); ORA Veteran Honored Discharge; OR you are planning to buy a home in one of the OHFA's target areas
There are other eligibility requirements as well, including income caps and purchase price caps. Further information can be found on the OHFA website.
Communities first
Communities First Ohio is operated by the Port of Greater Cincinnati Development Authority and appears to offer mortgages to all first-time home buyers in Ohio. You can expect similar rules and eligibility criteria as with OHFA mortgages.
However, Communities First appears to be offering a more generous Down Payment Assistance (DPA) along with its loan programs – including homebuyer grants of up to 5 percent of the home price.
Grants for First Time Home Buyers in Ohio
The OHFA's offer of deposit assistance is pretty good compared to many nationwide. It has a number of programs, but the most popular is probably your choice! Assistance with the deposit.
This allows first-time home buyers in Ohio to borrow either 2.5% or 5% of the purchase price of their next home. This is a loan that is granted after seven years. This means that if you stay in the apartment for at least seven years, you don't have to pay anything back.
What do you dislike? Well, you will need to repay the OHFA loan in full if you move, sell, refinance, or transfer your home mortgage during those seven years.
With Communities First, you can apply for a 3, 4, or 5 percent grant of the purchase price of your next home. And since it's a grant, you never have to pay back the funds.
It is also easier for you to qualify for one of these grants than for an OHFA loan. Because only the borrower's income is counted, not that of the entire household. Further details can be found in the program brochure.
Check Your Eligibility To Buy A Home In Ohio. Start here (29.09.2021)
Buy a home in major Ohio cities
Ohio is one of the states that is on average cheaper to buy a home in a large city than it is in the entire state. And if you want to shop in Cleveland, you're twice as lucky. Because home prices are about half as high as in Columbus and Cincinnati. And prices in Cleveland are rising a lot less quickly.
Columbus first time home buyer
The average list price in Columbus was $ 229,900 as of August 2021, according to Realtor.com. That was 12.2% more than in the previous year.
If you want to buy a home at this average price, your down payment options can be between the following options:
$ 6,900 for 3% deposit$ 45,980 for 20% deposit
The City of Columbus has a down payment support program called the American Dream Down Payment Initiative (ADDI).
The program offers five year deferred loans. So you do not have to repay the money received, provided that you do not move out of the house during this time, refinance yourself, pay off your mortgage.
Some selection criteria are listed under this link. But details (including how much you can borrow) are sparse. For more information, call (614) 645-7896.
Cleveland first time home buyer
The average list price in Cleveland was $ 113,000 as of July 2021, according to Realtor.com. That was 3.7% more than in the previous year.
If you want to buy a home at this average price, your down payment options can be between the following options:
$ 3,390 for 3% deposit$ 22,600 for 20% deposit
Cleveland's Down Payment Assistance is administered by Cuyahoga County. It offers deferred credit of up to a staggering 10% of the purchase price.
This can be used for homes up to $ 149,000 in value. So the loan amount is capped at $ 14,900. Still, this home price cap is higher than the average list price for the city.
The loan is never granted. But it's only paid back if you move, sell, refinance, transfer, or pay off your mortgage.
You can download a PDF program guide from the Cuyahoga County website for more information, including income limits and other eligibility criteria.
Cincinnati first time home buyers
The average list price in Cincinnati was $ 224,900 as of August 2021, according to Realtor.com. That was 15.3% more than in the previous year.
If you want to buy a home at this average price, your down payment options can be between the following options:
$ 6,750 for 3% deposit$ 44,980 for 20% deposit
The city of Cincinnati operates an American Dream Downpayment Initiative program for first-time home buyers with modest incomes. And you can borrow up to $ 5,000 as an interest-free deferred loan that expires after five years.
However, the city's website states: "All or some of the funds will be reclaimed if a homeowner moves out of the home, sells or transfers property during the five-year residence period."
Download the program manual (PDF) for full details.
Where can I find help buying a house in Ohio
All of the organizations listed above should provide free advice to any first-time home buyer in the Ohio or vicinity.
In addition to our selections, the US Department of Housing and Urban Development (HUD) provides lists of statewide, regional, and local resources:
State and regional programs in Ohio
You can also find programs by county, city, and city on the HUD website for first time home buyers in Ohio.
What are the current Ohio mortgage rates?
Here you can see current Ohio mortgage rates.
When you're ready to start buying your home, make sure you get personalized interest rate quotes from at least three mortgage lenders.
Don't just look at the advertised prices online; Indeed, apply for pre-approval and compare the interest rates and fees that are offered to you. This is the only way you can be sure that you are getting the best possible offer for your new home loan.
Confirm your new plan (September 29, 2021)
1 Source: Experian.com 2021 study on 2020 data
2Based on a review of available state DPA grants at the time of this writing
