Down payment assistance

Down payment assistance in Alabama

1 program can help buyers in Alabama with a down payment and closing costs. Most are for first-time buyers with moderate incomes and are used with a participating lender.

Check which programs fit your situationDown payment assistance finder

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Open · Repayable loan

4% of the sales price up to $10,000

Down payment assistance secured by a 10-year second mortgage, paired with an AHFA 30-year fixed first mortgage. It is repaid monthly: AHFA's servicer (ServiSolutions) bundles both loans into one monthly payment. The same assistance is available with AHFA's First Step bond program for first-time buyers.

Who qualifies: Income of $172,800 or less, regardless of household size or location. Minimum credit score 640. DTI 45% or lower. Homeownership education course required. HFA Advantage conventional, FHA, VA or USDA loans only. Apply through a participating lender.

Alabama Housing Finance Authority · Agency website → · Checked 2026-09-30

How assistance usually works

Most programs are a second loan with no monthly payment that is forgiven over time or repaid when you sell or refinance, and some are grants. You usually need a program first mortgage from a participating lender, a homebuyer education course and income under the program’s limit. Apply before you make offers, so your pre-approval reflects the help.

More for Alabama

Alabama closing costs Alabama property taxes Where can I afford to buy in Alabama?Down payment timeline

Programs change often; confirm the details with the agency.