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North Carolina First-Time Homebuyer Guide 2023

Couple hiking overlooking the Blue Ridge Mountains in North Carolina

Owning and maintaining your own home in North Carolina may be part of the American Dream. If you’re thinking about making the jump from renting your space to owning a home in the Tar Heel state, know that there are multiple loan and buyer assistance programs that can make your dream a reality. 

Read on to learn more about the benefits of buying your first home in North Carolina and how to get started investing in a home for the first time. 

Benefits of Being a First-Time Homebuyer in North Carolina 

Buying your first home can be an exciting and scary process. However, as a resident of North Carolina, you have access to a range of first-time buyer programs and opportunities that can make the dream of homeownership a reality. Some benefits that may be available to North Carolina residents include:

  • First-time buyer loans: Government-backed mortgage loan options like the United States Department of Agriculture (USDA) loan and Federal Housing Administration (FHA) loan may allow you to buy a home with $0 down or a lower credit score. 
  • State down payment assistance: North Carolina’s state down payment assistance program is managed by the North Carolina Housing Finance Agency. Depending on qualification criteria, you could get up to $15,000 to put toward your home’s down payment. 
  • Local programs: When compared to other states, more of North Carolina’s major cities offer independent down payment assistance that can be combined with state relief. The City of Concord, Greensboro, and Charlotte are just a few of the cities currently offering homebuying assistance to first-time purchasers. 

Qualifications for First-Time Homebuyers in North Carolina

Curious about who counts as a first-time homebuyer in North Carolina? It might surprise you to know that you could still fall under this category even if you owned a home more than three years ago. Under HUD's definition of a first-time buyer, anyone who hasn’t had ownership of a property in the last three years qualifies.

Questions to Ask Before Buying Your First House in North Carolina

While buying a home can be a solid investment in your future, it’s important to buy your home at a time that makes sense for you. Be sure to ask yourself the following questions before purchasing a home.

1. What are Your Personal Long-Term Goals? 

Signing onto a mortgage loan can be up to a 30-year-long commitment, and while you have the option to refinance, it’s important to ensure your housing fits with your long-term goals. Your home should complement your future plans, whether they involve starting a family, advancing your career, or seeking a serene retirement. 

Thinking about long-term goals helps avoid making a decision too quickly and ensures that the chosen property serves as a strategic asset to support your lifestyle. If your plans include staying in one area for a long-term period, buying a home now might be a smart choice. 

2. What is Your Financial Situation?

Understanding your financial situation is important when buying a home, as it forms the foundation of a successful and sustainable homeownership journey. If you’re currently renting, know that owning a home includes a series of expenses that you might not need to budget for right now. Be sure to consider costs like homeowners insurance, mortgage insurance, and ongoing maintenance expenses when you consider the full cost of homeownership. 

Not sure if you’re fully in a place to finance a home? Our mortgage calculator can help you get a more complete understanding of the cost of owning a home. Compare your current income with the calculator’s estimated mortgage payment to see if your income can support a home purchase. 

3. What are Your Housing Needs?

Your home is the base of operations for your daily life, meaning that it can be worth the time to wait until a great property is on the market before buying. Create a list of key features that you need in your next property before researching real estate prices of homes with these features. Features like the number of bedrooms in the home, the style of the house, and its address can all play a role in how you live each day. 

For example, your home's location in relation to your workplace can influence your daily routine and commute time, so you might want to shop for properties closer to your workplace. By thoroughly understanding your housing needs, you can make an informed decision that not only accommodates your immediate requirements but also enhances your overall living experience.

4. What is the Real Estate Market Trend?

Monitoring real estate market trends allows you to enter the housing market at the most opportune time. Using the steps above, set a rough budget and bookmark a few properties that fit your specifications using an online real estate database. Track how prices are changing over time and monitor mortgage rate changes as well. When it looks like rates and prices are falling where you want to buy, consider applying for a loan. 

5. What are Your Mortgage Options?

Did you know that there are multiple types of mortgage programs and loans for first-time buyers? Government-backed mortgage loans may allow you to buy a home with as little as $0 down depending on qualifications, income, and credit score. Pull your credit report and write down your credit score before you begin shopping for a loan; this action will help you narrow down options to only the ones you qualify for.  

First-Time Homebuyer Statistics in North Carolina

  • Average home price in North Carolina: $320,922

  • Minimum down payment in North Carolina: 0% (VA and USDA loans)

How to Apply for First-Time Homebuyer Loan Programs in North Carolina

If now feels like a good time to buy, you may want to apply for a mortgage pre-approval and start shopping. The following are the basic steps you will go through when you get your first home loan. 

1. Determine Your Budget 

While your mortgage lender ultimately determines how much money you can borrow to buy a home, getting a rough idea of your budget ahead of time makes the shopping process easier. Using the mortgage calculator linked above, create an estimate of how much you can afford to pay each month for your premium payment. You can use this figure as a guide to compare some market options while waiting on an official pre-approval figure. 

2. Get Pre-Approved for a First-Time Home Mortgage

Getting pre-approved for a mortgage loan gives you a clear budget to work with when you're looking for a property. During pre-approval, your mortgage lender looks over your financial information to make sure you're eligible for a home loan. If you get the green light, you'll receive a pre-approval letter stating the maximum loan amount you qualify for. This letter shows sellers and real estate agents that you're all set and serious about buying a home.

After you’re pre-approved for a mortgage loan, you can begin applying for first-time homebuyer programs. The Tar Heel state currently offers two options to access down payment assistance when buying your first home. 

  • NC Home Advantage Mortgage: The NC Home Advantage Mortgage is a first-time loan option that offers competitive rates on government-backed mortgage loans. If you qualify for the loan, you may also be able to go on to apply for up to 5% in down payment assistance. This assistance is issued as a second mortgage that is not due until you sell your home or refinance your loan. 
  • 1st Home Advantage Down Payment: The 1st Home Advantage Down Payment program offers first-time homebuyers and eligible military veterans with up to $15,000 in additional down payment assistance issued as a forgivable second mortgage. To qualify, you must be buying your first home using an NC Home Advantage Mortgage and have a credit score of at least 620 points. 

Additional down payment assistance programs may be available through your local government.

3. Hire a Real Estate Agent 

When it comes to buying a home, bringing a real estate agent on board is a smart move that can make a world of difference. To start the process, do some research to find agents in your area with solid experience and a track record of success. NAF Homes,* an affiliate of NAF, can be an invaluable resource in finding an agent to help you with your search. 

Why hire a real estate agent? Finding the right agent is like finding a partner for your homebuying journey. An agent knows the local market intricacies, has access to a wider range of properties, and can help negotiate a great deal. They're your advocate to the home seller, standing by to answer questions, offer insights, and guide you through paperwork. In a complex process like homebuying, having a skilled real estate agent by your side not only streamlines the journey but also ensures that you make well-informed decisions every step of the way.

4. Start the Search for Your Dream Home

Now comes the best part of the homebuying process: finding your perfect home. Work together with your real estate agent to tour properties within your budget. It can be helpful to create a list of wants and needs and share these details with your real estate agent, making sure they know how much flexibility you have in your budget to get them. Your agent will put together a list of properties for you to tour that fit your specifications until you find the perfect fit. 

5. Make an Offer 

When you find a home you’d like to buy, you’ll submit an offer letter to the current homeowner. An offer letter is a detailed proposal for a home sale, including details like who you are, the proposed price you’re willing to pay for the home, how you will be financing the property, the mortgage lender you’re using, and any contingencies on the sale. If the seller accepts your offer, you can move to close on your loan. 

6. Conduct Home Inspection 

Before moving forward with a home sale, be sure to schedule an inspection. A home inspection will give you an idea of any repairs that need to be made to the property that may be out of sight. If your inspection turns up major issues, you might need to renegotiate the sale with the homeowner. 

Note that an inspection is not the same thing as the appraisal required by lenders. During a home appraisal, a property value expert will take a tour of your new home and explore other recent sale prices to assign a rough estimate of what the property is worth. Lenders require appraisals to close on a mortgage because they cannot lend out more money than a home is valued at, but the inspection is usually optional. Still, you shouldn’t skip the inspection step unless you’re buying a completely new build. 

7. Close the Deal and Become a Homeowner

After your inspection comes back clear and your appraisal confirms your loan eligibility, it’s time to move to close your home. Your mortgage lender will schedule a closing meeting, during which you will have the opportunity to ask any last-minute questions about your loan or terms. At the end of the meeting, you will have the title signed over to you, officially marking the beginning of your journey as a homeowner. 

5 Traditional First-Time Homebuyer Programs in North Carolina

If you have not held ownership interest in a property in the last three years, you may qualify for first-time buyer programs and loan options. These loans have more flexible qualification criteria because they include insurance from branches of the federal government. 

Conventional Mortgage

Conventional loans are the most flexible type of mortgage loan, with no upper income cap or property requirement qualifications. Conventional loans are popular among buyers with higher credit scores because they tend to have lower interest rates and a minimum down payment as low as 3%. However, you will need to pay private mortgage insurance on your loan if you bring less than 20% of the purchase price to closing. 

FHA Loan

If you don’t have a lengthy credit history, an FHA loan might be a better choice for you. With insurance from the Federal Housing Administration (FHA), FHA loans are for buyers with lower income or less credit history. To qualify, you will need a credit score of at least 500 and a down payment of 3.5% or more. 

VA Loan

VA loans are specialized government-backed mortgage loans for those who are active members of the military or Coast Guard, as well as veterans who previously served. The biggest benefit of a VA loan is the 0% down payment requirement, which may allow you to invest in a property with $0 down. To qualify for a VA loan, you will need to seek documentation of your service from your local Veterans Affairs office. 


USDA mortgage loans were created to promote homeownership in rural areas. Like a VA loan, USDA loans come with 0% required down payments for qualifying buyers. However, USDA loans have some of the strictest qualification criteria of any government-backed loan. You will need to meet income limitations related to your local area and household size to qualify, and your home must be located in a rural area as defined by the USDA

Closing Assistance Programs

In addition to down payment and closing cost assistance available through the North Carolina Housing Finance Agency, the town or borough that you’re moving to may also have financial help you can access. For example, if you’re soon to become a resident of Greensboro and you demonstrate financial need, you could qualify for up to $15,000 in help with your down payment and closing costs. Explore your new hometown online to learn more about specific programs you may qualify for. 

What are the Mortgage Rates in North Carolina?

Each mortgage payment that you make contains two parts: a principal payment toward your loan balance and interest that goes to your lender. Interest rates in North Carolina are constantly changing based on factors like the real estate market and federal bond rates.

Buying Your First Home in North Carolina

Buying a home is a major commitment, so be sure that you’re in the right financial space and market to do so before applying for pre-approval. Government-backed mortgage loans may allow you to buy a home with as little as 0% down and a credit score as low as 500 but come with other qualifications you will need to meet. Connecting with the right real estate agent and mortgage lender ahead of the buying process empowers you with the team you need to take on your first home purchase.

Find out which loan programs might be right for you by contacting NAF today. A Loan Officer will be happy to answer any questions you have and help you achieve your dream of homeownership.  

North Carolina First-Time Homebuyer FAQs

Is There an Income Limit for First-Time Homebuyers in North Carolina?

No, there is no state limit that dictates who can purchase their first home. First-time homebuyer assistance programs and government-backed loans may have limitations on income relative to your local area. 

Can a Person With Low Income buy a house in North Carolina?

Yes, it’s possible for a person with low income to buy a home in North Carolina. North Carolina offers a series of down payment assistance programs on both the state and local level that low-income residents may more easily qualify for. Government-backed mortgage loans can be an option for individuals whose ongoing expenses make up a larger percentage of their overall income or who have lower credit scores. 

How Much Does a First-Time Buyer Have to put Down in North Carolina?

Depending on the type of loan that you choose, you will usually need to put down between 3% to 3.5% when buying your first home. These are the minimum down payments for Conventional and FHA loans respectively, which are commonly used by first-time buyers. If you qualify for a USDA or VA loan, you could be able to buy a home with $0 down. 

Does North Carolina Have First-Time Buyers Programs?

Yes, North Carolina offers two first-time buyers programs issued through the North Carolina Housing Finance Agency. These programs may allow you to access more competitive mortgage rates and up to $15,000 in down payment and closing cost assistance. 

Do you Have to pay Back Down Payment Assistance in North Carolina?

For the NC Home Advantage Mortgage and the 1st Home Advantage Down Payment program, the assistance provided does not need to be paid back immediately. Instead, these second mortgages become due only when you sell your home or refinance your loan, offering a flexible and manageable approach to repaying the assistance. Other programs vary in repayment terms, so review the specific program you’re interested in to learn more about the specifics of repaying the loan.


* NAF Homes, Inc. is an affiliate of New American Funding and does not originate mortgage loans or issue loan commitments.  NAF Homes, Inc. is a MI Real Estate Broker #6505431109, Tel. 844-626-1300.

NMLS #6606. Terms and Conditions Apply.  This is not a loan commitment or guarantee of any kind. Loan approval and rate are dependent upon borrower credit, collateral, financial history, and program availability at time of origination. Rates and terms are subject to change without notice.  All mortgage loan products are subject to credit and property approval.  © New American Funding, LLC. New American and New American Funding are registered trademarks of New American Funding, LLC. All Rights Reserved. Corp Office 14511 Myford Rd, Ste 100, Tustin, CA 92780. Ph 800-450-2010.

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