Buying a home is exciting, but when it’s your first home, the experience can be a bit intimidating. If you’re searching for a new home in the Raleigh area, explore the financing assistance for first-time homebuyers in NC.

Whether you’re looking for help with a down payment or a low-interest home loan—or both—there are programs that can simplify your path to homeownership in North Carolina.

Why are these programs available? Converting renters to homebuyers is a boost to the economy. Homeowners pay taxes, of course, but they add long-term residents to the population, building communities of people who support local schools and businesses.

What You’ll Learn in this Blog:

• The most common home loan programs in North Carolina (Conventional, FHA, VA, USDA, and Jumbo loans) and how they compare

• How FHA loans in NC help buyers with lower credit scores and smaller down payments

• The benefits of VA home loans for veterans, service members, and surviving spouses

• Who qualifies for USDA rural development loans and their zero-down advantages

• How to access down payment assistance in North Carolina—up to $15,000 for first-time buyers

• Rules and eligibility for the NC 1st Home Advantage Down Payment program

• Ways to use down payment assistance for closing costs and reduce upfront expenses

• How a rate buydown can lower your interest rate and save you money long-term

• Why choosing New Home Inc. means more value, smart home features, and buyer-focused design

Home loan programs in North Carolina

There are so many home loan options for buyers. Before you talk to lenders, review the types of mortgages to choose from. Compare the features to your financial needs. With this basic information, you’ll have a better idea of what to ask lenders.

For starters, common home mortgages include:

• Conventional loans, with options for fixed or adjustable rates
• Federal Housing Authority (FHA) loans, with loan down payment and less restrictive credit requirements
• Veterans Affairs (VA) home loans, offering no down payment for veterans and surviving spouses
• S. Department of Agriculture loans, for rural areas
• Jumbo loans, for homes priced above the conforming loan limit (currently $806,500), set by the Federal Housing Finance Agency (FHFA)

Each home loan program offers its own requirements and benefits. Shop around and talk to different lenders to explore your options and determine the right fit for your financial situation.

If you’ve never purchased a home before, learn about the government-backed mortgage programs that offer valuable benefits.

FHA Home Loan

FHA loans in NC present a good option for many homebuyers. If you’re a first-time homebuyer who doesn’t have a great credit score and/or hasn’t saved up a large down payment, you should consider the FHA home loan.

With a credit score of 580, some lenders will not qualify you for a home loan. With the FHA loans in NC, you not only qualify, but you only need to provide a down payment of 3.5% with a minimum 580 credit score. Of course, as with any loan, there are other qualifications, like your loan repayment history. With a credit score between 500 and 579, you might still be able to be approved for an FHA home loan, but your minimum down payment must be 10% of the purchase price.

In addition, if putting less than 20% down, the FHA home loan requires that you pay for a mortgage insurance premium (MIP), which is included in your monthly mortgage payment. The MIP varies, and the annual cost is between 0.15% and 0.75% of your loan. This fee protects the lender in cases like these, when you haven’t invested enough in the purchase. If you default on the mortgage, the MIP compensates the lender.

VA Home Loan

The Department of Veterans Affairs makes it affordable for veterans, current servicemembers, and surviving spouses to buy a home. VA home loans reward service members with a wealth of benefits:

• No minimum credit score, although you must be income-qualified
• No down payment, as long as the home you’re purchasing appraises at least for the sale price
• Competitive interest rates, compared to private banks, mortgage companies, and other lenders
• Reduced closing costs, or potentially none at all
• No private mortgage insurance (PMI), which is usually required when your down payment equals less than 20% of the loan amount

Your service to our country is valued, and the VA home loan is one way to show appreciation.

USDA Home Loan

The USDA Rural Development Single-Family Home Loan program serves some areas outside of Raleigh, but you don’t have to buy a home far out in the country for it to be considered “rural”. You can look on the USDA’s website to determine if a home is located within the geographic area.

The current interest rate for this loan is 5.125%, with zero down payment, and up to 33 years to repay the loan. The USDA Single-Family Home Loan does have limits for income and the loan amount. But if you qualify, it’s a great way to become a homeowner!

Down payment assistant in North Carolina

Maybe you’ve been good with managing your credit and have earned a great score. Instead, you’re looking for financing assistance for first-time homebuyers in NC in the form of help with the down payment, a common challenge when you don’t already have equity in a home.

In North Carolina, you might be able to secure up to $15,000 to be used as a down payment. And never have to repay it!

The North Carolina Housing Finance Agency (NCHFA) offers down payment assistance (DPA) of up to $15,000, through the NC 1st Home Advantage Down Payment and the NC Home Advantage Mortgage. The NCHFA’s program is available for first-time homebuyers and military veterans who meet the eligibility requirements to purchase a single-family home or townhome in North Carolina. You need to meet the following criteria for down payment assistance:

• You have a minimum credit score of 640.
• Your annual income is $132,000 or less, to meet the income limit.
• You haven’t owned a home as your principal residence in the past three years.
• The home’s purchase price does not exceed $495,000.
• You’re a legal resident of the U.S.
• The home will be your primary residence.

If you qualify for the NC 1st Home Down Payment program from the NCHFA and you plan to stay in your home for 15 years or more, you might not have to repay the down payment loan. At year 11 of your loan, 20% of the down payment assistance is forgiven. That reduction continues for the next four years. So, at the end of 15 years, your down payment loan is forgiven completely! Conversely, if you sell or refinance your home before the end of 15 years, you’ll be required to repay the debt.

Either way, down payment assistance through the NCHFA could be exactly what you need to move into homeownership sooner.

Use DPA for closing costs

Closing costs are the fees paid by the buyer at the purchase transaction, known as the closing, when you sign the documents that transfer ownership to you, the buyer. At closing, you’ll pay the down payment, along with other fees. Luckily, you can also apply the down payment assistance toward your closing costs.

Closing costs in North Carolina typically range from 2% to 5% of the purchase price. For a $450,000 home, that could be $9,000 to $22,500. Talk to your real estate agent and lender for a more accurate estimate of closing costs in the specific area where you plan to buy a home in Raleigh or the surrounding areas.

On closing day, you’ll pay costs that include:

• Appraisal of the home
• Home inspection
• Loan origination
• Underwriting
• Title search
• Title insurance
• Property tax
• Attorney
• Realtor/sales agent commission
• Discount points, if you opted for them

Some closing costs are fixed—like property taxes—while others can be negotiated (e.g., loan origination, underwriting, commission). You should shop around and ask title companies for their fee schedule.

Save more with a rate buydown

A rate buydown saves you money by lowering your interest rate. You can purchase discount points to use at closing. Each discount point costs 1% of the loan amount and reduces your rate by 0.25%. That might not sound like much to a first-time homebuyer, but the savings add up over the years.

New Home Inc. is offering to pay up to $25,000 for your rate buydown, as low as 4.99% for the entire term of the 30-year, fixed rate government loan (e.g., FHA). We cover the cost and you reap the reward.

You can qualify for the rate buydown when you purchase one of our quick move-in homes and have a 660 minimum credit score. Contact our New Homes Specialist for details.

New Home Inc. welcomes first-time homebuyers

At one point, every homebuyer is making the move for the first time. New Home Inc. is experienced with guiding new homebuyers through the process, one simple step at a time. We’ll listen to your ideas, learn about what you want and don’t want, discuss options, and then start looking at homes. You have options for buying your new home from New Home Inc.:

1. Choose the lot and floor plan and let us build your home, with you choosing every detail and personalizing your new home, inside and out; or
2. Select one of our quick move-in homes, which are brand new construction and either completed or underway; depending on the phase of construction, you might have the option to make some interior choices, like wall color and fixtures.

We’re building communities of single-family homes and townhomes in popular Raleigh suburbs, like Clayton, Fuquay-Varina, Lillington, and Willow Spring.

Our new homes for sale near Raleigh, NC, give you great value, like large yards! It’s not affordable for many first-time homebuyers to purchase a home with a half-acre or more in Raleigh, but we’re developing communities with homesites as large as three acres not far from the city!

New Home Inc. is dedicated to giving our homebuyers the best value possible. We’ve expanded our standard features so that you’re not paying for upgrades that, quite frankly, should be part of your home:

• Our award-winning, innovative Smart Door Delivery Center is a fully enclosed space between your interior and exterior front doors. It’s protected with a smart lock. You provide the authorized code, the delivery person leaves your package inside the protected area, and the door automatically relocks.
• We include a smart home automation package to add safety, security, comfort, and energy efficiency.
• The kitchen is designed with an oversized island that has seating on three sides, providing more workspace and serving area.
• New Home Inc.’s kitchens are also thoughtfully outfitted with a service pantry that we call a “messy kitchen”. Separate from the storage pantry, the messy kitchen adds valuable functions, like storing small appliances and extra serving ware, cleanup help with an additional sink and dishwasher, and a snack or beverage station, complete with mini-fridge. Our homebuyers love this feature!
• Our floor plans allow for a pocket office off the kitchen. Some owners use it as an office, and others like the space for a homework station, yoga or fitness studio, library, man cave, or hobby room.
• You can choose the configuration of your owner’s bath shower, with three options to get the spa experience you want.
• If you have an electric vehicle, you’ll appreciate having a charging station already roughed into the walls of your garage. It’s quick and easy to activate, so you can charge your EV at home.
• Our homes include a whole home air filtration system that improves the indoor air quality, removing tiny particles, like dust, allergens, and pollutants.
• Energy efficiency is built into every home, because we adhere to the high standards of ecoSelect, which certifies your home conserves energy.
• A clutter-free drop zone in every single-family home and townhome is outfitted with a hall bench and cubbies, so your family has an organized place to stash coats, boots, shoes, backpacks, leashes, and all the other things that don’t need to find their way inside your home’s living space.
• If you choose a two-story plan, we can convert space under the stairs to a pet retreat. Give your furry family member a quiet place to escape to, with their favorite bed and toys.

We call this our “Future-Proof” approach to designing and building cutting edge homes that far exceed the quality and value of cookie-cutter tract homes.

Whether you’re buying your first home or have been through the experience, New Home Inc. invites you to explore the way we’re building communities of new homes for sale near Raleigh. NC. We’d love to share our creativity, knowledge, and enjoyable homebuying process. Our homes include single-level ranches and multi-story homes in a variety of styles—Craftsman, Modern Farmhouse, Traditional, English Country, Coastal, Georgian,and French Country. Plans start at 1,800 square feet and can grow as large as you want!

Now that you understand what’s available for financing assistance for first-time homebuyers in NC, contact New Home Inc. to start on the right path to becoming a homeowner.