Alabama first-time home buyer programs
Alabama Housing Finance Authority lists 3 programs that help buyers in Alabama with the down payment or closing costs. Amounts and terms are shown as the agency publishes them.
- Programs from the agency
- 3
- Biggest amount listed
- $10,000
- First-time buyers only
- 1 of 3 programs
- Income caps
- 80% of area median or $172,800
Down payment assistance programs in Alabama
| Program | Amount | Grant or loan | Income limit | First-time buyers only |
|---|---|---|---|---|
| Step Up. With a 30-year fixed-rate FHA, VA, USDA or HFA Advantage conventional first mortgage through a participating lender; credit score 640+; homebuyer course. | Up to 4% of the price, at most $10,000 | Repayable loan: 10-year second mortgage, paid each month along with your main home loan. | Household income must be $172,800 or less, whatever your household size or where you live. | No |
| First Step Mortgage Revenue Bonds (down payment assistance). With an AHFA First Step 30-year fixed-rate FHA, VA, USDA or Freddie Mac HFA Advantage conventional loan. | Up to 4% of the price, at most $10,000 | Repayable loan: 10-year second mortgage, paid each month along with your main home loan. | Varies by county and household size, up to $161,140 Agency income chart | Yes, but repeat buyers qualify in targeted areas |
| Affordable Income Subsidy Grant. With an AHFA HFA Advantage conventional loan; credit score 640+; homebuyer course. | Up to $2,500 | Grant | 80% of the area median income (AMI), using Freddie Mac's county limits. | No |
Usually, "first-time buyers only" means you haven't owned a home during the past three years, though every program sets a rule of its own. The name of each program links to a Alabama Housing Finance Authority page that says whether applications are open right now. The agency also maintains its own list of participating lenders. Compare down payment assistance programs across all states, or ask a lender that works with Alabama's programs.
How do you repay Alabama's programs?
- Repayable loan: a small second mortgage you pay back monthly, usually along with your first mortgage payment.
- Grant: money you never pay back, used for the down payment or closing costs.
How does your income compare with Alabama's caps?
Every program has its own income cap, which the table shows, and the exact chart is on that program's agency page. Use the HUD income limits lookup (FY2026) to find the figure for your county and household size. If a program relies on its own county chart or Freddie Mac's, the result can differ from HUD's number, and the agency's chart decides.
| HUD area | Median family income | HUD low-income limit |
|---|---|---|
| Birmingham-Hoover | $104,100 | $83,300 |
| Montgomery | $88,800 | $71,050 |
| Huntsville | $115,100 | $92,100 |
| Florence-Muscle Shoals | $95,900 | $72,450 |
| Tuscaloosa | $93,000 | $74,400 |
HUD uses about 80% of the median as a starting point. Its own caps can hold that number down, including a yearly cap on increases, so the low-income limit is under 80% in a few areas.
Talk to a lender that works with Alabama programs
These programs are paid out through the agency's approved lenders, so the lender is your next step. Tell us where you're buying and a lender that works with Alabama's programs can explain which ones fit you.
Rather not call? Send your details and the lender will reach you.
Are you buying near a state border?
Florida, Georgia, Mississippi, Tennessee or programs for all 50 states plus DC.