North Carolina Has a $15,000 Forgivable Loan for First-Time Buyers and Veterans — Here's How It Works

Hey friends. I want to tell you about a program that more buyers in North Carolina need to know about. I use this program regularly to get clients into homes with zero money out of pocket. If you are a first-time buyer or a veteran, read every word of this.

What the Program Is

The North Carolina Housing Finance Agency offers the NC 1st Home Advantage Down Payment program. It provides a $15,000 forgivable loan that can be used for your down payment and closing costs. Zero interest. No monthly payment. And in many cases, you never pay it back.

This is not a grant. It is a second mortgage that is forgiven over time. But for most buyers who plan to stay in their home, it functions like free money.

Who Qualifies

First-time home buyers are eligible. The NCHFA defines first-time buyer as someone who has not owned a primary residence in the past three years.

Veterans are also eligible regardless of first-time buyer status. If you served, this program is available to you whether you have owned before or not.

Key requirements:

• Minimum 640 credit score (660 for manufactured homes)
• Must purchase in North Carolina and occupy the home as your primary residence within 60 days of closing
• Must use a 30-year fixed-rate mortgage through the NC Home Advantage Mortgage program (FHA, VA, USDA, or conventional all qualify)
• Purchase price must be at or below $525,000
• Income limits apply based on county and household size

Income Limits

Income limits are based on the county you are buying in and how many people live in the home. Children count toward household size. For example, a household of three or more people in Wake, Franklin, or Johnston County has an income limit of approximately $152,000.

One important detail that catches people off guard: the income of all people on the deed is counted, not just the person on the mortgage. If two people are on the deed, both incomes are included even if only one person is on the loan.

How the Forgiveness Works

The $15,000 loan carries zero interest and requires no monthly payment while you live in the home as your primary residence. Here is the forgiveness schedule:

• You sell or refinance within 7 years: you repay the full balance
• You sell between years 8 and 10: you still repay the full balance
• Years 11 through 15: the loan is forgiven 20% per year
• After 15 years: fully forgiven, you owe nothing

For most buyers who plan to stay in their home long term, this is effectively a gift.

Real World Examples

Here is how I use this program to get buyers to the closing table with zero out of pocket.

Example one, conventional loan:

• $350,000 purchase price
• 3% down conventional loan
• Total cash needed to close: approximately $19,500
• Use $15,000 from the program and negotiate $4,500 in seller concessions
• Buyer owes nothing at closing and gets their due diligence and earnest money back

Example two, VA loan:

• $350,000 purchase price
• 0% down VA loan
• Total cash needed to close: approximately $9,500
• Use $15,000 from the program, which covers all closing costs and leaves money available
• Apply any remaining funds toward reducing the loan balance and lowering the monthly payment

Even If You Have the Money, Use the Program

This is the part most people miss. Even if you have enough saved for your down payment and closing costs, this program is still worth using. The $15,000 frees up cash for moving costs, furniture, repairs, or just keeps your savings intact. I have clients putting down 20 to 30 percent who are still taking this money because once you close, you cannot go back and use it. If you qualify, there is no reason to leave it on the table.

How to Get Started

The NC 1st Home Advantage Down Payment program requires you to work with an NCHFA-approved lender and use the NC Home Advantage Mortgage. Not every lender participates and not every lender knows how to structure these deals correctly.

If you want to use this program on your purchase in the Triangle, reach out. I work with approved lenders who know this program and know how to pair it with your specific loan type to get you the most benefit.