The down payment assistance programs that are listed here are a sample of what is available for homebuyers in Alabama. This can be your starting point as you search for the right program for your family. Home Purchase and Refinance Loans

FHA Loan Programs for 2024

The most recognized 3.5% down payment mortgage in the country. Affordable payments w/good credit.

Are You Watching Your Credit Score?

- Improving Your Credit Score Has Never Been More Important - is a privately owned website, is not a government agency, and does not make loans.
FHA Home Loans

Choose a Loan Type is a privately owned website, is not a government agency, and does not make loans.

Affordable Income Subsidy Grant

Financial Assistance for Homebuyers in Alabama

Making a down payment is not the only upfront cost that homebuyers need to consider with a mortgage. They also need to pay closing costs before moving into their new home. In addition to the down payment assistance offered through Step Up, the Alabama Housing Finance Authority provides eligible borrowers closing cost assistance with a grant, called the Affordable Income Subsidy Grant.  

Available Assistance 
The Affordable Income Subsidy Grant is available to applicants that fall within the program’s income limits. Borrowers at or below 50% of the AMI limits as published by Freddie Mac are eligible for a grant of 1% of the loan amount. Others who are at or below 80% of the AMI can receive a grant of 1.5%. 

Eligibility Requirements 
In addition to the program’s income requirements, the Affordable Income Subsidy Grant has other guidelines that must be satisfied by all applicants. While the program funds can be used to purchase new or existing property types, they must be paired with HFA Advantage conventional loans only. Applicants must have a credit score of 640 or higher, and their debt-to-income ratio must be 45% or lower. They are also required to complete a homeownership education course and apply for a loan through a participating lender  

As with Step Up, this closing cost assistance can be combined with a Mortgage Credit Certificate to make buying a home even more affordable. 


*Seller-funded down payment programs were eliminated in the Housing and Economic Recovery Act of 2008, but states and local government agencies are still permitted to help borrowers finance their homes with second mortgages and grants. These agencies set different requirements that a borrower needs to meet in order to qualify for the grant programs, such as property location, and purchase price, and income limits. 

Note: All figures mentioned above were accurate at the time of publication and may no longer be current. Visit the program website for updated information. 

Down payment assistance programs and/or grants were researched by the team at Please note that all programs listed on this website may involve a second mortgage with payments that are forgiven, deferred, or subsidized in some manner until resale of the mortgaged property.'s compilation is not a complete list, but it can serve as a starting point in your search for the down payment assistance program or grant for your situation. It is up to the consumer to contact these entities and find out the specifics of each program.

Down Payment Grants in Alabama

Alabama Housing Finance Authority's Affordable Income Subsidy Grant is available to applicants that fall within the program’s income limits. 

Step Up helps low- to moderate-income applicants achieve their homeownership goals, by providing down payment assistance. The funds are made available in the form of a 10-year second mortgage and are combined with a 30-year, fixed-rate first mortgage.

Mobile, Alabama's Homeownership Down Payment Assistance Program (HOME DPA) is a flexible gap financing program that helps to provide opportunities for first-time homebuyers to purchase homes that are safe, decent, and affordable.

The Mobile County Down Payment Assistance Program provides income-eligible applicants assistance funds between $1,000 and $10,000 in the form of a grant. This money may be put toward the down payment and closing costs associated with the mortgage transaction.

Do you know what's on your credit report?

Learn what your score means.