By Grant Edrington – Updated April 3, 2023
If you’re preparing to buy your first home in Ohio, you may be daunted by the cost. The average home purchase price in Ohio increased by almost 7% in 2022, with the median household income standing at $58,116 in 2023.
While Ohio isn’t the least affordable state for homebuyers, homeownership can still seem out of reach for many of the state’s low- and moderate-income earners. Thankfully, entities like the Ohio Housing Finance Agency are providing solutions in the form of special loan and down payment assistance programs.
See how Ohio – and several of its cities and counties – are coming to the aid of first-time homebuyers who want to purchase a residence in the state.
Shopping for your first home in another state? Check out our full first-time homebuyer program guide here.
First Time Home Buyer Requirements in Ohio
Ohio deems anyone who has not had full or partial ownership of a primary residence within the last three years a first-time homebuyer, making it easier to qualify for first-time home buying assistance than many think.
Most programs have several first-time home buyer requirements for Ohio residents. Those purchasing their first home must:
- Have a minimum credit score of 640 (or 650 for FHA loans).
- Complete homeownership education before closing.
- Meet their loan’s required debt-to-income ratio.
Another qualification first-time homebuyers in Ohio should meet is a specified income limit, but this varies based on your household size and the location of the home you want to purchase.
2023 Ohio Home Buyer Statistics
Statistics can provide valuable insights into the housing market, helping you plan your homebuying approach. Here’s a closer look at recent Ohio housing market conditions:
- January 2023 saw a decrease of 25.3% year-over-year in home sales, due at least in-part to dwindling affordability.
- The average home purchase price in January 2023 was almost $235,000, a 3.2% increase from the previous year.
- This means the average 3% down payment was roughly $7,050.
- Ohio’s median household income in 2021 (the most recent data available at the time of writing) was $62,689.
Ohio Housing Finance Agency Homebuyer Programs
The Ohio Housing Financing Agency (OHFA) works with lenders statewide to offer 30-year, fixed-rate government loans (conventional, FHA, VA, and USDA-RD) with more accessible income and purchase price limits. These loans are designed with low- and moderate-income homebuyers in mind. Homebuyers that qualify for an OHFA loan may also be eligible for one of their other homebuying assistance programs, which can be combined with OHFA loans.
If you qualify for an OHFA loan or program, you must complete a free homebuyer education course after submitting your loan application. Homebuyers who qualify will also have access to free homeowner resources through the Power of Home program from Framework®.
YourChoice! Down Payment Assistance
The Your Choice! Down Payment Assistance program offers funds to cover closing costs, down payments, and other pre-closing homebuying expenses. You can choose to receive either 2.5% or 5% of your home’s purchase price in assistance. The loan is forgiven after seven years of living in the home, meaning you won’t have to repay it unless you move before that time is up.
Do you make a difference through public service? Veterans, active military personnel, law enforcement officers, healthcare workers, firefighters, teachers, and school officials may be eligible for the Ohio Heroes home loan program.
Ohio Heroes provides a discounted interest rate on your mortgage – roughly a quarter of a percentage point lower than current rates, according to Ohio’s Department of Veterans Services. This home loan can be combined with down payment assistance options.
OHFA’s Mortgage Tax Credit
OHFA’s Mortgage Tax Credit program allows homebuyers to claim a federal tax credit on their mortgage interest for up to $2,000 per year. This credit is in addition to the IRS’s standard home mortgage interest deduction.
Homebuyers with an OHFA home loan can receive a credit of up to 40% of their mortgage interest through the Mortgage Tax Credit Plus program. If you don’t have an OHFA loan, you may qualify for the Mortgage Tax Credit Basic program, which offers a credit for up to 30% of your mortgage interest and doesn’t have credit score or education requirements.
Grants for Grads
If you’ve graduated from an accredited college or university in the past four years, Grants for Grads can help reduce your homebuying costs. The program offers a discounted mortgage interest rate and up to 5% of your home’s purchase price in down payment assistance. The down payment assistance is completely forgiven after five years of residence in Ohio.
Mortgage and Down Payment Assistance Programs in Cleveland, Cincinnati, and Other Ohio Cities
The state government isn’t the only entity taking initiative to help first-time homebuyers in Ohio. Several cities throughout the state are pitching in to make homeownership a reality for even more people.
City of Cincinnati’s American Dream Down Payment Initiative
Planning to buy in Cincinnati? If you’re purchasing a home within city limits, you may be eligible for the city’s American Dream Down Payment Initiative, which offers up to $14,000 in assistance. To qualify, first-time homebuyers must make 80% or less of the area’s median income. If you qualify, you’ll receive a five-year, zero-interest deferred loan, which will be forgiven after you’ve lived in the home for five years.
Cuyahoga County’s Down Payment Assistance Program
The Cuyahoga County Down Payment Assistance program offers up to 10% of the home’s purchase price (or $16,600) in assistance for local first-time homebuyers. To qualify, you must purchase and live in a single-family home located in one of 51 designated communities. Your income shouldn’t exceed 80% of the area median, and you must complete homeownership education courses.
Other Programs Throughout Ohio
Cincinnati and Cuyahoga County also offer assistance for first-time homebuyers. Consider researching programs where you’d like to live to see what opportunities the area offers. Here are a few examples of other local homebuying assistance programs in Ohio:
- Columbus’s American Dream Down Payment Initiative Program
- Dayton’s Down Payment Assistance Program
- Dayton’s Northwest Neighborhoods Down Payment Assistance Program
- Kettering’s Down Payment Assistance Program
- Toledo’s Home at Last Down Payment Assistance Program
Take the First Step Towards Homeownership with Divvy
Though the above programs can be helpful, they may not fit the needs of every first-time homebuyer. Still working on improving your credit or don’t meet the income requirements? Then say hello to Divvy.
Divvy is a one-of-a-kind rent-to-own program that helps you build savings for a down payment while living in the home of your dreams. You can choose an existing Divvy-ready home to call your own or pick one for sale on the market (as long as it meets our quality standards and your budget range).
Our unique approach allows us to offer more accessible income and credit score requirements, and your savings are your own. If you don’t want to purchase your Divvy home at the end of the term, you can take your savings (minus any relisting fees or damage-related costs) with you.
If you have a credit score of at least 550, a monthly household income of at least $2,500, a debt-to-income ratio under 50%, and at least three months of employment income history, you could be a good fit for Divvy. Learn how it works and browse our homes in Cleveland and Cincinnati to get started.
Note: Divvy is not affiliated with the first-time homebuyer programs mentioned in this article. Be aware that requirements for these programs may change. We recommend consulting with a lender or real estate agent when evaluating first-time home buyer programs.
Ohio First-Time Home Buyer FAQs
Do first-time home buyers need a down payment in Ohio?
Generally, you do need a down payment to buy a home in Ohio. However, you may be eligible for one of several down payment assistance programs. Many of them are forgivable, but they may require you to put a small amount of your own money toward the home.
What benefits do first-time home buyers get in Ohio?
First-time homebuyers in Ohio have lots of options to choose from when it comes to homebuyer assistance programs. Those who earned a college degree in the past four years or who work as a public servant have access to additional savings. You might also qualify for a tax credit on a portion of your mortgage interest that reduces your federal tax liability by up to $2,000 per year.
What credit score do I need to buy a home in Ohio?
Most homebuying assistance programs require a minimum credit score of 640, though this varies by program and loan type. If your credit isn’t quite there yet, Divvy is willing to help most homebuyers with a credit score of 550 or higher.
- Ohio REALTORS (https://www.ohiorealtors.org/blog/1735/activity-in-the-ohio-housing-market-cools-in-2022/)
- Ohio REALTORS (https://www.ohiorealtors.org/home-sales-news-release/)
- World Population Review: Median Household Income by State 2023 (https://worldpopulationreview.com/state-rankings/median-household-income-by-state)
- FRED Economic Data (https://fred.stlouisfed.org/series/MEHOINUSOHA646N#0)
- Ohio Housing Finance Agency (https://myohiohome.org/index.aspx)
- Ohio Housing Finance Agency (https://myohiohome.org/homebuyereducation.aspx)
- Ohio Housing Finance Agency – Down Payment Assistance (https://myohiohome.org/downpaymentassistance.aspx)
- Ohio Housing Finance Agency – Ohio Heroes (https://myohiohome.org/ohioheroes.aspx)
- Ohio Department of Veterans Services (https://dvs.ohio.gov/veteran-benefits/benefits-resources/home-loans)
- Ohio Housing Finance Agency – Mortgage Tax Credit (https://myohiohome.org/mortgagetaxcredit.aspx)
- Ohio Housing Finance Agency – Grants for Grads (https://myohiohome.org/grantsforgrads.aspx)
- City of Cincinnati Community & Economic Development – The American Dream Down Payment Initiative (https://choosecincy.com/homeowner-renter-assistance/american-dream-down-payment-initiative-addi/)
- CHN Housing Capital – Cuyahoga County Down Payment Assistance Program (https://chnhousingcapital.org/dpa/cuyahoga-county-down-payment-assistance-program/)
Grant is a member of the marketing team and focuses on connecting aspiring homeowners in our metros with Divvy. He's worked on marketing teams spanning all parts of the homeownership journey, including home loans, power tools and home improvement, siding and flooring, and now Divvy. Grant graduated from Villanova University and became a homeowner in 2021.