AHFA Makes Homeownership Affordable

Do you dream of owning a home? Think you cannot afford it? Since 1980, AHFA's versatile, affordable programs have helped more than 70,000 families purchase a home. 

Our programs help people all over the state – so whether you want to buy a home at the beach or in the mountains, in the city or in a rural area – AHFA’s two homebuying programs can make it happen!

Step Up

Step Up is a homeownership program designed specifically for moderate-income home buyers who can afford a mortgage, but need help with the down payment. The program offers a competitive 30-year fixed interest rate and a down payment assistance option.

The down payment funds are secured by a 10-year second mortgage and are combined with a 30-year, fixed-rate first mortgage. 

You are eligible for the Step Up program if earn less than $97,300 (regardless of household size or location) and meet certain standards for creditworthiness.

Mortgage Credit Certificates

The Mortgage Credit Certificate (MCC) program gives homebuyers another savings option. An MCC reduces the amount of federal income tax homebuyers must pay, which in turn frees up income to qualify for a mortgage. You can claim a tax credit up to 50 percent of the mortgage interest paid per year, capped at $2,000 annually. 

To receive immediate savings from the MCC, you must file a revised W-4 withholding form with their employer, which should reduce your yearly tax contribution and increase your take-home pay. You could also choose to realize the savings once a year through the federal income tax return to be filed.

MCCs are available with conventional fixed-rate, FHA, VA, Rural Development and privately insured mortgages. They may also be paired with AHFA's Step Up program for even greater buying power!

How does the MCC program work?

A Mortgage Credit Certificate (MCC) reduces the amount of federal income tax homebuyers must pay, which in turn frees up income to qualify for a mortgage. Borrowers can claim a tax credit up to 50 percent of the mortgage interest paid per yer, capped at $2,000 annually. It is a dollar-for-dollar reduction against a borrower's federal tax liability. To receive immediate savings from the MCC, the borrower must file a revised W-4 with-holding form with their employer, which should reduce the yearly tax contribution and increase the borrower's take-home pay. Borrowers can also choose to realize the savings once a year through the federal income tax return to be filed.

Mortgage credit rates are based on the loan amount:

20% MCC for loans of $150,001 or greater: no cap; 0% MCC for loans of $100,001 to 150,000: $2,000/year cap; 50% MCC for loans of $100,000 or less: $2,000/year cap.

Am I Eligible?

Step Up Eligibility

  • You must buy a new or existing home. Refinancing an existing mortgage does not qualify.
  • You must buy a home in Alabama and occupy it, as your primary residence, within 60 days of closing
  • Your annual household income cannot exceed $97,300
  • You must apply for an FHA or conventional loan through a participating lender
  • Your credit score must be 620 or higher
  • You must complete a homeownership education course

Mortgage Credit Certificate Eligibility

  • You must be a first-time homebuyer (or have not owned a home in the last three years)
  • If the home you are purchasing is located in a "target" area, other conditions may apply.
  • Contact your lender for more information.
  • You must buy a new or existing home. Refinancing an existing mortgage does not qualify.
  • You must buy a home in Alabama and occupy it, as your primary residence, within 60 days of closing
  • You must meet federally established income and sales price limits
  • You must apply for an amortizing loan through a participating lender
  • AHFA reviews and approves requests for an MCC prior to the closing of the loan

How Do I Apply?

AHFA does not offer mortgage loans directly to homebuyers. We work with a select network of lenders across Alabama who will help you learn more about our programs. They'll also walk you through every step of the home buying loan qualification process.

Find a participating lender in your area: