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First Step Mortgage Revenue Bonds

Nearly 50,000 Alabama households have benefitted from AHFA's First Step program, which offers below-market, 30-year fixed mortgage interest rates to first-time or repeat homebuyers.

How it Works:

  • All participating borrowers will benefit from special low mortgage interest rates offered through First Step on FHA, VA, USDA, and Freddie Mac’s HFA Advantage conventional loans.
  • All borrowers are eligible for down payment assistance up to $10,000 or 4% of the sales price, whichever is lower.
  • The down payment funds are secured by a 10-year second mortgage combined with the borrower’s 30-year, fixed-rate First Step mortgage.
  • Since the loans are serviced by ServiSolutions, a division of AHFA, homeowners have only one check to write each month.

Target/Non-Target Areas:

To determine if a property is located in a target or non-target area, search the property address using our Target Area Status Map below.

Data mapped by PolicyMap, an online GIS mapping tool.
  • In target areas, eligible borrowers can be first-time or repeat homebuyers. Target areas will be marked green on the Target Area Status Map.
  • In non-target areas, eligible borrowers must not have owned a home in the previous three years. Non-target areas will be marked gray on the Target Area Status Map.
  • If the property is located in an area marked orange on the Target Area Status Map, lenders must submit a Target Area ID Request Form to determine if the property is target or non-target. The form may be found on Lender Online and AllRegs. Completed forms should be sent to [email protected] for review.

Sales Price and Income Limits:

Borrowers must meet federally established sales price and income limits based on their area's median income.  

Additional Borrower Qualifications:

  • Meet standards for creditworthiness. 
  • Live in the property. It cannot be used for business, commercial, or rental purposes. 
  • Apply through an AHFA participating lender.

Frequently Asked Questions:

See the program FAQ's here

Stack the Savings:

AHFA's First Step loans are available with FHA, VA, USDA, and Freddie Mac HFA Advantage conventional loans. Borrowers who use Freddie Mac's HFA Advantage product may be eligible for an additional grant to help with closing costs - the Affordable Income Subsidy Grant. Both of these offers can be used on the purchase of new or existing homes to double the savings opportunities.