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What is 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 down payment funds are secured by a 10-year second mortgage and are combined with a 30-year, fixed-rate first mortgage. Since the loans are serviced by ServiSolutions, a division of AHFA, homeowners have only one check to write each month. Program participants must complete a homebuyer education course to qualify.

Program Income Limit:

  • Participants who earn $130,600 or less are eligible for the FHA Step Up program, regardless of household size or location.
  • Participants who earn 80 percent or less of the Area Median Income (AMI) for property location OR $130,600 (whichever is less) are eligible for Conventional Step Up (HFA Advantage).
  • Participants who earn over 80 percent of the Area Median Income (AMI) for property location but less than $130,600 are eligible for Freddie Mac Advantage Loan Product.

Additional Information and Qualifications:

  • HFA Advantage conventional or FHA loans only
  • Amount of assistance:
    • FHA loans: 3.5% of the sales price up to $7,500
    • Conventional loans: 3% of the sales price up to $7,500
  • For new or existing homes in Alabama
  • Minimum credit requirements
    • For FHA/HFA Advantage 80% or less of the AMI: 640
    • For HFA Advantage over 80% of the AMI, but less than $130,600: 680
  • Debt to income ratio must be 45% or lower
  • Homebuyers must complete a homeownership education course
  • Must apply for loan through a participating lender