Ready to buy your first home in Raleigh but not sure how to cover the down payment or closing costs? You are not alone. Many first-time buyers in Wake County use assistance that lowers upfront cash, reduces monthly costs, or both. In this guide, you will learn the main programs available, how to check eligibility, common trade-offs, and a clear process to move forward with confidence. Let’s dive in.
Your main program options
North Carolina Housing Finance Agency (NCHFA)
NCHFA is the statewide hub many Raleigh buyers start with. Through participating lenders, NCHFA offers first-mortgage products, down payment help, and the Mortgage Credit Certificate (MCC) tax credit that can improve monthly affordability. You can review program basics and find participating lenders on the NCHFA homebuyer programs site.
Why it matters: NCHFA options are commonly used in Wake County and can often be paired with conventional, FHA, or VA loans, depending on the product and lender.
City and county assistance
Raleigh and Wake County may offer local assistance that uses federal funds. These programs can look like forgivable loans, deferred 0 percent loans, or one-time grants, and they open or pause based on funding. Check current availability with the City of Raleigh Housing and Neighborhoods department and Wake County housing services. Verify whether funds are active before you write an offer.
Federal loan programs that lower cash to close
- FHA loans: Lower down payment and flexible credit standards. Learn more at FHA loan basics from HUD.
- VA loans: Zero down for eligible service members and veterans. Details are on the VA home loan program.
- USDA loans: Zero down in eligible areas outside dense urban cores. Wake County has urbanized and non-urban areas, so eligibility is parcel specific. Start with USDA Single Family Housing programs.
These federal loans can sometimes be combined with state or local assistance, subject to program rules and lender approval.
Nonprofit, employer, and private assistance
Some nonprofits, community development organizations, and employers offer help for first-time buyers. Terms vary widely and may include matched savings or closing-cost grants. Confirm current offerings with local housing counseling agencies and your lender.
Mortgage Credit Certificate (MCC)
An MCC is a federal income tax credit administered by agencies like NCHFA. It lets you claim a percentage of your annual mortgage interest as a credit, often up to a capped amount per year. That credit reduces your federal tax liability, which can improve your monthly cash flow compared to the same mortgage without the credit. You must use a participating lender and file IRS Form 8396 each year.
Benefits and trade-offs
Common forms of assistance
- Forgivable grant or forgivable second: No monthly payment, and the balance can be forgiven after you meet owner-occupancy and time-in-home rules.
- Deferred 0 percent second mortgage: No monthly payment. The balance is typically due when you sell, refinance, or reach the end of the term.
- Repayable second mortgage: A set payment at a low or market rate that helps with down payment or closing costs.
- One-time grant for closing costs: Reduces cash needed at closing. Some programs add resale or occupancy rules.
- MCC tax credit: Lowers your federal tax liability each year you qualify, which can improve affordability without changing your interest rate.
What you gain
- Lower cash to close, sometimes to zero, depending on the loan type and assistance.
- Potential access to competitive interest rates through participating lenders.
- Flexibility to cover both down payment and closing costs in certain programs.
- Tax savings with an MCC that can enhance monthly affordability.
What to watch
- Income and purchase price limits set by program and county.
- Primary residence rules and minimum occupancy periods.
- Second liens that can affect future refinance or sale decisions.
- Lender participation, education requirements, and extra paperwork.
- Program compatibility, since not all assistance pairs with every loan type.
Eligibility basics in Wake County
Program rules change regularly, so always confirm details on the official pages listed in the Resources section. Last checked January 2026.
- First-time buyer definition: Often means you have not owned a home in the past three years. Programs may offer exceptions for certain buyers or targeted areas.
- Income limits: Based on household size and county area median income. Limits are updated and differ by program.
- Purchase price caps: Maximum sales price varies by county and property type.
- Primary residence: You must live in the home as your main residence.
- Credit and DTI: Lenders set minimum credit scores and debt-to-income limits. Some programs have additional requirements.
- Property types: Single-family homes, certain condos, and some townhomes are typical. Manufactured housing may have special rules.
- Homebuyer education: Many programs require an approved course before closing.
What to verify for each program in Raleigh and Wake County:
- Whether the program is statewide or local.
- Current income and price caps for Wake County.
- Whether assistance is forgivable, deferred, or repayable, and when repayment is triggered.
- Compatibility with FHA, VA, USDA, or conventional loans.
- The list of participating lenders and accepted homebuyer education providers.
- Required documents and the expected timeline for approval.
How to compare options: a checklist
Use this checklist to weigh your choices side by side.
- Type of help: Grant, forgivable loan, deferred 0 percent second, repayable second, or MCC.
- Cash to close: How much of your down payment and closing costs are covered.
- Monthly impact: Does the assistance or MCC change your monthly budget or taxes.
- Repayment trigger: What happens if you sell or refinance.
- Loan pairing: Which loan types are allowed with the assistance.
- Limits: Income, purchase price, and property type rules for Wake County.
- Credit and underwriting: Minimum score, DTI, reserves, and any program overlays.
- Fees and interest: Any admin fee, interest, or special program cost.
- Education and timing: Required counseling and how it fits your closing date.
- Lender access: Do you need a participating lender, and can your chosen lender participate.
- Resale or occupancy rules: Length of required occupancy and any recapture.
For more help comparing loans and costs, use the CFPB guide to comparing loan offers.
Three real-world paths, explained
Below are simple, non-numeric examples to show how options can play out. Details depend on your income, price range, and lender.
Scenario A: 5 percent deferred DPA plus a conventional loan
- Cash to close: Lower because the deferred second covers part of the down payment and possibly closing costs.
- Monthly payment: Based on the first mortgage only, since the second is deferred. You carry a second lien that could be due if you sell or refinance.
- Long-term trade-off: You will likely repay the deferred second later unless the program is forgivable.
Scenario B: MCC plus a conventional loan
- Cash to close: You still bring your down payment, but the MCC reduces your federal tax liability each year, which can ease monthly cash flow.
- Monthly payment: Based on the first mortgage. The MCC does not change your interest rate.
- Long-term trade-off: You keep the credit while eligible and you file IRS Form 8396 each year.
Scenario C: FHA loan at 3.5 percent down without DPA
- Cash to close: Lower than many conventional loans, but you still need funds for down payment and closing costs.
- Monthly payment: Includes FHA mortgage insurance. No second lien to manage.
- Long-term trade-off: You do not carry a second mortgage, but you miss out on potential grants or tax credits.
The application process and timeline
Using assistance can add steps and time. Plan your offer and closing date with that in mind.
- Learn the basics: Review state and local program pages and note education requirements.
- Get prequalified: Choose a lender that participates in the program you want to use. You can confirm participating lenders on the NCHFA site or local program pages.
- Complete homebuyer education: Many courses take 4 to 8 hours and must be completed before closing.
- Go under contract: Write a contract that allows enough time for the assistance approval and funding.
- Lender submits your file: Your lender sends income documents, your purchase contract, education certificate, and IDs to the program administrator.
- Conditional commitment: The program issues a conditional approval. This step can add 2 to 6 weeks.
- Underwriting and appraisal: Your first mortgage goes through standard underwriting and appraisal.
- Closing: The DPA is recorded, often as a second mortgage or a grant, and funds are applied per program rules.
- After closing: Keep occupancy records and any recapture or forgiveness timelines.
Common documents you may be asked for:
- Recent pay stubs, W-2s, or tax returns
- Bank statements and asset verification
- Government-issued photo ID and Social Security numbers
- Executed purchase contract and property details
- Homebuyer education certificate, if required
Funding reminder: Many local programs have limited funds. Ask about reservations and deadlines early in your search.
Local resources and links
Use the official pages below to confirm current rules and to find participating lenders or classes. Links verified January 2026.
- State programs and MCC: NCHFA homebuyer programs
- City programs and services: City of Raleigh Housing and Neighborhoods
- County services: Wake County housing services
- FHA program basics: U.S. Department of Housing and Urban Development
- USDA zero-down programs: USDA Single Family Housing programs
- VA zero-down program: VA home loan program
- Loan comparison tools: CFPB guide to comparing loan offers
How The Oxford Team supports you
Buying your first home is a big step, and the right plan matters. As your buyer representative, we help you focus your search in Raleigh and across Wake County, coordinate timelines with your chosen participating lender, and craft offers that respect program deadlines and funding windows. You get clear communication, local market insight, and a smooth, step-by-step path from prequalification to keys in hand.
If you are exploring new construction or resale, want a second opinion on neighborhoods, or need to align a move with a relocation timeline, we are here to help. Ready to map your path to first-time homeownership in the Triangle? Connect with The Oxford Team at Compass to start a plan that fits your budget and your goals.
FAQs
Am I considered a first-time buyer in Raleigh?
- Most programs define first-time as not owning a home in the past three years. Some offer exceptions for certain buyers or targeted areas, so confirm on the program site.
Can I combine DPA with FHA, VA, or USDA loans?
- Many assistance programs can pair with conventional loans and some with FHA or VA. Always confirm compatibility and lender participation before you write an offer.
Does using DPA change my interest rate?
- The assistance itself usually does not change your mortgage interest rate, but participating lenders may have program-specific pricing or fees. The MCC lowers federal tax liability, not the rate.
Will a second-mortgage DPA affect future refinancing?
- A deferred second is another lien on your home. Refinancing or selling can trigger repayment, so review repayment rules and timelines before you accept assistance.
What happens if I move before the forgiveness period ends?
- If the program has a required occupancy period and you move early, you may owe partial or full repayment. Check the program’s forgiveness schedule.
How do I find a participating lender for NCHFA?
- NCHFA lists participating lenders on its site. Local programs often publish approved lender or counselor lists as well. Verify current lists before you apply.