Alabama Step Up Program Guide

Guide to Getting Started with the Alabama Step Up Program

The Alabama Step Up Program helps moderate-income homebuyers by providing financial assistance for down payments and closing costs. Below is a step-by-step guide to help you navigate this 2025 program:

1. Understand the Program:

• Purpose: The program supports first-time homebuyers and repeat buyers by offering financial aid for down payments and closing costs.
• Assistance Amount: You can receive up to 4% of the sales price, with a cap of $10,000.
• Loan Structure: The assistance is structured as a second mortgage, which is combined with a 30-year, fixed-rate first mortgage to cover the down payment.

2. Check Eligibility:

To qualify for the Step Up Program, ensure you meet the following criteria:

• Income Limits: Your household income must be below $159,200, regardless of household size or property location.
• Credit Score: A minimum credit score of 640 is required.
• Debt-to-Income Ratio: Your total monthly debt payments should not exceed 45% of your gross monthly income.
• Homebuyer Education: You must complete an AHFA-approved homebuyer education course before applying.
• Property Requirements: The property must be located in Alabama and be your primary residence.

3. Application Process:

• Assigned Loan Officer: We will assign you to a dedicated loan officer who will reach out to guide you through the process. This loan officer will assist with verifying your eligibility and gathering the necessary documentation.
• Documentation: Be ready to provide required documents such as proof of income, credit history, and a certificate from the homebuyer education course.

4. Complete the Homebuyer Education Course:

• Mandatory Requirement: All applicants must complete an AHFA-approved homebuyer education course.
• Course Options: The course is available both online and in-person. A certificate will be issued upon completion, which is required for your loan application.

5. Secure Down Payment Assistance:

• Second Mortgage Details: The down payment assistance is provided as a second mortgage, to be paid off in monthly installments alongside the first mortgage.
• Repayment Terms: The second mortgage is not assumable and must be repaid in full if the home is sold, refinanced, or the first mortgage is paid off.

6. Finalizing the Loan:

• Approval Process: Once your application is approved, your loan officer will help you with the next steps, including signing the loan documents.
• Closing Costs: You may need to cover any closing costs not covered by the assistance.

Our dedicated loan officers are here to make this process as smooth and easy as possible. They will guide you through every step of the way, ensuring you have the support you need to successfully complete your application and secure the financial assistance you need. With their help, you can confidently take advantage of the Alabama Step Up Program and move one step closer to homeownership.