Last week we covered five mistakes to avoid as a first-time buyer in Xenia. This week, let's tackle the number-one reason many renters put off buying altogether: "I don't have 20% saved."
The good news? You probably don't need it.
The 20% Down Payment Myth
Many buyers believe a 20% down payment is required to purchase a home. In reality, plenty of qualified borrowers buy with far less, sometimes with no down payment at all, through conventional loans with as little as 3% down, FHA loans, VA loans for eligible service members and veterans, and USDA loans in qualifying rural areas.
Twenty percent down can help you avoid private mortgage insurance and lower your monthly payment, but it is not a requirement to become a homeowner. For many first-time buyers in Greene County, waiting years to save a large down payment may cost more in the long run than starting sooner and building equity along the way.
1 OHFA Down Payment Assistance
The Ohio Housing Finance Agency (OHFA) offers a statewide program that can make a real difference for Xenia buyers.
Through OHFA's Down Payment Assistance program, eligible buyers may receive:
- 3% of the purchase price toward a down payment or closing costs on a conventional loan
- 3.5% of the purchase price on a government loan (FHA, VA, or USDA)
This assistance is structured as a forgivable second loan. If you remain in the home for seven years, it is fully forgiven. If you sell or refinance sooner, repayment may be required.
To qualify, buyers generally need to meet income and purchase price limits, which vary by county, meet minimum credit score requirements, and complete a free, HUD-approved homebuyer education course.
Through the Neighborhood Assistance Corporation of America (NACA) homebuying program, qualified buyers may receive:
- No down payment requirement
- No private mortgage insurance (PMI)
- No lender fees
- No traditional closing costs
- Access to a below-market fixed interest rate
2 NACA
NACA is not a traditional grant or down payment assistance program. Instead, buyers complete NACA's homebuyer counseling and qualification process before becoming eligible for the NACA mortgage program.
Buyers interested in NACA should begin the qualification process early. Eligibility is based on the buyer's overall financial situation, ability to afford the mortgage, and completion of NACA's required counseling and homebuying steps. Program guidelines and property requirements should be confirmed directly with NACA.
3 Grants for Grads
If you have earned an associate's, bachelor's, master's, or doctoral degree within roughly the past four years, Grants for Grads may be worth asking about. It offers 2.5% or 5% of the purchase price toward your down payment, with the assistance forgiven after five years as long as you continue living in Ohio.
This can be a strong fit for young professionals commuting to Wright-Patterson Air Force Base, Wright State University, or the greater Dayton job market while putting down roots in Xenia.
4 Ohio Heroes
Ohio Heroes is a discounted mortgage interest rate program for public-service professionals, including teachers, nurses, and other healthcare workers, police officers and firefighters, and active-duty military members and veterans.
It can typically be combined with OHFA's down payment assistance for even greater savings, though eligibility and current terms should always be confirmed with an OHFA-approved lender.
5 USDA: Zero Down in Qualifying Areas
Some properties in the more rural pockets of eastern Greene County may fall within USDA-eligible zones, where qualified borrowers can finance with no down payment at all. USDA eligibility depends on the specific property address and current program guidelines, so this is worth checking early with your lender, before you fall in love with a particular home.
6 FHA & HUD Homeownership Options
The Federal Housing Administration (FHA), which is part of the U.S. Department of Housing and Urban Development (HUD), offers several homeownership options that may help qualified buyers purchase a home with less money upfront.
- FHA loans may allow a down payment as low as 3.5% for qualified borrowers
- FHA loans generally offer more flexible credit requirements than some conventional mortgage programs
- FHA 203(k) financing may allow eligible buyers to finance both the purchase of a home and qualifying repairs or renovations through one mortgage
- Some Housing Choice Voucher participants may be able to use their voucher toward homeownership expenses through a local Housing Choice Voucher Homeownership Program
FHA loans are not grants. FHA insures mortgages made by approved lenders, which can make homeownership more accessible to buyers who may have a smaller down payment or need more flexible financing options.
HUD also supports homebuyer education and other specialized homeownership programs. Eligibility varies by program, and not every local housing authority offers the Housing Choice Voucher Homeownership option. Buyers should speak with an FHA-approved lender, HUD-approved housing counselor, or the appropriate local housing authority to determine which programs may be available to them.
How to Find Out What You Qualify For
Every buyer's situation is different, and program details, income limits, and interest rates change over time. Rather than guessing, ask your lender directly:
- Am I eligible for OHFA Down Payment Assistance, Grants for Grads, Ohio Heroes, USDA financing, NACA, or FHA/HUD homeownership programs?
- Can any of these programs be combined with one another?
- What are the current income and purchase price limits for Greene County?
- What credit score or other qualification requirements apply?
- Will I have to repay any assistance if I sell or refinance the home before the required forgiveness period ends?
Not every lender participates in every program, so it helps to work with an OHFA-approved lender who handles these loans regularly.
Final Thoughts
Saving a smaller down payment than you expected does not mean settling for less home or waiting years longer than necessary. With the right combination of programs, many first-time buyers in Xenia are getting into homeownership sooner than they thought possible.
Next week, we'll look at what your money actually buys in today's Xenia market, breaking down real price points and monthly payment examples.
Ready to see what you might qualify for? Reach out to grab my free Greene County First-Time Buyer Checklist or set up a coffee chat to talk through your options.
Educational Notice: Loan programs, assistance amounts, eligibility requirements, property eligibility, interest rates, and funding availability may change. Buyers should verify current information with an approved mortgage lender and the appropriate program administrator. This article is provided for general educational purposes and is not legal, tax, financial, mortgage, or lending advice.