Looking for Alabama Mortgage Help? If you are finding it hard to pay your mortgage or if you are looking for your first mortgage to buy your new home, you are in the right place. There are a small truckload of programs available to residents in Alabama.

The Alabama Housing Finance Authority has helped more than 85,000 families achieve their dream of owning a home. They offer a variety of loan programs that fit the needs of many buyers. AHFA enables low-to-moderate income buyers to purchase a home with low interest rates and down-payment assistance, not to mention the generous sales price and income limits make qualifying easy.

One of the programs The AHFA offers is called Step Up. Step Up is a program designed for the moderate-income home buyers. That is, people who can afford a mortgage, but may need help with the down payment. AHFA offers down payment assistance with no sales price limits and higher income limits than the First Step program.

The down payment funds are secured by a 10-year second mortgage and are combined with a 30-year, fixed-rate first mortgage. Because these loans are serviced by Alabama Housing Finance Authority, all the homeowners have to do is write one check each month. There is a education course with this program that the homeowner must complete inorder to qualify.

Participants may earn up to $97,300 and remain eligible for the Step Up program, regardless of household size or location. You do not have to be a first time home buyer to use this program. The federal recapture tax does not apply to this program and there are no sales price limits with this program.
You can find lenders for the Step Up Program here:

There is another program available to Alabama residents called the The Mortgage Credit Certificate (MCC) program. This program takes the AHFA’s Step Up program and combines it with the Mortgage Credit Certificate’s tax credit. This makes homeownership even more affordable for Alabama home buyers. This program offers reduction in the amount of federal income tax that a qualified homebuyers pays. MCC’s gives potential home buyers available income to qualify for a mortgage loan.

MCCs provide a direct dollar-for-dollar reduction in federal taxes worth 20 percent of the mortgage interest paid each year. The remaining 80 percent of the interest still can be claimed as a tax deduction. With this program there are income limits.

These limits (effective on applications taken as of June 1, 2010) are set by the U.S. Department of Housing and Urban Development to be used with the First Step/Mortgage Revenue Bond loans and Mortgage Credit Certificates offered by AHFA. When you find a home you’re interested in buying, simply contact one of your local participating lenders to learn whether the address is located in a “target” or “non-target” area. Once you know that information you can find the income requirement for that area.

With the MCC there are also sales price limits. These limits (effective as of April 15, 2009) are set by the Internal Revenue Service to be used with the First Step/Mortgage Revenue Bond loans and Mortgage Credit Certificates offered by AHFA. Once again you must find out of the area is a “target” or “non-target” area as the price changes. It is $316,177 for target and $258,691 for a non target. This price is in all areas for new and existing homes. You can find MCC lenders here.
Habitat for Humanity works closely with the AHFA. The program works like this, the AHFA purchases mortgage loans from Alabama’s Habitat affiliates. This process allows the affiliates to receive the loan amount up front in a lump sum while AHFA receives the monthly payments from the affiliates for the life of the loan. The affiliate then uses the up-front funds to build more housing for low-income families.

Abiding by AHFA’s enabling legislation, the Habitat affiliate solicits the assistance of a local lender to serve as a conduit for the sale of the loan. The affiliate sells the mortgage to the local bank, which then sells the loan to AHFA. This productive cycle unites the local Habitat affiliates, the lending community and AHFA to give Alabama’s less fortunate families a chance at homeownership. You can find out more information here.