Raleigh Down Payment Assistance: City & NCHFA Programs Explained

Buying in Raleigh and worried about the upfront cash? You are not alone. Between closing costs, interest rate volatility, and saving for a down payment, the numbers can feel like they move faster than your timeline. The good news: the City of Raleigh and the North Carolina Housing Finance Agency (NCHFA) offer real assistance that can bring your first home or next home within reach. This guide walks you through what is available in Wake County, how eligibility works, and how to combine programs without slowing your closing. Let’s dive in.

Down payment help at a glance

City of Raleigh assistance

The City of Raleigh offers a zero‑interest subordinate loan to help with down payment and closing costs for income‑qualified buyers. The assistance can be significant. Eligible buyers may receive up to $45,000 to $60,000, depending on where the property sits in the city or county. Assistance is typically structured as a subordinate lien, often forgivable or deferred with specific terms. Always confirm the current amount, geography, and forgiveness schedule on the city program page and with your lender.

NCHFA 3% down payment assistance

NCHFA provides a down payment option equal to 3% of the purchase price. This assistance is designed to pair with an NCHFA first mortgage through a participating lender. The form of assistance can vary by product, and your lender will explain how it is documented in your loan file.

NCHFA 1st Home Advantage up to $15,000

NCHFA’s 1st Home Advantage can provide up to $15,000 in assistance for eligible buyers when used with an NCHFA first mortgage via a participating lender. Program names and features can evolve, so ask your lender to confirm the current maximum and terms for your scenario.

Who qualifies in Wake County

Income and purchase price limits

Both the City of Raleigh and NCHFA use income limits based on area median income. Limits vary by household size and program. There are also purchase price caps that depend on your loan type and county. Ask your lender for the current Wake County limits and caps that apply to your file.

First‑time or repeat buyer status

Many NCHFA options target first‑time buyers, typically defined as not owning a home in the last three years. NCHFA also offers products for repeat buyers in certain cases. City funds may prioritize first‑time buyers or homes in targeted areas. Confirm your status early so your preapproval reflects the right product.

Property and occupancy

Eligible properties usually include owner‑occupied single‑family homes and certain condos or townhomes. Investment properties are not eligible. You must plan to live in the home as your primary residence.

Credit, debt, and documentation

Your first‑mortgage lender will check credit score, debt‑to‑income ratio, and reserves. NCHFA adds program overlays that participating lenders follow. The city program may have minimum standards as well. Expect to provide pay stubs, W‑2s or tax returns, recent bank statements, ID, and a homebuyer education certificate if required.

Can you combine programs

Layering assistance can work, and it is one way buyers in Raleigh reduce cash to close. Whether you can stack the City of Raleigh DPA with an NCHFA option depends on program rules and lender approval.

• Lien priority: Your first mortgage must stay in first position. Subordinate loans are recorded in the order your lender requires.
• Combined LTV: Conventional, FHA, VA, and USDA loans each have limits on total combined loan‑to‑value. Your lender will calculate this to make sure the stack fits.
• Caps and compatibility: Purchase price caps, assistance maximums, and investor rules must all align. Some products cannot be layered; others can with conditions.

Common examples include a City of Raleigh zero‑interest second paired with either the NCHFA 3% DPA or the NCHFA 1st Home Advantage up to $15,000. Your lender must confirm the details in writing before you go under contract if you plan to rely on both.

Your step‑by‑step plan

1. Speak with a participating NCHFA lender. Make sure they also work with the City of Raleigh program and can advise on stacking.
2. Get preapproved with the assistance included. Ask for a written “stacking analysis” that shows loan amounts, lien order, and combined LTV.
3. Confirm eligibility for both programs. Check income limits, purchase price caps, property type, and geography.
4. Reserve funds if needed. Some assistance is limited and may require reservation before closing.
5. Assemble documents early. Submit a complete file so underwriting can clear both the first mortgage and assistance on time.
6. Coordinate at contract. Share program contacts with your lender and title team so DPA documents are ready for closing.

What to bring your lender

Use this quick checklist to save time and reduce back‑and‑forth.

• Photo ID and Social Security number
• Last 30 to 60 days of pay stubs
• Last 2 years of W‑2s and, if self‑employed, federal tax returns
• Last 2 months of bank statements
• Signed purchase contract and HOA documents if applicable
• Homebuyer education certificate if required
• Gift letter and documentation if using gifted funds

Ask your lender to complete a one‑page worksheet with you that includes:

• Program names you plan to use and proposed assistance amounts
• Lien priority order and combined LTV
• Income and purchase price limits used for approval
• Minimum credit score and maximum DTI required
• Any required buyer cash contribution
• Estimated closing date and any reservation deadlines

Timelines and what to expect

Preapproval and program screening usually happen together during your mortgage application. City and NCHFA approvals are documented during underwriting, then the assistance is recorded at closing. If your file is complete, the timeline often aligns with a standard 30 to 45 day escrow. Limited‑fund programs may add steps, so start early if you want to compete on a quick close.

Risks and the fine print

Forgiveness vs. repayment

Some city loans are forgivable after a set number of years or are deferred until you sell or transfer the home. NCHFA assistance may be repayable or forgivable depending on the product. Ask for the forgiveness schedule, any acceleration triggers, and what happens if you refinance or move sooner than planned.

Refinancing and selling later

Subordinate liens can affect refinance options. Some programs allow subordination when you refinance; others require payoff at that time. At sale, any remaining balance is typically repaid from proceeds unless your program forgives the lien.

Monthly costs still apply

Assistance reduces cash to close, but you still budget for property taxes, homeowners insurance, HOA dues, and mortgage insurance if applicable.

Two quick scenarios

• Example 1: A $400,000 purchase with NCHFA 3% DPA could add $12,000 toward your down payment or costs, subject to eligibility and program rules. If your lender also approves a City of Raleigh second, you may reduce your cash to close even further.
• Example 2: A $475,000 purchase using NCHFA 1st Home Advantage could provide up to $15,000, paired with a City of Raleigh zero‑interest second if allowed. Your lender will confirm combined LTV and lien order before you write an offer.

Numbers are for illustration only. Always rely on your loan estimate and written program approvals for exact figures.

Ready to explore your options

If you want a tailored plan that fits your price point, neighborhood goals, and timeline, let’s map it out before you tour homes. A short planning call can confirm eligibility, outline your cash to close, and position you to write a strong, confident offer. Schedule a Private Consultation with Unknown Company to get started.

FAQs

How much down payment help is available in Raleigh?

• The City of Raleigh lists up to $45,000 to $60,000 depending on location, while NCHFA offers a 3% option and the 1st Home Advantage up to $15,000, subject to eligibility and program rules.

Can I combine City of Raleigh and NCHFA assistance?

• Layering can be possible with lender and program approval, as long as lien order, combined LTV, price caps, and product rules align.

Do I have to be a first‑time buyer for NCHFA?

• Many NCHFA options target first‑time buyers, defined as no homeownership in the past three years, though some products serve repeat buyers; your lender will confirm which applies.

What credit score do I need for these programs?

• Minimum scores are set by your first‑mortgage product and NCHFA overlays, and the city may have standards too; your participating lender will provide the exact requirements.

How long does assistance approval take in Wake County?

• When your file is complete, DPA approval usually fits within a standard 30 to 45 day closing, though limited‑fund programs or reservations may add steps.

Will assistance limit my ability to refinance or sell later?

• Subordinate liens can affect a future refinance and are typically repaid at sale unless forgiven; ask for the forgiveness schedule and subordination policy up front.