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First-Time Buyer loans in Alabama

Quick answer

First-time buyers in Alabama can use FHA (3.5% down), conventional 97 (3% down), VA or USDA loans, plus programs from Alabama Housing Finance Authority (AHFA). On a $195,100 home, 3% down is about $5,853.

By Purchase Mortgage Loan Editorial Team Checked against official sources per our editorial standardsLast updated

First-Time Buyer loan snapshot for Alabama

ItemEstimate
Minimum down payment0%–3.5%
Minimum credit score580–620
Typical AL home value$195,100
3.5% down on typical home$6,829
20% down on typical home$39,020
Avg. effective property tax0.38%/yr (~$61/mo)
Income for typical home (31% rule)$58,000

Rate assumption: 7.18% (Freddie Mac PMMS 30-year fixed average, week of November 5, 2026). Change it in the payment calculator.

Which Alabama programs pair with First-Time Buyer loans?

  • Step Up: Combines a 30-year fixed first mortgage with a down payment assistance second loan for moderate-income buyers (first-time status not required).
  • Affordable Income Subsidy Grant: A grant toward closing costs for eligible lower-income buyers using an AHFA first mortgage.

Details and current limits: Alabama Housing Finance Authority (AHFA).

Compare first-time buyer loan options

LoanMin. downMin. creditMortgage insurance
FHA3.5%5801.75% upfront + annual MIP
Conventional 97 / HomeReady / Home Possible3%620PMI, removable
VA0%Lender-set (~580–620)None (funding fee)
USDA0%~6401% upfront + 0.35% annual

Who counts as a first-time home buyer?

Under HUD and most agency definitions, you're a first-time buyer if you haven't owned a principal residence in the last three years. Single parents and displaced homemakers who only owned with a former spouse may also qualify.

First-Time Buyer loans in Alabama cities

First-Time Buyer in HuntsvilleFirst-Time Buyer in BirminghamFirst-Time Buyer in MontgomeryFirst-Time Buyer in MobileFirst-Time Buyer in TuscaloosaFirst-Time Buyer in HooverFirst-Time Buyer in AuburnFirst-Time Buyer in DothanFirst-Time Buyer in MadisonFirst-Time Buyer in DecaturFirst-Time Buyer in FlorenceFirst-Time Buyer in PrattvilleFirst-Time Buyer in Vestavia HillsFirst-Time Buyer in Phenix CityFirst-Time Buyer in AlabasterFirst-Time Buyer in GadsdenFirst-Time Buyer in OpelikaFirst-Time Buyer in NorthportFirst-Time Buyer in EnterpriseFirst-Time Buyer in DaphneFirst-Time Buyer in HomewoodFirst-Time Buyer in AthensFirst-Time Buyer in TrussvilleFirst-Time Buyer in BessemerFirst-Time Buyer in PelhamFirst-Time Buyer in FairhopeFirst-Time Buyer in AlbertvilleFirst-Time Buyer in FoleyFirst-Time Buyer in Mountain BrookFirst-Time Buyer in OxfordFirst-Time Buyer in HelenaFirst-Time Buyer in AnnistonFirst-Time Buyer in PrichardFirst-Time Buyer in CullmanFirst-Time Buyer in TroyFirst-Time Buyer in Tillmans CornerFirst-Time Buyer in SelmaFirst-Time Buyer in CaleraFirst-Time Buyer in MillbrookFirst-Time Buyer in Muscle ShoalsFirst-Time Buyer in HueytownFirst-Time Buyer in SaralandFirst-Time Buyer in Center PointFirst-Time Buyer in GardendaleFirst-Time Buyer in Gulf ShoresFirst-Time Buyer in ChelseaFirst-Time Buyer in ScottsboroFirst-Time Buyer in HartselleFirst-Time Buyer in TalladegaFirst-Time Buyer in Fort PayneFirst-Time Buyer in Alexander CityFirst-Time Buyer in JasperFirst-Time Buyer in OzarkFirst-Time Buyer in JacksonvilleFirst-Time Buyer in McCallaFirst-Time Buyer in IrondaleFirst-Time Buyer in MoodyFirst-Time Buyer in Pell CityFirst-Time Buyer in EufaulaFirst-Time Buyer in Sylacauga

Frequently asked questions

Yes. First-Time Buyer loans are available statewide in Alabama through approved lenders, subject to county loan limits where they apply.

Often yes. Alabama Housing Finance Authority (AHFA) and local programs frequently pair assistance with FHA, conventional, VA or USDA first mortgages. Eligibility depends on income, price and program rules.

Answer a few questions on Purchase Mortgage Loan and we'll match you with lenders and loan officers in our network who serve Alabama.

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Figures on this page are estimates for educational purposes only and are not a loan offer or commitment to lend. Rates, loan limits, fees and assistance programs change frequently and vary by lender, location and borrower profile. Confirm current terms with a licensed loan officer.