If you have never owned a home, or it has been a few years since you did, you may qualify for Louisiana first-time homebuyer assistance through the Louisiana Housing Corporation’s MRB Assisted Program. This program provides a soft second loan worth 4% of your final loan amount at 0% interest, and the balance is forgiven in full after a 5-year compliance period as long as you occupy the home as your primary residence. Before you can use this assistance, though, you need to know whether you actually qualify as a first-time buyer under LHC’s rules, and the definition is broader than most people expect.
What “First-Time Homebuyer” Really Means for Louisiana First-Time Homebuyer Assistance
Under the LHC MRB Assisted Program, you do not have to be buying your very first house ever to qualify. LHC considers you a first-time homebuyer if you meet any one of the following conditions.
You Have Not Owned a Home in the Last 3 Years
The most common path to qualifying is the three-year rule. If you, or your spouse if you are married, have had no ownership interest in a principal residence during the three-year period ending on the date you purchase your new home, you meet the definition. This means that if you owned a home eight years ago, sold it, and have been renting since, you still qualify for Louisiana first-time homebuyer assistance today. The clock is based on ownership of a principal residence specifically, not a vacation property or an investment property you never lived in personally.
You Are a Single Parent Who Only Owned With a Former Spouse
If you are a single parent and the only home you have ever owned was jointly owned with a former spouse while you were married to them, LHC treats you as a first-time buyer. This recognizes that many single parents come out of a divorce with no real ownership stake going forward.
You Are a Displaced Homemaker in the Same Situation
A displaced homemaker who has only ever owned a home jointly with a spouse also qualifies under this same logic. If your only prior homeownership was tied entirely to a marriage that has since ended, LHC does not hold that against your eligibility for Louisiana first-time homebuyer assistance.
You Are Buying in a Targeted Area
Here is the exception that surprises the most people: if you are purchasing a home in a HUD-defined Targeted area, the first-time homebuyer requirement is waived entirely. It does not matter whether you have owned a home before. Targeted areas exist to encourage investment and homeownership in certain communities, so LHC removes the first-time buyer barrier for properties located there. If you are not sure whether your target home falls inside one of these areas, that is worth checking with a lender familiar with the program.
Income Limits Still Apply Either Way
Meeting the first-time buyer definition, or qualifying through the Targeted area waiver, is only one part of qualifying for Louisiana first-time homebuyer assistance. Your household income also has to fall at or below the applicable Area Median Income (AMI) limit for your situation: 115% AMI in Non-Targeted areas, 140% AMI in Targeted areas, and 80% AMI for all conventional loans under this program. Household income is projected annually to determine your qualifying income, and non-taxable income is not grossed up for compliance purposes.
Credit and Loan Requirements You Should Know
Once you have confirmed you meet the first-time buyer definition for Louisiana first-time homebuyer assistance, a few other requirements come into play. LHC requires a minimum credit score of 640, with at least two credit scores on file, and there are no manual underwrites or non-traditional credit files accepted. Maximum debt-to-income ratio is 50%. Your first mortgage has to be an FHA, VA, USDA Rural Development, Fannie Mae, or Freddie Mac loan, with FHA 203(h) excluded, and it needs to run through automated underwriting with an Approved/Eligible result. The property itself has to be a one-unit primary residence or townhouse, essentially move-in ready at the time you sign your purchase agreement.
One requirement applies to every borrower regardless of how you qualify as a first-time buyer: completing a Homeownership Education class that meets National Industry Standards, through a HUD-approved counseling agency or an approved online course, with a completion certificate on file.
Pairing Louisiana First-Time Homebuyer Assistance With Your First Mortgage
The 4% soft second is designed to work alongside your primary mortgage, not replace it. Most buyers pair this assistance with an FHA loan, though VA and USDA Rural Development loans are also eligible first mortgage types, along with conventional loans through Fannie Mae or Freddie Mac. If you are weighing which loan type fits your situation best, our New Orleans first-time homebuyer guide walks through how FHA, VA, and USDA compare for buyers just starting the process.
How the Application Process Works
You cannot apply for Louisiana first-time homebuyer assistance in isolation. LHC requires a legally binding purchase agreement submitted together with your application for funds, and the property must be essentially move-in ready when that agreement is signed. Your application date is the date an LHC-approved lender receives your complete application, and funds are reserved first-come, first-served. Because funding is limited, waiting until the last minute to gather documents can cost you the assistance even if you otherwise qualify.
Non-Occupant Co-Borrowers
If your income alone will not support the mortgage, Louisiana first-time homebuyer assistance still allows a non-occupant co-borrower on FHA first mortgages. The co-borrower completes a Non-Occupying Co-Borrower Certification, which is used for lender qualification purposes only and does not exempt them from anything on the compliance side. The main, occupying borrower still has to independently meet every LHC requirement, and LHC will not approve a non-occupant co-borrower paired with a main borrower who has no income of their own.
Frequently Asked Questions
Do I qualify for Louisiana first-time homebuyer assistance if I owned a home five years ago?
Yes, in most cases. As long as you, and your spouse if married, have had no ownership interest in a principal residence during the three years immediately before your purchase, you meet LHC’s first-time buyer definition.
What if I am buying in a Targeted area but I already own a home?
The first-time homebuyer requirement is waived entirely for purchases in a HUD-defined Targeted area, so prior homeownership will not disqualify you from Louisiana first-time homebuyer assistance there.
Is the 4% assistance a loan I have to pay back?
Louisiana first-time homebuyer assistance is structured as a 0% interest soft second loan. As long as you occupy the home as your primary residence for the full 5-year compliance period, the balance is forgiven. If you sell or refinance before then, the remaining balance becomes due immediately.
What credit score do I need?
LHC requires a minimum credit score of 640, with at least two scores on file. Non-traditional credit histories are not accepted, and manual underwrites are not permitted.
Can I combine this assistance with an FHA, VA, or USDA loan?
Yes. Eligible first mortgage types include FHA, VA, USDA Rural Development, Fannie Mae, and Freddie Mac loans, with the exception of FHA 203(h).
Talk to a Louisiana First-Time Homebuyer Assistance Specialist
Every buyer’s situation is a little different, and the fastest way to know exactly where you stand is to walk through your specific history, income, and target parishes with a lender who works with the LHC MRB Assisted Program regularly. You can review the official program details directly from the Louisiana Housing Corporation, or reach out to discuss your own eligibility for Louisiana first-time homebuyer assistance.
Charles, Mortgage Loan Advisor with Max Mortgage, LLC. 20+ years in mortgage and real estate. NAMB Certified FHA Mortgage Professional.
Max Mortgage, LLC | NMLS #1446745
Charles Parharm | NMLS #1413036
Licensed to conduct residential mortgage business in applicable states. Loan programs, terms, and conditions are subject to change without notice. All loans are subject to approval. Equal Housing Opportunity.
