If you have never owned a home before, Louisiana first-time homebuyer assistance through the Louisiana Housing Corporation (LHC) can put a meaningful down payment in your hands without adding a second monthly bill to your budget. The program is called the MRB Assisted Program, and it pairs a soft second mortgage with an FHA, VA, USDA Rural Development, Fannie Mae, or Freddie Mac first mortgage. Before you assume you do not qualify, it is worth understanding exactly who this program is built for and how the numbers work.
At Max Mortgage, we walk Louisiana buyers through Louisiana first-time homebuyer assistance every week, and the most common question is simple: does “first-time” really mean what it sounds like? The answer has more nuance than most buyers expect, so let’s break it down.
What Is Louisiana First-Time Homebuyer Assistance?
The LHC MRB Assisted Program provides a soft second loan equal to 4% of your final first mortgage loan amount. That money goes toward your down payment and closing costs. The soft second carries a 0% interest rate, and repayment is deferred for as long as you own and occupy the home as your primary residence. If you stay in the home for the full 5-year compliance period, the entire second-mortgage balance is forgiven. If you sell or refinance before the 5 years are up, the balance becomes due at that time.
This structure is what makes Louisiana first-time homebuyer assistance different from a typical loan. There is no monthly payment on the second mortgage, and there is no interest accruing while you wait it out. It simply needs time and continued occupancy to disappear.
Who Counts as a First-Time Buyer
This is where Louisiana first-time homebuyer assistance surprises a lot of people, because the definition is broader than “you have literally never signed a mortgage.” Under LHC guidelines, you meet the first-time homebuyer requirement if any of the following apply to you:
- You have had no ownership interest in a principal residence during the three-year period ending on the date you purchase your new home (this includes your spouse’s ownership history if you are married).
- You are a single parent who has only owned a home previously with a former spouse while you were married to that person.
- You are a displaced homemaker who has only owned a home with a spouse.
- You are purchasing a home in a HUD-defined Targeted area, which waives the first-time homebuyer requirement entirely.
In other words, someone who owned a home eight years ago but has rented for the last four years may still qualify for Louisiana first-time homebuyer assistance under the three-year rule. It is always worth checking your specific timeline with a loan advisor rather than assuming you are disqualified.
Income Limits and AMI Requirements
Louisiana first-time homebuyer assistance is designed for low-to-moderate income households, and eligibility is measured against Area Median Income (AMI) for your parish. The limits are:
- 115% AMI in Non-Targeted areas
- 140% AMI in HUD-defined Targeted areas
- 80% AMI for all conventional first mortgage loans, regardless of area
Because these limits are set parish by parish and shift with HUD’s published income data, the exact dollar figure for your household depends on where you are buying and how many people live in your household. Your household income is projected annually for compliance purposes, and non-taxable income is not “grossed up” when determining eligibility.
Credit and Debt Requirements
To use Louisiana first-time homebuyer assistance, you will need a minimum credit score of 640, with at least two credit scores on file. Non-traditional credit histories are not accepted for this program. Your maximum debt-to-income ratio cannot exceed 50%, and your loan must receive an Approve/Eligible finding through automated underwriting. Manual underwrites are not permitted under this program.
Lenders will also verify two years of employment history and a recent pay stub within 30 days of application. None of these requirements are unusual for a mortgage, but because the soft second is layered on top of your first mortgage, both loans need to satisfy LHC’s guidelines together.
Pairing the Program With Your First Mortgage
Louisiana first-time homebuyer assistance is not a stand-alone loan. It has to be paired with an eligible first mortgage: FHA, VA, USDA Rural Development, Fannie Mae, or Freddie Mac. FHA 203(h) loans are not eligible. Your first mortgage carries a standard 30-year term, while the soft second carries a 5-year term that aligns with the forgiveness period described above.
The property itself also has to fit the program’s rules. Eligible homes are one-unit primary residences and townhouses anywhere in Louisiana. Duplexes, condos, manufactured homes, vacation homes, and a handful of other property types are not eligible. Your purchase price cannot exceed the FHA loan limit for the area, and the home generally needs to be close to move-in ready at the time you sign your purchase agreement.
The Homebuyer Education Requirement
Every borrower using Louisiana first-time homebuyer assistance must complete a homebuyer education course that meets National Industry Standards, through a HUD-approved counseling agency or an approved online course. You will need to submit a completion certificate as part of your file. This requirement exists to make sure you walk into homeownership with a clear understanding of what you are taking on, not to slow you down.
How to Get Started
Because LHC funds are awarded first-come, first-served, timing matters. You will need a signed purchase agreement in hand when you apply, and your application date is the day a complete application reaches an LHC-approved lender. Working with a lender who is familiar with Louisiana first-time homebuyer assistance from day one helps make sure your file is complete and submitted promptly, rather than sitting in a queue while paperwork gets sorted out.
If you are just starting to explore what you can afford, our New Orleans first-time homebuyer guide is a good companion resource alongside this program overview. You can also review the program directly on the Louisiana Housing Corporation’s MRB program page.
Frequently Asked Questions
Does Louisiana first-time homebuyer assistance require repayment?
No, as long as you occupy the home as your primary residence for the full 5-year compliance period. The 4% soft second is forgiven in full at that point. If you sell or refinance earlier, the balance is due at that time.
Can I use this program with a VA loan if I am a veteran?
Yes. VA loans are one of the eligible first mortgage types under the LHC MRB Assisted Program, alongside FHA, USDA Rural Development, Fannie Mae, and Freddie Mac loans.
What credit score do I need?
A minimum of 640, based on at least two credit scores, is required. Non-traditional credit histories cannot be used in place of traditional scores for this program.
Do I have to take a homebuyer education class?
Yes, every borrower using Louisiana first-time homebuyer assistance must complete an approved homebuyer education course and provide a completion certificate.
What if I owned a home years ago?
You may still qualify. If you have had no ownership interest in a principal residence during the three years before your purchase date, you meet the first-time homebuyer definition, even if you owned a home before that window.
Every buyer’s situation is different, and income limits, purchase price caps, and program availability can shift, so the details above should be confirmed for your specific parish and household before you apply. If you would like to find out where you stand, reach out and we will walk through the numbers with you.
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.
