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If saving up for a down payment is your biggest barrier to homeownership, taking advantage of the programs offered by the Ohio Housing Finance Agency (OHFA) could be the missing piece of your financial puzzle. They offer down payment assistance that is structured as a forgivable loan. As long as you don’t sell or refinance the home within the first seven years, the full amount is forgiven. We’ll talk about all the pros and cons of working with OHFA or just going the traditional route. OHFA is a state agency, not a lender. They don't hand you the cash directly; instead, they "sponsor" specific loan products that are fulfilled by private, OHFA-approved banks. When you use their programs, you are actually signing for two separate loans: The First Mortgage: This is your "base" loan (FHA, Conventional, etc.). It has the standard 30-year term and a monthly interest payment. The Second Mortgage: This is the OHFA assistance. It is a recorded lien against your property until the seven-year mark is reached. You don’t make payments on it, but you do have to repay it if you sell your home early. The beauty of this program is the way it stacks with Conventional, FHA, VA, and USDA loans. If you’d like to participate in this program, you need to know that you cannot apply to OHFA directly. You must work with an OHFA-approved lender. Once you’ve found a participating lender, they will handle the OHFA application alongside your standard mortgage application. And because this is a state-funded program, there are some requirements you must meet. It gets a bit confusing due to OHFA targeting specific areas, even within the same town. Here’s that broken down: Non-Target Area Income Limits 1 or 2 person family: $96,400  3 or more person family: $110,860 Target Area Income Limits 1 or 2 person family: $115,680 3 or more person family: $134,960 If your income happens to fall between the target and non-target area limits, you can check whether or not the property you’re buying is in a target area here: https://ohiohome.org/Geodata/default And if it looks like you meet all of those requirements, you must also complete a free, state-approved homebuyer education course. I recommend doing this early so the certificate is ready when you find the right house. Here’s a link to that course so you can get started. https://hbe.ohiohome.org/ When you’re ready to start moving the ball forward, you can reach out to some approved lenders to compare quotes. You can find that list here: https://ohiohome.org/lenders/default.aspx Now if all of this is sounding a little too good to be true, that’s because there’s a catch. I wouldn’t be doing my job if I didn’t fully equip you with all the facts. This assistance does come at the cost of a higher interest rate. And over the life of the loan, that interest rate will cost you significantly more than the benefit you’re receiving upfront. Banks, right? Let’s run a hypothetical of a $200,000 home financed with an FHA loan. As of April 2026 (https://ohiohome.org/rates/) a standard 30-year fixed rate in the “First-Time Homebuyer Program” is 5.875%. In order to receive the 3.5% Down Payment Assistance (DPA) of $7,000, you would need to take on a rate of 6.625%. Option 1 (No DPA): At 5.875%, your monthly Principal & Interest (P&I) is $1,183.08. Option 2 (With $7k DPA): At 6.625%, that jumps to $1,280.62. By taking the assistance, you are signing up for an extra $97.54 every month. If you stay in the home for the full 30-year term, that $7,000 "gift" becomes very expensive: Extra payments over 30 years: $35,114. Net cost of the DPA: After subtracting the $7,000 you were given, you’ve paid $28,114 more in interest than if you had brought your own cash to the closing table. When the loan is forgiven at the 7 year mark, you have already paid $8,193 in extra interest to get that $7,000. So with all of that in mind, who would this program even be right for? If you’re renting and feel frustrated by not building up any equity, but are also really struggling to save up money for a down payment, this program may provide you the flexibility to get into a home of your own. At that point, you can begin building equity that will grow. Imagine a scenario where you live in that $200,000 home for 7 years, put a lot of blood, sweat and tears into it, and then sell for $250,000. The $7,000 DPA is forgiven at that point but you’ve already paid back $8,193 in extra interest, so it’s been a net loss of $1,193. After 84 monthly payments, your remaining loan balance is down to $176,760. Subtracting that amount from the sales price leaves you with $73,240 to put towards a down payment for your next home (minus selling expenses). Or you could refinance at that point if that makes sense. Compare that to spending $1,500 in rent for those same 7 years, and the compromise of a higher monthly payment becomes worth discussing. Ultimately, if you can manage to save up enough, avoiding the DPA is a smarter choice in the long-run. And fortunately, most of North-Central Ohio is eligible for a 0% down payment USDA loan except for the cities of Findlay, Mansfield/Ontario and Marion. This was a bit of a bigger topic than usual, so thanks for sticking with me. Let me know if you have any questions, thanks! Call or text 419-775-6019