Is the down payment the only thing standing between you and a home in Southern Pines? You are not alone. North Carolina offers real options to help first-time buyers, from state-backed mortgages to assistance that lowers your cash to close. In this guide, you’ll learn how the North Carolina Housing Finance Agency (NCHFA) works, what programs you can pair with it, how to qualify in Moore County, which documents to prepare, and the next steps to connect with experienced local lenders. Let’s dive in.
NC programs at a glance
Buying your first home gets easier when you know what help is available. Here’s how the main options come together in North Carolina and Moore County.
NCHFA: your starting point
The North Carolina Housing Finance Agency partners with approved lenders to offer reduced-rate mortgages and down payment or closing cost help for eligible buyers. To use an NCHFA program in Southern Pines, you apply through a participating lender, meet Moore County income and purchase-price limits, and complete any required homebuyer education. Program names and terms can change, so confirm details on the NCHFA site or with a participating lender.
Loan types you can pair
- FHA loans. Backed by HUD, FHA loans allow low down payments for qualifying credit. Many first-time buyers combine FHA financing with separate assistance to reduce cash to close. Learn more on HUD’s FHA page.
- VA loans. If you are eligible active-duty or a veteran, VA financing often requires 0 percent down and does not have monthly mortgage insurance. Down payment assistance may still help cover closing costs. Review requirements on the U.S. Department of Veterans Affairs Home Loans page.
- USDA Rural Development. USDA loans offer 0 percent down for income-qualified buyers purchasing in USDA-eligible areas. Parts of Moore County may qualify, based on property location. Explore program basics at USDA Rural Development.
- Conventional options for first-time buyers. Programs like Fannie Mae HomeReady and Freddie Mac Home Possible allow down payments as low as 3 percent for eligible borrowers. Some buyers pair these with state or local assistance.
Down payment assistance, explained
Down payment assistance (DPA) lowers your upfront costs. In North Carolina, assistance is often delivered as a second lien that activates when you sell, refinance, or pay off the first mortgage. Here are the common structures you will see and what they mean for you.
Deferred 0 percent second mortgage
- How it works: A second lien covers part of your down payment or closing costs. There is no interest and no monthly payment. You repay the principal when you sell, refinance, or pay off the first mortgage.
- What to consider: This eases cash at closing, but the lien remains on title until paid, which can affect future refinancing options.
Forgivable second mortgage
- How it works: The assistance is forgiven after you meet a time-in-occupancy requirement. Some programs forgive a portion each year.
- What to consider: If you sell or refinance before the forgiveness period ends, you may have to repay the remaining balance.
Repayable second mortgage
- How it works: You make scheduled payments on the second lien, sometimes at low or zero interest.
- What to consider: You reduce cash flow with a second payment, but the timeline and payoff are predictable.
Grants or one-time closing cost help
- How it works: An upfront grant applies to your down payment or closing costs and does not create a lien.
- What to consider: Grants are less common, often smaller, and can be harder to qualify for.
Mortgage Credit Certificate (MCC)
- How it works: An MCC is a federal tax credit on a portion of your annual mortgage interest, which can improve after-tax affordability. Availability varies by state and locality.
- What to consider: Check if NCHFA or local governments offer MCCs and whether they pair with your chosen loan type.
Who qualifies in Moore County
Eligibility depends on the program, your income, the property price, and how you plan to live in the home. Your participating lender will confirm the specifics for Moore County and your household.
- Income limits: NCHFA sets income caps by county and household size. Moore County limits apply when you use NCHFA programs.
- Purchase price limits: Many programs cap the home’s price per county or property type.
- Primary residence: The property must be your owner-occupied home. Investment properties typically do not qualify.
- Property types: Most single-family homes qualify. Approved condos and some manufactured homes may be eligible if they meet program rules.
- Credit and underwriting: Minimum credit scores and debt-to-income guidelines vary by loan product and lender. Your lender will apply standard underwriting plus any NCHFA rules.
- First-time buyer status: Some NCHFA programs require that you have not owned a home in the past three years. NCHFA may also offer options for repeat buyers in targeted areas.
- Homebuyer education: Many assistance programs require an approved course, completed before closing and sometimes before your funds are reserved.
For current income and purchase price limits, lender lists, and education guidance, use the NCHFA website.
Your document checklist
Lenders use documentation to verify eligibility, income, and assets. Gather these early to stay ahead of deadlines.
- Government-issued photo ID for all borrowers
- Social Security numbers or ITIN for all borrowers
- Pay stubs for the last 30 days and year-to-date earnings
- W-2s for the last 2 years
- If self-employed: last 2 years of business returns, 1099s as applicable, and a recent profit and loss statement
- Federal tax returns for the last 1–2 years
- Bank statements for the last 2–3 months for checking, savings, and liquid assets
- Documentation for any large deposits
- Gift letters if funds are coming from a relative, following lender and NCHFA rules
- Signed purchase contract and listing details when you go under contract
- Homebuyer education certificate if the program requires one
- Rent or mortgage payment history if requested
- Homeowners insurance binder, title documents, and any HOA or condo documents at final underwriting
Smart steps to get started
A little planning goes a long way. Use this simple path to move from research to keys in hand.
- Learn program basics on the NCHFA site so you know the common options and requirements.
- Complete homebuyer education if your chosen assistance requires it. Doing this early prevents delays.
- Contact multiple NCHFA-participating lenders in Moore County for pre-approval. Ask about their experience with NCHFA loans.
- Get a pre-approval letter showing your max purchase price and the program you plan to use.
- When you find a home, send your signed contract to your lender and request a DPA reservation if the program needs it.
- Work through underwriting and closing with your lender and agent. Expect a few extra steps for subordinate-lien processing when assistance is involved.
How to vet local lenders
Choosing the right lender can make your experience smoother and your closing more predictable.
- Confirm participation. Ask, “Are you an NCHFA-participating lender, and which NCHFA products do you actively originate?”
- Ask about local experience. “How many NCHFA loans have you closed in Moore County in the last 12 months?”
- Clarify credit and DTI requirements. Each lender sets overlays on top of program rules.
- Request a full cash-to-close estimate. Include assistance, fees, prepaids, and escrows.
- Understand the DPA process. “How do you handle the DPA reservation and second-lien paperwork?”
- Confirm education providers. “Which homebuyer education certificates do you accept?”
- Check licensing and reviews. You can verify licensing through the state or the Nationwide Multistate Licensing System and review consumer guidance on the Consumer Financial Protection Bureau.
Quick compare: first-time buyer options
Every buyer’s profile is different. Here is a simple way to think about choices you may consider in Southern Pines.
- NCHFA mortgage with NCHFA assistance. Usually pairs a fixed-rate first mortgage with a deferred or forgivable second lien for down payment or closing costs. County income and purchase-price limits apply, and education is usually required. Good for buyers who meet limits and want lower cash-to-close.
- FHA loan. Typically allows a 3.5 percent down payment if you meet FHA credit guidelines. Works well when paired with assistance to cover part of the down payment and closing costs. See FHA basics on HUD’s site.
- VA loan. Often 0 percent down for eligible service members and veterans, with no monthly mortgage insurance. Assistance can sometimes cover closing costs. Explore details with the VA Home Loans program.
- USDA Rural Development. 0 percent down for income-eligible buyers purchasing in USDA-eligible areas. Check program information at USDA Rural Development.
- Conventional first-time buyer options. HomeReady and Home Possible allow 3 percent down for eligible borrowers. These can be paired with assistance and may benefit buyers with stronger credit who want a conventional path.
Budgeting tools and property checks
Want a quick estimate of your monthly payment? Try a simple calculator like the Bankrate mortgage calculator to preview principal, interest, taxes, and insurance. If you are exploring zero-down options, remember that USDA loans require the home to be in an eligible location. You can review program details and resources on the USDA Rural Development site.
For homebuyer education and counseling, you can find guidance through NCHFA and HUD-approved counseling agencies. HUD’s site lists counseling resources and general homebuyer information at hud.gov.
Final thoughts for Southern Pines buyers
You have real, workable paths to homeownership in Moore County. The key is to confirm your eligibility early, line up an NCHFA-participating lender, and complete your education so assistance funds can be reserved in time. With the right plan, you can reduce upfront costs and move confidently toward your first set of keys.
If you want a local guide by your side from pre-approval to closing, reach out to Rhonda Edwards for warm, hands-on support here in Southern Pines.
FAQs
What is NCHFA and how does it help first-time buyers?
- NCHFA partners with participating lenders to offer reduced-rate mortgages and down payment or closing cost assistance for eligible North Carolinians, including Moore County buyers, with county-level income and purchase-price limits listed on the NCHFA site.
Do I have to be a first-time buyer to use NCHFA?
- Some NCHFA programs target first-time buyers, usually defined as not owning a home in the past three years, while others support repeat buyers in certain areas; check current program rules with a participating lender or the NCHFA site.
Can VA-eligible buyers use assistance for closing costs?
- Yes, eligible VA buyers often finance with 0 percent down and can sometimes pair assistance to help cover allowable closing costs, subject to program and lender rules outlined by the VA Home Loans program.
Are parts of Southern Pines eligible for USDA loans?
- USDA eligibility depends on the property’s location and your income; some areas of Moore County may qualify, so review program information and resources through USDA Rural Development and confirm specifics with your lender.
What documents will my lender require for assistance programs?
- Expect government ID, Social Security numbers or ITIN, recent pay stubs, W-2s, tax returns, bank statements, documentation for large deposits, gift letters if needed, a signed contract when under contract, and a homebuyer education certificate if required.
Will I have to repay my down payment assistance?
- It depends on the structure: some aid is deferred at 0 percent and repaid when you sell or refinance, some is forgivable after you meet an occupancy period, and some is a grant with no repayment; your lender will explain the exact terms.
How long does the process take with assistance involved?
- Timelines vary by lender and program, but plan for standard underwriting plus extra time for the subordinate-lien or reservation steps that come with down payment assistance.
