Are you dreaming of becoming a homeowner in Mississippi? You're not alone. Between the low cost of living and friendly people, the Magnolia State has plenty to offer homebuyers.

However, the purchase cost can be overwhelming, especially for new buyers. That's where first-time homebuyer grants come in. These programs can provide financial assistance and make homeownership more affordable for those who may not have the savings to cover a down payment or closing costs. 

This guide leads you through what first-time home buyer grants in Mississippi are, the benefits of being a first-time homebuyer in the Magnolia state, and the various grant programs available to help make your dreams a reality.

What are first-time homebuyer grants in Mississippi? 

In Mississippi, first-time home buyers might be eligible for financial assistance programs and grants. These grants are designed to encourage more people to become homeowners by helping you cover your home-buying expenses, such as down payments and closing costs. The government agencies and nonprofit organizations that offer these incentives usually have specific eligibility requirements, like income limits or credit score thresholds.

Examples of first-time homebuyer grants in Mississippi

Some of the down payment assistance Mississippi offers comes from the Mississippi Home Corporation (MHC). This corporation was created by the government in 1989 to develop public and private partnerships to increase the quality and affordability of homes in the state. Two of MHC’s loan programs, Smart6 and the Mortgage Revenue Bond 7 (MRB7) program, combine loans with down payment grants. A third is geared specifically toward teachers.

Smart6

The Smart6 loan program is an attractive option for first-time homebuyers because they can get a 30-year fixed-interest rate mortgage, plus $6,000 in Mississippi down payment assistance. That assistance comes in the form of a no-interest second mortgage that only comes due in one of three situations:

• You sell the home. 

• The home is no longer occupied by the owner.

• You refinance or your first mortgage is paid in full.

Not everyone is eligible for a Smart6 loan. The main requirements are that you are a resident of the United States living in Mississippi and your household income must fall below $110,000. Your lender will likely also have credit score guidelines and may only offer you a mortgage if you’re buying a single-family home, townhome, or condominium. 

The Mortgage Revenue Bond 7

Similar to Smart6, Mississippi’s MRB7 program combines a 30-year fixed-rate loan with down payment assistance. The difference is that first-time homebuyers can get up to $7,000 in the form of a zero-interest second mortgage through the MRB7 program. Payments on the second mortgage are deferred for the first 10 years. After that, the loan is forgiven if the home is still your primary residence. 

The requirements for the MRB7 program are stricter than the Smart6. The program has income limits and purchase price restrictions based on the county the home you’re buying is located in, and your lender will likely ask for a minimum credit score. However, you may be eligible for MRB7 even if you’re buying a mobile home if it’s permanently affixed to the land.

Housing Assistance for Teachers

Teachers who are willing to put down roots in Mississippi may qualify for a $6,000 grant they can use for a down payment and closing costs on a new home. To be eligible, they must:

• Be willing to teach in a school district that’s experiencing a teacher shortage.

• Remain employed in that district for at least three years.

• Combine the grant with a 25- or 30-year, fixed-interest loan.

• Contribute at least 1% to the upfront costs of the home.

• Have at least one month of reserves.

These grants are forgiven after three years if you stay employed in the school district. Otherwise, they must be repaid.

In addition to these first-time homebuyer programs in Mississippi, the state also offers mortgage credit certificates to reduce your federal tax. The credit can be up to 40% of the annual interest of your loan mortgage, and can result in significant savings for homeowners. For example, if you have a $200,000 mortgage with an interest rate of 4%, a mortgage credit certificate in Mississippi could save up to $3,200 per year.

Additional First-Time Buyer Programs

State-run programs for first-time buyers aren’t your only options for becoming a homeowner in Mississippi. The federal government also offers programs that can help, including two that let you buy a house with no money down:

• US Department of Agriculture (USDA). The USDA offers a variety of programs to help low- to moderate-income families buy homes in rural areas, including direct loans, guaranteed loans, and grants for down payments and closing costs. To be eligible, you must meet income and credit requirements and want to purchase a USDA home for sale in MS.

• US Department of Veteran Affairs (VA). The VA guarantees home loans for active-duty service members, veterans, and their spouses. These loans come from private lenders, so there may be credit score requirements, but eligible homebuyers with full VA entitlement can borrow as much as their lender is willing to loan.

• Federal Housing Administration (FHA). The FHA offers low down payment options and flexible credit requirements for first-time homebuyers that are insured by the federal government. This allows lenders to offer more favorable terms to borrowers who might not qualify for a conventional mortgage.

Between the Mississippi first-time homebuyer grants and the federal loan programs, you have a lot of options to investigate. If you need help figuring out where to start, check out the Mississippi Homebuyer Education Center. It provides free homebuyer education courses and counseling so you can navigate the process of buying a home.

First-time homebuyer Mississippi benefits

If you're a first-time homebuyer in Mississippi, you're in luck! Here are a few key advantages to buying a house in the Magnolia state.

Lower home prices

Did you know that the typical home value in Mississippi is under $165,000, well below the national figure of $354,649? The lower prices of homes in the state certainly make homeownership more attainable, but it can still be challenging to come up with the necessary funds. 

Luckily, borrowers who meet the requirements may be eligible for low-interest, government-backed mortgages, tax advantages, and homebuyer education. This can make homes here more affordable, especially if you’re investigating first-time home buyer grants in MS.

Low interest rates

In addition to lower home prices, Mississippi has lower interest rates than the national average. As of this writing, Mississippi's average 30-year fixed mortgage rate is currently around 6.91%, beating the national average of 7.02%.

Additional tips for first-time homebuyers

• The process of buying a house explained
• 22 questions to ask when buying a house
• Where to buy a property safe from climate change

Let Kin Insurance help you become a first-time homebuyer in Mississippi

First-time home buyer grants in Mississippi can make homeownership more accessible and attainable, especially if you add in the state's lower home prices, low-interest rates, and tax incentives. Using these grant programs, first-time homebuyers can save money and achieve their dream of owning a home.

But affording a home is just the first step. Once you’ve purchased it, the next step is protecting it. We offer affordable homeowners insurance in Mississippi without compromising coverage. If you're a first-time homebuyer in Mississippi or a current homeowner looking for customizable insurance coverage, we're here to help.

Contact us today to learn more about our services and see how we can get you the coverage you need.