Down Payment Assistance In Wilmington: What Buyers Can Use

Buying a home in Wilmington but worried about the cash to close? You are not alone. Many first-time and move-up buyers in New Hanover County use down payment assistance and low-down loan options to get the keys. In this guide, you will learn what help is available, who qualifies, how to combine programs, and the steps to apply with confidence. Let’s dive in.

How down payment assistance works

Down payment assistance, or DPA, is not one program. It is a mix of tools that can reduce your upfront cash needs and improve affordability.

• Low or zero down first mortgages (FHA, VA, USDA, conventional 3 percent).
• State second-mortgage assistance and tax credits from the North Carolina Housing Finance Agency (NCHFA).
• Local city or county funds, often through HOME or CDBG programs, when available.
• Nonprofit programs and housing counseling support.

Each option has its own rules, income limits, and timelines. You can often pair a first mortgage with state DPA or a Mortgage Credit Certificate (MCC), and sometimes with local funds when funding is open.

Low or zero down loan options

Before you apply for separate assistance, check if a loan program already meets your needs.

• VA loans: Eligible service members, veterans, and some surviving spouses may qualify for 0 percent down and no private mortgage insurance. Learn more about VA home loan benefits.
• USDA Guaranteed Loans: Zero down financing for eligible properties in USDA-defined rural areas and for income-qualified buyers. Many city addresses will not qualify, but some suburban and rural parts of New Hanover County may. Review the USDA Guaranteed Loan program.
• FHA loans: As little as 3.5 percent down for qualified borrowers. Mortgage insurance applies and affects payment. See FHA basics on HUD’s site.
• Conventional 3 percent down: Fannie Mae’s HomeReady and Freddie Mac’s Home Possible are designed for low-to-moderate-income buyers. Conventional 97 options exist for qualified borrowers.

If one of these fits, you may not need separate DPA, or you can combine it with state assistance when allowed.

NCHFA assistance for North Carolina buyers

The North Carolina Housing Finance Agency is the main state source for down payment and closing cost help.

• Second-mortgage DPA: Typically a low-interest, deferred, or forgivable second lien that helps with down payment and closing costs. Exact terms and names change, so check current offerings on the North Carolina Housing Finance Agency site.
• Mortgage Credit Certificate (MCC): A federal tax credit for a portion of your mortgage interest paid each year. An MCC can improve monthly affordability by lowering your federal tax liability.
• Delivery through participating lenders: You apply through an approved lender, not directly to NCHFA. Homebuyer education may be required for first-time programs.

Income and purchase price limits are county-specific. Confirm New Hanover County limits and current availability with a participating lender.

Wilmington and New Hanover County local programs

Local governments sometimes offer down payment or closing cost help using federal HOME or CDBG funds. Funding is cyclical and can open or close during the year.

• Start with the City of Wilmington Housing Division for current opportunities, eligibility, and any waitlists on the City of Wilmington website.
• Check the New Hanover County community development pages for county-led programs.

Local programs often serve first-time buyers, income-limited households, or purchases in targeted neighborhoods. Assistance may be a forgivable second mortgage with resale or recapture provisions if you sell within a set period. Always review the terms before you make an offer.

Nonprofit and counseling support

Nonprofit partners can play a big role in getting you ready and lowering costs.

• Habitat-type homeownership programs sometimes offer affordable mortgages or subsidies for eligible buyers. Eligibility usually includes income limits, long-term occupancy, and participation.
• HUD-approved housing counseling agencies provide education often required by DPA programs and help you prepare a strong application. Find a counselor using the HUD counseling directory.

Counseling can help you understand budgeting, credit readiness, documents, and timing so you avoid last-minute surprises.

Who typically qualifies in New Hanover County

While every program is different, most share common rules:

• Income limits based on area median income.
• Purchase price limits by county and program.
• First-time buyer requirement for some programs, usually defined as no ownership in the past three years.
• Owner-occupancy and primary residence only.
• Homebuyer education certificate may be required.
• Use of a participating lender for state programs like NCHFA.

Programs also require you to meet standard mortgage approval guidelines for credit, debt-to-income, and property condition.

Combining programs the smart way

Many buyers stack a first mortgage with state assistance or an MCC.

• Common combinations: FHA or conventional loan plus an NCHFA second lien, or a VA/USDA loan with an MCC when allowed.
• Pairing rules vary: Some loans limit other subsidies or require specific structures. NCHFA-approved lenders can confirm what you can combine for your situation.

If you plan to stack assistance, tell your lender early. That helps them line up approvals and timelines before you write an offer.

Step-by-step: applying for assistance

Use this simple roadmap to stay on track.

1. Get prequalified with a lender and choose the best first mortgage option for you.
2. Ask if the lender participates with NCHFA and what DPA you might qualify for in New Hanover County.
3. Enroll in required homebuyer education through a HUD-approved counseling agency.
4. Gather documents: ID, Social Security numbers, recent pay stubs, W-2s, tax returns, bank statements, and later your purchase contract.
5. Submit the DPA application through the participating lender and complete any program-specific forms.
6. Coordinate closing: Your first mortgage and DPA usually close together. Build in extra time in case third-party approvals are needed.

Avoid these common pitfalls

A little planning helps you protect your approval and your timeline.

• Not checking income and purchase price limits before making an offer.
• Missing counseling or education requirements that hold up closing.
• Overlooking resale or recapture clauses attached to forgivable loans.
• Assuming DPA replaces standard underwriting. You still need to qualify for the first mortgage.
• Using a non-participating lender for state programs, which can lead to delays or denials.

Local next steps

Set yourself up for success by bookmarking the right resources and starting early.

• Review current NCHFA programs and find participating lenders on the NCHFA website.
• Check the City of Wilmington and New Hanover County sites for local openings, eligibility, and timelines.
• Schedule counseling through the HUD counseling directory if your program requires it or if you want help budgeting and preparing your file.
• If you are a veteran or active-duty, ask a VA-approved lender about benefits through the VA Home Loan program. If you plan to buy outside the city limits, explore the USDA Guaranteed Loan program.

When you are ready to start your home search, our team can help you align your home criteria with program timelines, coordinate contract dates with lender milestones, and keep your closing on track.

Ready to explore homes and navigate assistance with confidence in Wilmington and New Hanover County? Connect with Living By The Coast Realty Group for local guidance, a streamlined home search, and organized transaction support from contract to close.

FAQs

Can I use NCHFA down payment assistance with an FHA loan in Wilmington?

• Many state DPA products are designed to pair with FHA and other loan types, but rules vary, so confirm pairing with an NCHFA-participating lender.

Will assistance increase my monthly payment if I get a second lien?

• If the DPA is a deferred 0 percent second mortgage, you typically do not have a monthly payment on it, though your first-mortgage payment, taxes, and insurance still apply.

Are USDA loans available inside Wilmington city limits?

• USDA eligibility is property-specific; many city addresses are not eligible, while some suburban and rural parts of New Hanover County may qualify.

Do I have to repay assistance if I sell the home?

• It depends on the program: forgivable loans may be forgiven after a set period, deferred loans are usually repaid at sale, and grants typically are not repaid.

Can I use gift funds along with down payment assistance?

• Many mortgages allow documented gift funds, but each assistance program has its own rules, so provide a gift letter and confirm documentation needs early.

How much extra time should I allow for DPA approval in Wilmington?

• Plan for additional time because third-party approvals or program underwriting may be required, and start the process as early as possible to avoid delays.