Blog | Archives for December 2025

Homebuyer Grants and Down Payment Assistance Programs: Making Homeownership More Accessible for Buyers of All Levels

The dream of homeownership often feels out of reach, especially for first-time buyers and those with limited savings. The biggest hurdle? The upfront, out-of-pocket funds needed for the down payment and closing costs.

By Kiley Belanga
December 18, 2025

Fortunately, there are a significant number of programs available that exist to address this challenge. Homebuyer grants and down payment assistance programs are powerful tools that make the path to owning a home more accessible for buyers of all levels.

What are Down Payment Assistance Programs and Homebuyer Grants?

Down payment assistance (DPA) programs are often offered by state and local housing agencies and non-profits and are designed to provide financial aid to cover the initial expenses of buying a home.

Who Qualifies for Down Payment Assistance?

While eligibility requirements vary by program, most down payment assistance and grant initiatives focus on helping those who need it most. This includes:

Income Limits: Most programs offer assistance to low-to-moderate income buyers. Your household income usually must be at or below a certain parentage of the Area Medium Income for your desired location.

First-Time Buyer Status: Many programs prioritize first-time buyers. This is not limited to someone who has never owned a home before. The definition of a first-time buyer extends to someone who hasn’t owned a home in the last three years. There are still some programs available to repeat buyers as well.

Credit Score: A minimum credit score is often required for these programs, typically in the 620-640 range, though this can vary based on each specific program’s requirements.

Property Type and Location: Programs may have limits on the maximum purchase price of the home and may be targeted to specific geographic areas.

To make homeownership more accessible, there are state-specific programs available in the markets that you are looking for:

Florida

Florida Housing Homebuyer Program: Offers 30-year fixed-rate first mortgage loans and access to several second mortgage programs for down payment and closing cost assistance (DPA).

Florida Hometown Heroes Program: Provides down payment and closing cost assistance (up to 5% of the loan amount with a max of $35,000) to eligible full-time working professionals in Florida, including military personnel, veterans, law enforcement, educators, healthcare workers, and more.

Florida Assist (FL Assist): A second mortgage program offering up to $10,000 in DPA as a 0%, non-amortizing, deferred loan. Repayment is deferred until the home is sold, refinanced, or the first mortgage is satisfied.

HFA Preferred and HFA Advantage PLUS Second Mortgage: Offers 3%, 4%, or 5% of the total loan amount as a forgivable second mortgage when used with a Florida Housing conventional first mortgage.

Maryland

Maryland Mortgage Program (MMP) 1st Time Advantage: Provides competitive, low-interest rate 30-year fixed-rate loans for first-time homebuyers and repeat buyers in targeted areas.

Maryland SmartBuy 3.0: A unique program that helps eligible homebuyers with student debt purchase a home. It can provide up to 15% of the home’s purchase price (maximum $20,000) to pay off student debt, plus down payment assistance. The student loan payoff is a zero-interest, deferred loan forgivable after five years.

MMP Down Payment Assistance Options (1st Time Advantage 6000/Flex 5000/3%/4%/5%): These options provide funds for down payment and closing costs, typically as a zero-interest, deferred second mortgage that is repayable upon sale, transfer, or refinance.

HomeAbility: Designed to assist homebuyers with disabilities, offering a first mortgage and a secondary zero-interest loan (up to $45,000) to cover down payment and closing costs.

North Carolina

NC 1st Home Advantage Down Payment: A DPA option available with the NC Home Advantage Mortgage™ for first-time buyers or military veterans, offering $15,000 as a 0%, deferred second mortgage. It is forgiven over years 11-15, with full forgiveness at the end of year 15.

NC Home Advantage Mortgage™: A separate DPA option offering assistance up to 3% of the loan amount for both first-time and move-up buyers.

South Carolina

SC Housing Homebuyer Program: Provides competitive, fixed-interest rate mortgages to eligible low-to-moderate income homebuyers, often used in conjunction with a Down Payment Assistance (DPA) option.

Palmetto Home Advantage: Available for first-time, move-up, and repeat buyers across all counties, offering forgivable down payment assistance options of 0%, 3%, or 4% of the loan amount.

County First Initiative: Offers a special fixed interest rate and forgivable Down Payment Assistance (DPA) to promote homeownership in previously underserved counties.

Tennessee

THDA Great Choice Home Loan: The Tennessee Housing Development Agency (THDA) offers this 30-year fixed-rate mortgage loan for first-time homebuyers, as well as repeat buyers in targeted areas or military members.

THDA Great Choice Plus: This DPA is a second mortgage that must be used with a Great Choice Home Loan. It has two options:

Deferred Option: Up to $6,000 at 0% interest, deferred for the 30-year term and then forgiven.

Amortizing Option: Up to 5% of the sales price up to $15,000 with a monthly payment over 30 years, and the interest rate is the same as the first mortgage.

THDA Homeownership for Heroes: Offers the benefits of the Great Choice program plus a reduced interest rate to veterans, active-duty military, and first responders.

District of Columbia (DC)

DC Open Doors: A program for qualified first-time and repeat homebuyers, offering home purchase loans, and down payment/closing cost assistance via a Down Payment Assistance Loan (DPAL). The DPAL is a deferred, 0% interest, non-amortizing second loan.

DC4ME: Provides first-trust mortgages at a reduced interest rate for qualified DC government employees. It also includes an option for DPA of up to 3% of the home price as a 0% deferred loan

Home Purchase Assistance Program (HPAP): Provides deferred interest-free loans for down payment and closing cost assistance to eligible, first-time, low-to-moderate-income homebuyers.

Virginia

Virginia Housing Down Payment Assistance (DPA) Grant: A true grant for eligible first-time homebuyers, covering 2% to 2.5% of the purchase price toward the down payment that never needs to be repaid. Buyers must contribute at least 1% down.

Virginia Housing Plus Second Mortgage: Offers DPA as a second mortgage for first-time and repeat homebuyers. It can also cover part of the closing costs for eligible borrowers.

Virginia Housing Closing Cost Assistance Grant: To help reduce the out-of-pocket expenses during the homebuying process, this grant helps cover the extra costs that come with buying a home.

Don’t let the savings barrier hold you back from your homeownership journey. These are just some of the many grant and down payment assistance options available. Contact a Southern Trust Loan Officer for assistance navigating different programs available and what would best help you with finding your next home.

Additional requirements and qualifications may apply for each state’s Down Payment Assistance and Homebuyer Grants. Consult with your loan officer to see if you qualify.

Blog | Archives for December 2025

FHA Loans: What You Need To Know

As one of the most popular loan options available for First-Time Homebuyers, the FHA Loan provides many great benefits when it comes to buying your dream home

By Kiley Belanga
December 16, 2025

What is an FHA Loan?

An FHA Loan is a type of mortgage loan that is insured by the Federal Housing Administrations (FHA). FHA Loans have more flexible qualifying guidelines than that of a conventional loan, allowing for many great benefits like:

Low Down Payment Requirements: You can secure your loan with as little as 3.5% down, compared to the typical 5% for many conventional loans.

Higher Debt-to-Income (DTI) Ratio: A more generous DTI Limit, sometimes up to 50% or more, helps borrowers with other monthly payments, like car or student loans, qualify for a mortgage.

Flexible Credit Requirements: Borrowers may qualify with less-than-perfect credit. However, a lower score may require a slightly higher down payment than the minimum.

Competitive Interest Rates: Buyers can enjoy stable monthly payments with competitive, fixed interest rates.

Gift Funds Allowed: Borrowers can utilize gift funds from eligible sources to help cover their down payment and closing costs.

These benefits significantly lower the barrier to entry into the housing market, making the dream of homeownership achievable for more people.

What are the Key Requirements for an FHA Loan?

While FHA Loans are flexible, they do have specific requirements. In addition to the property needing to be your primary residence and having proof of steady income and employment, you will need to consider:

Mortgage Insurance Premium (MIP): All FHA Loans require an MIP. This includes an upfront premium and an annual premium. Unlike Conventional Loans, the annual premium is typically required for the life of the loan, however, many borrowers choose to refinance later to remove it.

Down Payment and Credit Requirements: Your FICO score determines the minimum required down payment.

FICO score of at least 580: Qualifies for the minimum 3.5% down payment

FICO Score between 500 and 579: Requires a 10% down payment

Debt-to-Income Ratio: While exceptions exist, your total monthly debts should generally not exceed 43% of your gross monthly income

Worried you might not meet all the requirements? Talk with one of our experienced Loan Officers today, there are still options and strategies to get you to the closing table!

What are the property requirements for an FHA Appraisal?

When purchasing a home with an FHA Loan, the property must meet the FHA’s Minimum Property Standards (MPS) for safety, security, and structural soundness.

Your FHA-approved appraiser will look for common issues like:

Missing handrails or exposed wiring (safety hazards)

Peeling paint (especially in homes built before 1978 due to lead concerns)

Non-functional or deficient utilities like heating, water heater, or electrical

Signs of active water damage or structural issues

Important Note: If your appraiser flags a necessary repair, it usually must be completed before the loan can close.

Additional Info You Should Know

Do FHA Loans have Loan Limits?
Yes, FHA Loans have maximum loan limits that vary by county and are updated annually by the Department of Housing and Urban Development. Most areas have a baseline limit, but high-cost areas usually have a higher limit. Before you start looking for homes, it is important to confirm the current loan limit for your area.

What is the FHA Amendatory Clause?
Another benefit of using an FHA loan is that it prevents you from overpaying for the property is the Amendatory Clause. This clause is included in your sales contract and offers you protection if the home’s appraised value comes in lower than the agreed-upon sales price. Meaning if your FHA appraisal is low, you will be allowed to cancel the contract and receive your earnest money deposit (EMD) back or renegotiate the purchase price with the seller.

If you are looking to start your homebuying journey, an FHA Loan, especially when paired with local grant and down payment assistance programs, is a powerful mortgage option for those looking to break into the housing market. Get started with one of our loan officers today!

Please visit hud.gov for more information about FHA Loans and how they may benefit you.

Blog | Archives for December 2025

Virginia Housing Announces $10,000 Community Heroes Grant

Virginia Housing’s Community Heroes Grant becomes available today, December 11, 2025!

By Kiley Belanga
December 11, 2025

This Homebuyer Grant provides eligible first-time homebuyers who work in vital, community service-oriented roles, such as education, public safety, military, and healthcare with funds to help with the down payment and closing costs.

Continue reading for more information about this amazing opportunity from Virginia Housing!

About the Community Heroes Grant:

The grant is exactly $10,000, and the best part is: it’s a gift from Virginia Housing, not a loan. This means it does not have to be repaid! This grant can be used when any of the following VH options are being used (as allowable for the program and with VH requirements):

SPARC Rate Reduction
FirstHome Dream Rate Reduction
Plus Second Mortgage
DPA Grant
CCA Grant

Who is Eligible?

The grant is available to first-time homebuyer (or homebuyers who have not owned or occupied a primary residence in the last 3 years) working in a community-service role. Eligible professions include:

Educators (Teachers, Administrators, Staff)
Law Enforcement Officers
Firefighters
First Responders (EMTs, Paramedics)
Military Personnel (Active Duty, Reserves, National Guard)
Heathcare Workers (Nurses, Doctors, Technicians)

What are the Key Requirements?

First Mortgage Requirement: The grant must be used in conjunction with a Virginia Housing First Mortgage loan Product.
Lender Requirement: You must work with a Virginia Housing-approved lender, like Southern Trust Mortgage
Homebuyer Education: All first-time homebuyers must complete a Virginia Housing-approved Homebuyer Education Course.
Community Heroes Certification: All borrowers must complete and sign the required Community Heroes Certification Form.
Documentation: Borrowers must provide employment and income documentation to verify they meet the Community Heroes definition and Virginia Housing’s standard borrower qualifications. (Additional documentation may be requested if needed.)
Income Limits: Borrowers must meet Virginia Housing’s Standard / Bond income limits. Click here to see the current income limits.
Additional Requirements: Other program requirements apply. The best way to confirm your eligibility is to contact a loan officer.

Ready to Claim Your Grant? Act Fast!

Funds are limited! Don’t miss out on this $10,000 grant that can help make homeowership a reality. Contact us today to find out if Virginia Housing’s Community Heroes Grant is right for you and get started on your journey to homeownership today!

Blog | Archives for December 2025

Renting vs. Buying : The Pros and Cons

If you have been renting for some time, you may be wondering if it’s time to purchase your own place. No matter your reasons for renting or buying, both options have their benefits and drawbacks.

By Southern Trust Mortgage
December 4, 2025

The Benefits of Renting

Less Maintenance Responsibility: The cost of property maintenance is factored into your monthly rent payment. Your landlord is typically responsible for major repairs to keep the property livable, such as issues with heating, plumbing, and water. Always check your rental agreement to confirm what repairs your landlord is responsible for.

Access to Amenities: Many rental properties include amenities such as swimming pools, gyms, and community areas. The cost of maintaining these areas is typically included in your rent payment.

Greater Flexibility to Move: While your rental agreement is a binding contract, leases are usually only valid for a certain length of time (typically one year). At the end of your lease, you can decide if you want to move or stay. Should you need to move sooner than expected, breaking your lease or subletting is typically less expensive than selling a home.

The Cons of Renting:

Limited Personalization: Restrictions on how you can decorate a rental home vary from property to property. Most landlords stipulate that any cosmetic changes made to a property, like painting or inserting nails into walls, need to be reverted or repaired prior to moving out. If your landlord determines the property has not been returned to its original state, they may hold back a portion or all your security deposit to make the necessary repairs.

Unstable Costs: Your rent can increase significantly at the end of your lease. This means a once affordable apartment may no longer be budget-friendly, potentially forcing you to move more often than you anticipated.

Lack of Financial Benefit: While your monthly payment is comparable to a mortgage, you miss out on some of the most valuable benefits of owning a home, such as building equity and accessing potential tax benefits.

The Benefits of Homeownership:

A Long-Term Investment: Your monthly mortgage payment goes towards paying off your loan. The amount you pay off is called equity, and options are available to you to use equity for your own financial benefit. If you sell your home for more than you paid for it, you may walk away with a profit. Alternatively, you can convert your home into a rental property, allowing you to collect monthly income.

Financial Stability: Unlike rent, if you have fixed-rate mortgage, your principal and interest payment doesn’t change from year to year. However, property taxes and homeowner’s insurance can change, which may cause small fluctuations in your total monthly payment.

Freedom to Personalize: When you own your home, you can paint, remodel, and decorate without having to worry about restoring things when you move out. Keep in mind you will need to follow local building codes and obtain any necessary permits before starting any major project.

Some neighborhoods are governed by a Homeowners Association (HOA), which do have rules or guidelines for residents to follow. Before buying a home in an HOA, read the rules and determine if they are something you are willing to comply with.

The Cons of Owning a Home:

High Upfront Costs: One of the biggest reasons people choose to rent over buying is the high upfront cost. While the initial fees are significant, there are loan options starting with as little as 3.5% down with an FHA Loan and plenty of down payment and closing cost assistance programs available when buying a home. Connect with a Southern Trust Mortgage Loan Officer to see what you may qualify for.

Additional upfront costs include:

Property taxes

Mortgage Insurance

Home Inspection Costs

First-Year Homeowner’s Insurance Premium

Title Search

Title Insurance

Points (optional prepaid interest on the mortgage)

Full Responsibility for Maintenance and Repairs: If your air conditioner breaks or the basement floods, the responsibility of fixing and paying for the repair falls entirely on the homeowner. Unlike renting, there is no landlord to call. You must be prepared to handle both routine upkeep and emergency costs.

When buying a home, you have the option to purchase a home warranty. This warranty can help cover the repair and replacement costs for major appliances and home systems like plumbing and electrical.
Important Note: Be sure to read your home warranty contract carefully to understand your coverage, deductibles, and limits, as warranties do not cover all issues.

There are many other factors to consider when deciding whether to rent or buy, and every buyer’s situation is unique. At Southern Trust Mortgage, we have a team of specialists and experts available to help you decide whether homeownership is the right choice for you and your family or what steps you would need to take to make it possible. Contact us to be matched with a local lender to help make home happen for you!

Blog | Archives for December 2025

2026 Conforming Loan Limits: What the New $832,750 Max Means for Homebuyers

The Federal Housing Finance Agency (FHFA) has officially released the 2026 Conforming Loan Limit (CLL), bringing great news for prospective homebuyers!

By Kiley Belanga
December 1, 2025

For most of the U.S., the baseline limit for a one-unit property has increased to $832,750, up $26,250 from 2025. This means more borrowers can access affordable conventional financing, providing more buying power in the 2026 housing market.

What does this increase mean for 2026 homebuyers? Read on for the full breakdown.

Understanding Conforming Loan Limits (CLL)

The conforming loan limit is the maximum amount of money a homebuyer can borrow when using a conventional loan. A conventional loan is a mortgage not backed or insured by a government agency (like the FHA or VA). Each year, the Federal Housing Finance Agency (FHFA) evaluates and adjusts the limit based on the national average home price.

While most areas fall under the baseline limit, areas with above-average home prices will have higher high-cost area limits. This maximum limit for a one-unit property in a high-cost area is set at 150% of the baseline limit ($1,249,125). A higher loan limit gives borrowers more purchasing power without having to apply for a Jumbo Loan.

Here is a breakdown of the 2026 Conforming Loan Limits based on property type:

Property Type	Baseline Limit (Most Areas)	High-Cost Area Limit (Maximum)
One-Unit	$832,750	$1,249,125
Two-Unit	$1,066,250	$1,599,375
Three-Unit	$1,288,800	$1,933,200
Four-Unit	$1,601,750	$2,402,625

To find the specific loan limits for your county, please visit the official FHFA website: https://www.fhfa.gov/document/data/fullcountyloanlimitlist2026_hera-based_final_flat.xlsx

Conforming Loans vs Jumbo Loans: What’s the Difference?

The FHFA’s conforming loan limits apply to conventional loans, which must also meet the guidelines set by Fannie Mae and Freddie Mac the government-sponsored enterprises that purchase mortgages from banks and lenders.

The standard requirements for Conforming Loans are:

A Minimum Credit Score of 620

Minimum of 3% Down Payment

Debt-to-Income Ratio of 43% or lower

Please note: Conventional Loan requirements may vary between lenders.

Conventional mortgages that exceed the Conforming Loan Limit are referred to as Jumbo Loans.

Jumbo Loans typically require:

A minimum down payment of 10%-20%.

Higher Minimum Credit Score Requirements

Jumbo rates are higher than conforming

Southern Trust Advantage: ARM Options for More Flexibility

If your purchase sits above the new conforming limit, Southern Trust offers adjustable-rate mortgages (ARMs) that can provide lower introductory payments.

Example: 5/1 ARM

Fixed, lower rate for the first 5 years
Adjusts annually in years 6–30 based on market conditions

This can be a smart strategy for buyers planning to move, refinance, or simply want a lower initial payment.

More Buying Power: What the 2026 Limit Increase Means for You

The higher conforming loan limit means more buying power for both buyers and existing homeowners in the new year.

For Homebuyers: The 3.26% increase for the new limit of $832,750 means more housing inventory is now available to homebuyers who qualify for conventional loans. You can now shop for slightly more expensive homes while keeping the benefits of a conventional loan.

For Homeowners (Refinancing): The higher limits don’t just help new buyers; they also benefit homeowners looking to refinance. If your current loan balance was just above the 2025 limit ($806,500), the new 2026 limit of $832,750 may now allow you to access the lower rates and requirements of a conventional refinance, potentially saving you thousands.

If you have been thinking of making the move, make 2026 your year!

Ready to take advantage of the new 2026 Conforming Loan Limits? Contact a Southern Trust Mortgage Loan Officer today to get started and see how much home you can afford today!