Louisiana first-time homebuyer grants and down payment assistance (2026)

How LHC’s Sept. 9, 2026 relaunch renamed the programs

LHC renamed and rewrote all four of its homebuyer programs on Sept. 9, 2026. If your loan was reserved before that date, your lender follows the old guidelines ⁠²⁠³⁠⁴⁠⁵.

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Keys for Service used to be limited to teachers, first responders and other service workers. HomeStart Advantage now accepts any occupation. You still cannot own another home at closing ⁠³.

What the 4% second mortgage costs you, and when it is forgiven

HomeStart Assist and HomeStart Advantage pay their 4% through a 0% interest second mortgage with no monthly payment. The whole balance is forgiven at the end of 60 months, as long as you keep living in the home and no repayment event has happened ⁠¹. The money can cover the down payment, closing costs and prepaid items. You cannot get cash back beyond your own paid-outside-of-closing costs, gifts and earnest money ⁠¹. Assist calculates the 4% on the original principal of the first mortgage; Advantage uses the final first mortgage amount ⁠²⁠³.

LHC will not subordinate its second mortgage. If you refinance the first loan or take out a home equity line before the 60 months are up, the second mortgage has to be paid off ⁠¹. Assumptions are not allowed in any HomeStart program ⁠¹.

On a $200,000 FHA loan, 4% is $8,000. Your lender funds it at closing and is reimbursed when Lakeview buys the loan ⁠¹.

HomeStart Assist income and price limits by parish

HomeStart Assist uses tax-exempt mortgage revenue bonds, so federal limits apply. For FHA, VA and USDA loans, household income can be up to 115% of area median income, or 140% in a targeted census tract. Everyone 18 or older who will live in the home counts, including a non-purchasing spouse. Louisiana does not recognize legal separation, so only a final divorce decree removes an estranged spouse ⁠¹. Conventional Assist loans are also limited to qualifying income at or below 80% of AMI ⁠¹.

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Statewide, the non-targeted limit runs from $84,900 to $107,700 for one or two people and $97,635 to $123,855 for three or more ⁠⁶.

The HomeStart Assist purchase price cap is $554,850 statewide, or $678,150 in a targeted area ⁠⁷. LHC’s Exhibit P lists the targeted census tracts by parish. East Baton Rouge alone has 37 listed tracts, and Caddo has 23. In a targeted tract, the first-time buyer rule is waived and the income and price limits are higher ⁠¹. Qualified veterans with a DD-214 are also exempt from the first-time rule ⁠¹.

The other programs use simpler limits:

• HomeStart Advantage: household income up to $125,000, and a price within the FHA loan limit ⁠³.
• HomeStart Ready: up to $99,000 in qualifying income for the borrowers on the loan, and a price within the conforming loan limit ⁠⁵.
• HomeStart Plus: 80% of AMI by household size and parish. For four people, that ranged from $53,600 in Sabine Parish and $54,150 in Allen, Winn and Washington to $83,350 in St. Tammany. It was $75,600 in East Baton Rouge and $70,900 in Orleans ⁠⁸.

HomeStart Plus in hurricane-declared parishes

HomeStart Plus uses Community Development Block Grant disaster recovery (CDBG-DR) money. It covers homes in parishes declared for Hurricane Laura (DR-4559), Hurricane Delta (DR-4570) or Hurricane Ida (DR-4611). That includes Calcasieu, Lafayette, Caddo, Ouachita, East Baton Rouge, Orleans, Jefferson and St. Tammany ⁠⁹.

• Assistance: a second mortgage of up to 20% of the purchase price, capped at $55,000, plus a closing cost grant of up to $5,000 ⁠¹.
• Forgiveness: the second mortgage is 0% and is forgiven 1/120 each month over 10 years of owner occupancy ⁠¹.
• Your money: you must put in the greater of 1% of the price or $1,500 from your own funds. Total borrower investment is capped at the greater of 10% or $10,000 ⁠⁴.
• Ratios: the housing payment must be 28% to 33% of gross income, with total DTI up to 48%. Manual underwriting is not allowed ⁠¹.
• Savings cap: after closing you can keep liquid savings worth at most six months of housing payments, not counting retirement accounts. Any excess reduces your closing cost grant ⁠¹.
• Flood zones: homes in flood zones A, AE or V are ineligible. LHC staff run an environmental review that can take up to two weeks. Flood insurance must be escrowed for the life of the second mortgage ⁠¹.

Credit, DTI, education and the recapture tax

Credit and DTI. Every HomeStart loan requires a 640 minimum credit score, and manufactured homes require 660 ⁠¹. Assist and Advantage cap DTI at 50%. Ready allows the lesser of 50% or what the automated underwriting system approves. Manual underwriting is allowed only on FHA loans, at 660 and 45% DTI ⁠¹.

Conventional loans. Fannie Mae HFA Preferred and Freddie Mac HFA Advantage borrowers at or below 80% of AMI qualify for reduced mortgage insurance. Since Sept. 14, 2026, they can also get an Affordable Income Subsidy grant from LHC of 1% of the loan at or below 50% of AMI, or 0.5% from 50.01% to 80% ⁠¹⁠⁶.

Education. As of Sept. 22, 2026, only first-time buyers must complete homebuyer education, and they must finish it before closing ⁠¹⁰. Any HUD-approved counseling agency qualifies. LHC also accepts the online courses eHome America, Framework, Home Trek and Finally! Home. It does not accept Fannie Mae HomeView, Freddie Mac CreditSmart or mortgage insurer courses ⁠¹⁰.

Recapture tax. HomeStart Assist is financed with bonds, so selling within nine years can trigger a federal recapture tax. You owe it only if you sell at a gain and your income has risen above the limit for that year. The tax is capped at 6.25% of the highest loan balance or 50% of the gain, whichever is less ⁠¹¹. Advantage, Plus and Ready do not carry this notice ⁠¹.

Mortgage credit certificate. LHC’s 2026 guide does not list a mortgage credit certificate, and LHC’s old MCC page now returns “not found.” No statewide MCC was available on Oct. 20, 2026 ⁠¹.

City programs in New Orleans and Shreveport

New Orleans. The Office of Community Development’s Direct Homebuyer Soft Second Mortgage Assistance Program lends up to $55,000 as a soft second. Alternatively, it can cover up to $5,000 of closing costs, limited to 50% of the total ⁠¹³. It is open to first-time buyers in Orleans Parish at or below 80% of AMI, which is $70,900 for four people under the city’s 2026 chart ⁠¹³. The price cap is $324,000. The loan is 0% for 10 years. If you sell or move within 5 years, you repay all of it. After year 5, 25% is forgiven, then 15% a year in years 6 through 9, and the rest by year 10 ⁠¹⁴. The city requires a 30% to 33% front-end ratio, up to 48% total DTI, an approved lender and title company, a $350 education stipend paid at closing, and the city as loss payee on your insurance ⁠¹⁴. Its page, updated July 31, 2026, reports $1 million in CDBG funds as of January 2026, with more to be added as it comes in ⁠¹³.

Shreveport. HAPPI serves first-time buyers at or below 80% of AMI who buy in one of 19 targeted neighborhoods inside city limits, including Allendale, Queensborough and Cedar Grove ⁠¹⁵. The city’s program sheet sets assistance at the lesser of 20% of the price or $10,000 for an existing home, or $20,000 for new construction. You must invest the greater of $500 or 1% of the price and complete an 8-hour education course ⁠¹⁵. That sheet was last updated in 2017, and the city does not publish repayment terms online. Confirm current amounts with an approved HAPPI lender ⁠¹⁵.

Getting a HomeStart loan through an LHC lender, step by step

1. Pick the program

   First-time buyers should compare HomeStart Assist with HomeStart Plus if the home is in an eligible parish. Repeat buyers with household income up to $125,000 can use HomeStart Advantage ⁠³⁠⁴.

2. Check your parish limits

   Look up your parish in the May 4, 2026 HomeStart Assist or HomeStart Plus income table. If you are close to the limit, check the Exhibit P targeted tracts ⁠⁶⁠⁸.

3. Choose a participating lender

   The eHPUniversity list names the approved lenders, from Hancock Whitney Bank and Red River Bank to national lenders ⁠¹².

4. Finish education before closing

   First-time buyers submit a certificate from a HUD-approved agency or an approved online course ⁠¹⁰.

5. Sign a purchase agreement

   Your lender cannot reserve funds until you have a signed contract on a specific address. If you change homes, the reservation is canceled and redone ⁠¹.

6. Gather documents

   Expect a written two-year employment verification, pay stubs from the last 30 days, child support records and prior-year tax returns. HomeStart Plus also requires ID for every adult and Social Security cards for everyone in the household ⁠¹.

7. Close within 60 days

   If your lender’s underwriter has not certified the loan within 60 days of reservation, it cancels automatically. Certified loans that run past day 60 extend automatically, with fees of 0.125% to 0.5% ⁠¹.

If one lender turns you down, you can apply with another participating lender. Switching lenders will not get you a lower locked rate ⁠¹. Other states’ programs are on the first-time homebuyer grants page, and the Louisiana page collects the state’s other guides.