With home prices climbing in Utah, first-time homebuyers might need a boost to gain entry into the state’s housing market. Both the median sale price and sales in the state rose in 2020, putting a squeeze on supply and affordability.
Despite these challenges, first-time buyers in Utah have affordable mortgage options and down payment assistance that can make it easier to purchase a home. Utah Housing Corporation, the state’s housing authority, is one resource for these programs, many of which are aimed at first-time buyers with low to moderate incomes.
Utah first-time homebuyer loan programs
Utah Housing Corporation (UHC or Utah Housing) has four mortgage programs available to first-time homebuyers, with some also open to repeat buyers. These 30-year fixed-rate loans range from FHA and VA loans to conventional loans, and down payment assistance can be combined with any of the programs. Here’s a breakdown of each:
Utah Housing FirstHome and Home Again loans
The Utah Housing FirstHome Loan is designed for first-time buyers and eligible single parents or veterans, and tends to boast the lowest interest rate among the agency’s programs. Utah Housing’s Home Again Loan is available to both repeat homebuyers and first-time buyers who don’t qualify for a FirstHome Loan. Unlike many first-time buyer loan programs, no homebuyer education course is required to qualify for a FirstHome Loan.
Borrower requirements:
- 660 minimum credit score
- Maximum debt-to-income ratio based on FHA or VA loan requirements; if applying with a co-signer, the co-signer’s DTI ratio can’t exceed 45 percent
- Must meet Utah Housing income limits
Property requirements:
- Must be an owner-occupied single-family home, manufactured home or FHA-approved condominium or planned unit development (PUD); can be an owner-occupied duplex for Home Again Loan
- Must be one acre or less (or five acres or less if in a rural area) for FirstHome Loan; no acreage limits for Home Again Loan
- Must meet Utah Housing purchase price limits for FirstHome Loan; no purchase price limits for Home Again Loan
Utah Housing Score Loan
Utah Housing’s Score Loan helps make homeownership possible for first-time and repeat buyers who have a poor credit history and a low to moderate income. Repeat buyers must not own any other property at the time of closing to be eligible for this type of loan.
Borrower requirements:
- 620 minimum credit score
- Maximum 45 percent debt-to-income ratio
- Must complete homebuyer education course
- Must meet Utah Housing income limits
Property requirements:
- Must be an owner-occupied single-family home
- No acreage limits
- Must meet Utah Housing purchase price limits
Utah Housing NoMI Loan
Available to first-time and repeat homebuyers, Utah Housing’s NoMI Loan (no mortgage insurance) offers the lowest mortgage payment among the agency’s programs because there is no mortgage insurance requirement.
Borrower requirements:
- 3 percent down payment
- 700 credit score minimum
- Maximum 50 percent debt-to-income ratio
- Must complete homebuyer education course
- Must meet Utah Housing income limits
Property requirements:
- Must be an owner-occupied single-family home
- No acreage limits
- No purchase price limits
Utah down payment assistance
Utah Housing Down Payment Assistance
First-time homebuyers can combine a Utah Housing down payment assistance second mortgage with one of the agency’s first mortgage programs. The second mortgage is a 30-year, fixed-rate loan with an interest rate 2 percent higher than the rate of the first mortgage. The amount of assistance, which can be used for a down payment and closing costs, varies based on the type of first mortgage:
| Loan type | Assistance |
| FirstHome Loan or Home Again Loan | Up to 6% |
| Score Loan | Up to 4% |
| NoMI Loan | Up to 5% |
Salt Lake City Plus Down Payment Assistance
Homebuyers in the Salt Lake City area could qualify for up to $14,000 in down payment assistance in the form of a forgivable, deferred loan from the Community Development Corporation of Utah (CDCU). Borrowers can put these funds toward a down payment or closing costs.
If buying in Salt Lake County, the borrower must be a first-time homebuyer to qualify, defined as someone who hasn’t owned a home in the past three years. Additional eligibility requirements include:
- Maximum 45 percent to 50 percent debt-to-income ratio
- Must contribute $1,000 to the purchase
- Must complete homebuyer education course and HUD counseling session
- Must meet CDCU income limits
Note that in 2021, Salt Lake County down payment assistance funds are limited, and the program is also confined to specific areas within the county. Be sure to check your eligibility before you apply.
Chenoa Fund Down Payment Assistance
First-time and repeat homebuyers can also obtain a down payment assistance loan through the Chenoa Fund, an affordable housing program from the CBC Mortgage Agency, which is owned by the Cedar Band of Paiutes in Utah. The Chenoa Fund makes assistance available nationwide (except for in New York), not just to borrowers in Utah.
The down payment loan comes is a second mortgage that can be combined with an FHA loan for up to 5 percent in assistance. The second mortgage can be either over a 10- or 30-year term, and have as little as no interest.
The eligibility requirements include:
- 620 or 640 minimum credit score (depending on program)
- Maximum 50 percent debt-to-income ratio (depending on program)
- Must meet income limits (depending on program)
Note that the Chenoa Fund typically offers down payment assistance for conventional loans as well, but that program has been suspended due to the pandemic.
Other first-time homebuyer loan programs
Government loan programs such as FHA, VA and USDA mortgages offer terms and rates that can make it easier for first-time homebuyers to purchase a home. Your mortgage lender can guide you through other specialized home loan and assistance options. Visit Bankrate’s first-time homebuyer programs guide for a comprehensive list of loans.
For other Utah homeownership programs, including by city or county, visit HUD.gov.
Get started
Now that you have a better idea of the mortgage and down payment assistance options available for first-time homebuyers in Utah, it’s time to make your next move. An approved Utah Housing Corporation mortgage lender can help you find a loan that suits your needs and get the application process started. Terms and interest rates vary from lender to lender, so make sure to compare loan options to find the best loan for you.
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