Louisiana First-Time Home Buyer: 2023 Programs and Grants

October 6, 2022 - 8 min read

What to know about buying a house in Louisiana

Louisiana first-time home buyers are pretty lucky. Home prices are lower in the Pelican State than they are on average nationwide. And, in most places, they’re rising more slowly.

On top of that, Louisiana has an unusually broad selection of down payment assistance programs. If you’re eligible for one of them, you could be a homeowner sooner than you dreamed possible. Here’s how.

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Louisiana home buyer overview

The median sale price in Louisiana was $229,200 in August 2022. That was a decrease of 6.3% year-over-year, according to Redfin.

Lower home purchase prices are good news for Louisiana first-time buyers. Even more so, considering that Louisiana home prices were well below the national average of $389,500, also in August 2022.

Louisiana home buyer stats

Average Home Sale Price in LA1$229,200
Minimum Down Payment in LA (3%)$6,900
20% Down Payment in LA$45,800
Average Credit Score in LA2689
Maximum LA Home Buyer Grant3LHC: Up to $60,000 in certain parishes as a forgivable silent second mortgage

Down payment amounts are based on the state's most recently available average home sale price. “Minimum” down payment assumes 3% down on a conventional mortgage with a minimum credit score of 620.

If you're eligible for a VA loan (backed by the Department of Veterans Affairs) or a USDA loan (backed by the U.S. Department of Agriculture), you may not need any down payment at all.

First-time home buyer loans in Louisiana

If you’re a first-time home buyer in Louisiana with a 20% down payment, you can get a conventional loan with a low interest rate. And you never have to pay for private mortgage insurance (PMI).

Of course, few first-time buyers have saved enough for 20% down. But the good news is that you don’t need that much. Not by a long shot.

Borrowers can often get into a new home with as little as 3% or even 0% down using one of these low-down-payment mortgage programs:

  • Conventional 97: From Freddie Mac or Fannie Mae. 3% down payment and 620 minimum FICO score. You can usually stop paying mortgage insurance after a few years once you reach 20% home equity
  • FHA loan: Backed by the Federal Housing Administration. 3.5% down and a 580 minimum credit score. But you’re on the hook for mortgage insurance premiums (MIP) until you refinance to a different type of mortgage, move, or pay off your loan
  • VA loan: Only for veterans and service members. Zero down payment is required. Minimum credit score varies by lender but often 620. No ongoing mortgage insurance after closing. These are arguably the best mortgages available, so apply if you’re eligible
  • USDA loan: For those on low-to-moderate incomes buying in designated rural areas. Zero down payment required. Credit score requirements vary by lender but often 640. Low mortgage insurance rates
  • Louisiana Housing Corporation loans: May include super-competitive rates, mortgage credit certificates, and significant down payment assistance. More information below

Note that government loan programs (including FHA, VA, and USDA home loans) require you to buy a primary residence. That means you can’t use these loans for a vacation home or investment property.

In addition, most programs let you use gifted money or down payment assistance (DPA) to cover your down payment and closing costs. Depending on the mortgage loan you choose, you could potentially get into your new house with minimal cash out of pocket.

If you’re unsure which program to choose for your first mortgage, your lender can help you find the right match based on your finances and home buying goals.

Louisiana first-time home buyer programs

The Louisiana Housing Corporation (LHC)4 offers a wide range of assistance to first-time buyers in the state. However, these are mostly geared toward borrowers with low or moderate income.

Benefits of an LHC mortgage include:

  • “Favorable” interest rates: Competitive rates on 30-year, fixed-rate FHA, VA, or USDA loans
  • Down payment assistance (see below)
  • Mortgage credit certificates: Tax credits that could, depending on your circumstances, significantly reduce your federal taxes each year

The Louisiana Housing Corporation also offers home buyer education courses. It provides a “2-day course facilitated by a live instructor, totaling 4 hours’' at no charge. But you can choose a paid-for option if you prefer.

To discover more, there’s a request-more-information button on the website. Or you can call one of LHC’s approved lenders5.

Louisiana first-time home buyer grants

The Louisiana Housing Corporation offers several down payment assistance programs. You should check out all the options to see which one suits you best.

Each assistance program has income limits and home price limits for you to be eligible. But note that those buying in “target areas” (census tracts designated as requiring regeneration) may have higher income caps than those purchasing elsewhere. Programs have different eligibility requirements and benefits, which can be found on LHC’s website.

  • For example, the Delta 100 Program is available only in certain parishes. It offers a fixed mortgage rate of only 2% with no mortgage insurance and down payment assistance of up to 3% of the purchase price. That’s a real bargain
  • Meanwhile, Resilience Soft Second can deliver up to $60,000 in down payment and closing cost assistance in a wider selection of parishes. The “soft second” means it’s a soft second mortgage, which has a 0% interest rate and no monthly payments. If you don’t sell, refinance, or move out of the home for 10 years, that loan will be forgiven in full

LHC Mortgage Revenue Bond

In addition to the choices above, the Louisiana Housing Corporation offers two additional first-time homebuyer assistance programs that could help with down payment and/or closing costs.

  • Mortgage Revenue Bond Home (MRB Home): Fixed-rate purchase loan with an optional grant that provides up to 9% of the loan amount without interest or repayment. Grant money can be used for both down payment and closing costs
  • Mortgage Revenue Bond Assisted (MRB Assisted): Fixed-rate purchase loan with an optional second mortgage that is forgiven after three years. Eligible first-time buyers can borrow up to 4% of their purchase loan amount to cover down payment and closing costs

LHC Market Rate GNMA Program

Louisiana Housing’s Market Rate GNMA Program is similar to its MRB programs. However, it doesn’t have a first-time buyer requirement and the loan is compatible with FHA, VA, and USDA mortgages. It also comes with options for down payment assistance, provided you meet household income requirements. To find out if you qualify, visit the LHC eligibility tool.

Be sure to read up on all five of the down payment programs LHC offers. Only then can you work out the ones for which you might be eligible and from which you might benefit most.

Buying a home in Louisiana’s major cities

As you’d expect, New Orleans has the most expensive homes out of Louisiana’s three biggest cities. Shreveport’s median home prices are about half of those in the Big Easy. Baton Rouge came between the other two for both home prices and home price inflation.

New Orleans first-time home buyers

The median list price of homes in New Orleans was $359,000 in September 2022. That was an increase of 2.9% year-over-year according to Realtor.com.

If you want to buy a home at that median price, your down payment options might fall between:

  • $10,800 for 3% down payment
  • $71,800 for 20% down payment

The City of New Orleans has a down payment assistance program called the Direct Homebuyer Soft Second Mortgage Assistance Program. Eligible homebuyers are offered a deal that is similar to the LHC’s Resilience Soft Second. They may receive up to $55,000 as a forgivable second mortgage and up to $5,000 in closing cost assistance. You’ll need a modest income to qualify.

According to the city’s chart, in early 2022, those maximum incomes ranged from $39,450 for a single borrower up to $74,350 for a household comprising eight or more people. Those figures are 80% of the area median income for New Orleans and yours must be at or below that.

Baton Rouge first-time home buyers

The median list price of homes in Baton Rouge was $265,000 in September 2022. That was an increase of 10.8% year-over-year according to Realtor.com.

If you want to buy a home at that median price, your down payment options might fall between:

  • $7,950 for 3% down payment
  • $53,000 for 20% down payment

We could find no trace of an active down payment assistance program on the City of Baton Rouge’s website. But you can try calling City Hall at (225) 389-3000 to see if we missed something.

Shreveport first-time home buyers

The median list price of homes in Shreveport was $179,900 in August 2022. That was an increase of 9.1% year-over-year according to Realtor.com.

If you want to buy a home at that median price, your down payment options might fall between:

  • $5,400 for 3% down payment
  • $36,000 for 20% down payment

The City of Shreveport has a Home-buyer’s Assistance Program Participation Initiative (“HAPPI”). To qualify for this assistance program, your income must be at or below 80% of the city’s median income. Check these income eligibility figures on the city’s website. Note that income limits may have changed by the time you read this.

The program website says, “The maximum amount of [down payment] assistance is up to 20% of the sales price of the property or appraised value; whichever is lesser, depending on the percentage of area median income. Other incentives are available to applicants purchasing in designated home ownership zones approved by the Community Development Department.”

You can call Shreveport Community Development at (318) 673-5900 for more details.

Where to find home buying help in Louisiana

All the organizations we’ve listed above should provide advice freely to any first-time home buyer in Louisiana or within their local areas.

In addition to our selection, the U.S. Department of Housing and Urban Development (HUD) provides lists for statewide, regional, and local resources:

Statewide and regional home buyer assistance programs in Louisiana:

Louisiana first-time home buyer programs by city/town:

Programs by parish:

Louisiana Affiliates of The Fuller Center for Housing:

What are today’s mortgage rates in Louisiana?

You can see today’s live mortgage rates in Louisiana here.

Before you begin, you can experiment with a home affordability calculator to see how your interest rate and down payment will affect your monthly mortgage payment.

When you’re ready to start the home buying process, make sure you get personalized rate quotes from at least three mortgage lenders. Don’t just look at advertised rates online; actually apply for preapproval and compare the interest rates and fees you’re offered. That’s the only way to know you’re getting the best deal possible on your new home loan.

1Source: Redfin.com Louisiana Housing Market Report

2Source: Experian.com study of 2021 and 2020 data

3Based on a review of the state's available DPA grants at the time this was written

4Louisiana Housing Corporation (LHC)

5LHC Approved Lender List

Peter Warden
Authored By: Peter Warden

The Mortgage Reports Editor

Peter Warden has been writing for a decade about mortgages, personal finance, credit cards, and insurance. His work has appeared across a wide range of media. He lives in a small town with his partner of 25 years.