Louisiana First-Time Home Buyer: 2023 Programs and Grants

What to know about buying a house in Louisiana

If you are a Louisiana first-time home buyer, you’re pretty lucky. Home prices are lower in the Pelican State than on average nationwide. 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 thought possible. Here’s how.

In this article (Skip to...)

• LA home buyer overview
• Home loan options
• LA home buyer programs
• First-time buyer grants
• Buying in Louisiana’s cities
• Resources
• LA mortgage rates

Louisiana home buyer overview

The median sale price in Louisiana was $247,200 in March 2023. That was a decrease of 1.3% year-over-year, according to Redfin.

Louisiana first-time home buyers will be happy to hear that prices have dropped. Plus, the national average home price in March 2023 was $375,700, as reported by the National Association of Realtors, while prices in Louisiana were significantly lower.

Louisiana home buyer stats

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 no 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 your mortgage loan, you could 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) offers a wide range of assistance to first-time buyers in the state. However, these are mostly geared toward borrowers with low or moderate incomes.

LHC mortgages offer competitive mortgage interest rates on 30-year, fixed-rate FHA, VA, or USDA loans, as well as down payment assistance options. The agency 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.

LHC Mortgage Revenue Bond programs

First-time home buyers (those who haven’t owned a home in the last three years) can get help with financing, as well as down payments and closing costs, through the Mortgage Revenue Bond programs offered by the Louisiana Housing Corporation (LHC).

Buyers have two options:

1. Mortgage Revenue Bond Home (MRB Home): Fixed-rate mortgage 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
2. Mortgage Revenue Bond Assisted (MRB Assisted): Fixed-rate purchase loan with an optional second mortgage forgiven after three years. Eligible first-time buyers can borrow up to 4% of their purchase loan amount to cover down payment and closing cost

For both programs, a credit score of 640 or higher is required, as is completing a home buyer education class. The home must be your primary residence and can’t cost more than $349,525. Approved property types include single-family homes, condos, townhomes, modulars, and manufactured homes.

To be eligible for the MRB Home Grant, your household income must be at or below 80% of the area median income (AMI).

The maximum income allowed for a forgivable MRB Assisted Loan is between 115% and 140% of the median income for the area. This amount depends on the type of loan, the number of people living in the home, and whether or not the property is in a targeted neighborhood.

LHC Market Rate Conventional Program

The Market Rate Conventional Program is open to both first-time and repeat home buyers. It has a competitive 30-year fixed rate and discounted mortgage insurance. The mortgage may also be combined with down payment assistance of up to 4%. To be eligible, you must fall within the 80 percent AMI limits and complete a first-time home buyer education course. The loan limit is $453,100, and the minimum credit score requirement is 640 for all buyers. Only single-family primary residence purchases are eligible for the loan.

LHC Market Rate GNMA Program

The Market Rate GNMA Program is equally available to both first-time buyers and people who have bought a home before. It gives qualified borrowers an FHA, VA, or USDA loan with a fixed rate for 30 years and up to 4% in down payment help. With this program, your income can be as high as 115% of the area median income, but you still need a credit score of 640 or higher to qualify (although that can vary according to the loan and lender).

LHC Delta 100 Program

First-time home buyers with bad credit can get a mortgage through the parish-specific LHC Delta 100 Program, which offers 2% interest rates, no mortgage insurance, and up to 3% in down payment and closing cost assistance. That’s a real bargain.

Better yet, the program does not have a minimum credit score requirement, but it can only be used to buy a single-family home. The property must also be located in one of several parishes:

Also, the home can’t cost more than $242,000, and your income can’t exceed 80% AMI. To qualify, you must also be able to contribute 1% of the purchase price or $1,500, whichever is less, from your own cash reserves.

Louisiana first-time home buyer grants

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

Each assistance program has income and home price limits for you to be eligible. But keep in mind that people who buy in “target areas” (census tracts that have been marked as needing to be rebuilt) may have higher income limits than people who buy elsewhere. Programs have different eligibility requirements and benefits, which can be found on LHC’s website.

LHC Resilience Soft Second Program

This LHC program 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 with 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 fully forgiven.

LHC Mortgage Credit Certificate Program

First-time homebuyers, veterans, and buyers with low to moderate incomes who purchase a home in an eligible area can claim federal tax credits of up to $2,000 per year. Limits on household income depend on how many people live there and where the property is. Buyers can claim the credit if the home serves as their primary residence.

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 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 $349,000 in March 2023. Real estate prices decreased 5.7% 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:

• $10,475 for 3% down payment
• $69,800 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.

In 2022, those maximum incomes ranged from $43,900 for a single borrower up to $82,800 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 $260,000 in March 2023. That was an increase of 6.1% 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:

• $7,800 for 3% down payment
• $52,000 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 $182,000 in March 2023. That was an increase of 8.3% 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:

• $5,675 for 3% down payment
• $37,900 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. You will find 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 its appraised value, whichever is less, 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 free advice 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 Housing Corporation: Homebuyer programs, including down payment and closing cost assistance. Review the agency’s list of approved lenders
• City of New Orleans: Homebuyer assistance programs for those who do not exceed household income limits
• City of Shreveport: Homeowner assistance programs for qualifying applicants who meet income requirements and those who are buying in designated home ownership zones
• Habitat for Humanity: Through volunteer labor, builds and rehabilitates houses for families in need
• U.S. Department of Agriculture Rural Housing: Homebuyer programs in rural communities

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

• Alexandria
• Baton Rouge
• Kenner
• Lake Charles
• Monroe
• Shreveport

Programs by parish:

• Houma/Terrebonne
• Jefferson

Louisiana Affiliates of the Fuller Center for Housing:

• Northshore
• The Fuller Center for Housing (northwest LA)
• Webster Parish

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, get personalized rate quotes from at least three mortgage lenders. Instead of looking at advertised rates online, apply for preapproval and compare the interest rates and fees offered. That is the only way to ensure you get the best deal on your new home loan.

¹Source: Redfin.com Louisiana Housing Market Report

²Source: Experian.com study of 2022 and 2021 data

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