Nebraska First-Time Home Buyer: 2023 Programs and Grants

By: Peter Warden
July 22, 2022 - 7 min read

What to know about buying a house in Nebraska

Nebraska first-time home buyers have access to a variety of helpful programs. The Cornhusker State offers several down payment assistance programs, as well as special mortgages with below-market interest rates, to qualifying first-time buyers. Indeed, the Nebraska Investment Finance Authority says some can buy a home with a personal cash contribution of just $1,000. Here’s what you need to know.

In this article (Skip to...)

Nebraska home buyer overview

The median home price in Nebraska was $286,700 in June 2022, according to Redfin. That was up by 12.6% from 2021. By comparison, the median home price across the U.S. was $428,380 for the same period — an increase of 11.2% year-over-year.

Nebraska home buyer stats

Average Home Sale Price in NE$286,700
Minimum Down Payment in NE (3%)$8,600
20% Down Payment in NE$57,340
Average Credit Score in NE1731
Maximum NE Home Buyer Loan2Buy a home with just $1,000 of
your own money, statewide

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 Nebraska

If you’re a first-time home buyer in Nebraska 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, 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 when you have 20% 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 military service members. Zero down payment is required. Minimum credit score varies by lender but often 620. No ongoing mortgage insurance premiums 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
  • Nebraska Investment Finance Authority loans: May include competitive interest rates or 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.

Nebraska first-time home buyer programs

The Nebraska Investment Finance Authority (NIFA) says some buyers can purchase a home with a personal cash contribution of just $1,000. Provided you qualify, the NIFA will cover the rest of your required down payment for a conforming, FHA, VA, or USDA loan. We’ll cover this in more detail in the next section.

There are also special mortgage programs available.

First Home is for those with sufficient savings to cover a normal down payment and offers very competitive mortgage rates. And, if you’re buying in a designated target area (one undergoing regeneration) you could get even more help. To be eligible, you’ll need to have an income below the income limits set by NIFA. You’ll also need to:

  • Qualify for the type of mortgage you want
  • Choose an NIFA-approved lender
  • Complete a home buyer education course before closing

Check the website for other terms and conditions.

The Military Home program is “for buyers who are actively employed by any branch of the service or for discharged Qualified Veterans under conditions other than dishonorable.” In some circumstances, it can even help if you’re ineligible for a VA loan.

Additionally, the Northern Ponca Housing Authority runs home buyer programs for Native Americans in select areas of Northeastern Nebraska.

Nebraska first-time home buyer grants

So, what about that $1,000-down offer? Well, you’ll have to clear the same hurdles as someone using the First Home program — except for the minimum down payment requirement.

NIFA doesn’t offer a grant to cover the difference between your $1,000 and the lender’s down payment requirements. Instead, it lends you the money in the form of a 10-year second mortgage. So you have to repay the amount you borrowed in equal monthly installments over that period.

You can borrow up to 5% of your next home’s purchase price, up to $10,000.

The good news is that the interest rate on that second mortgage was, at the time we visited the website, only 1 percent. The bad news is that you’ll likely be paying standard market rates — or even a bit more — for your main mortgage. In other words, you don’t get the below-market interest rate offered under First Home.

This is pretty complicated stuff. Your best bet is to contact an approved lender, who can tell you whether you’re eligible and talk you through the process. Alternatively, NIFA has a web tool, “Am I Eligible for a NIFA Loan?,” to help you determine online whether you qualify. You should also check below to see if you’re eligible for programs run by your city or county.

Buying a home in Nebraska’s major cities

All three of Nebraska’s biggest cities are relatively affordable for first-time home buyers. And home prices there did not grow as quickly between 2021 and 2022 as in many other metro areas. In addition, Lincoln and Omaha both offer their own home buyer assistance programs for eligible buyers.

Omaha first-time home buyers

In June 2022, the median list price of homes in Omaha was $260,000, which was an increase of 13% 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

The City of Omaha’s website offers very little guidance about its down payment assistance program. Indeed, all it says is:

“The City of Omaha contracts with Omaha 100, Inc., in order to provide home buyers enrolled in City programs with financial guidance and the underwriting necessary to make home ownership a reality. Omaha 100 works with a consortium of lenders to provide low interest rates on home loans, down payment assistance, and City-backed second mortgages. Clients are required to participate in housing education and counseling to work through credit issues in preparation for a successful mortgage loan.”

Call Omaha 100 at (402) 342-3773 or email omaha100receptionist@fhasinc.org for more information.

Lincoln first-time home buyers

In June 2022, the median list price of homes in Lincoln, NE was $274,900. That was an increase of 15.7% 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:

  • $8,250 for 3% down payment
  • $54,980 for 20% down payment

The City of Lincoln works with NeighborWorks® Lincoln “to help moderate-income people become successful first-time homeowners.”

You have to begin with a home buyer education program, during which NeighborhoodWorks should determine whether you’re in line for down payment assistance. If you are, you can borrow up to 3% of your next home’s purchase price. That purchase price could not exceed $218,500 at the time of writing (though check the program to see if limits have changed).

Unlike NIFA’s program (above), this down payment loan has a 0% interest rate and no monthly payments. Better yet, half of what you borrow can be forgiven over the first 10 years when you live in the home. But some or all of the loan must be repaid if you sell during that period.

Call NeighborWorks at (402) 477-7181 for more information.

Where to find home buying help in Nebraska

All the organizations we’ve listed above should provide advice freely to any first–time home buyer in the state of Nebraska or in their local areas.

In addition to our selection, the U.S. Department of Housing and Urban Development (HUD)3 provides a list of statewide and city resources:

Statewide and regional first-time home buyer programs in Nebraska

You can also see first-time home buyer programs by city and town on HUD’s Nebraska home buyer webpage.

What are today’s mortgage rates in Nebraska?

You can see today’s live mortgage rates in Nebraska here. You can also experiment with a mortgage affordability calculator to see how down payment, interest rates, homeowners insurance, and property taxes will all affect your monthly mortgage payments.

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: Experian.com 2022 study of 2021 data

2Based on a review of the state's available DPA grants at the time this was written

3U.S. Department of Housing and Urban Development (HUD)

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.