Nebraska First-Time Home Buyer: 2023 Programs and Grants

What to know about buying a house in Nebraska

If you’re a Nebraska first-time home buyer, you 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 qualified first-time buyers. Indeed, the Nebraska Investment Finance Authority says some people 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...)

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

Nebraska home buyer overview

The median home price in Nebraska was $279,000 in March 2023, according to Redfin. That was up by 6.5% from 2022. This increase in home prices reflects a more significant trend in the Midwest, as more people look to move away from crowded cities and into more affordable areas.

Additionally, Nebraska’s strong economy and low unemployment rate have made it an attractive destination for those seeking a better quality of life. As a result, the housing market in the state has become increasingly competitive, with homes often receiving multiple offers and selling above the asking price.

Nebraska 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 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 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 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 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 or real estate agent 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) assists first-time home buyers in Nebraska by offering a variety of resources and programs, such as the Homebuyer Assistance Program (HBA), which provides down payment and closing cost assistance via a low-interest second mortgage.

NIFA also collaborates with approved lenders to provide competitive first mortgage loan products such as conventional, FHA, VA, and USDA Rural Development loans. Participants must complete a home buyer education course to better understand the home buying process.

NIFA Homebuyer Assistance Program (HBA)

The NIFA Homebuyer Assistance Program (HBA) provides a low-interest mortgage and down payment assistance. First-time homebuyers (those who haven’t owned a home in the last three years), qualified veterans, or purchasers in a target neighborhood are all eligible for the program. You can obtain a 30-year conventional, FHA, VA, or USDA loan through HBA.

If you have at least $1,000 to put toward the purchase, you might be eligible, though it depends on the kind of loan you’re getting and your closing costs. Other eligibility requirements include:

• 640 minimum credit score with a debt-to-income (DTI) ratio of 45%, or 660 minimum credit score with a DTI ratio of 50%
• Complete home buyer education class
• Meet NIFA income limit of $145,000
• Meet NIFA purchase price limits of $427,000
• Occupy the property as a primary residence within 60 days of closing

NIFA First Home Program

First Home offers competitive mortgage rates for those with sufficient savings to cover a typical down payment. And, if you’re buying in a designated target area (one that’s 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 a NIFA-approved lender
• Complete a home buyer education course before closing

NIFA First Home Targeted Program

In Nebraska, the Nebraska Investment Finance Authority (NIFA) created the NIFA First Home Targeted Program to help first-time homebuyers buy homes in certain target areas. Most of the time, these areas are struggling economically, and the goal of the program is to bring them back to life by encouraging people to buy their own homes.

The program focuses on specific areas within Nebraska that are designated by NIFA and the U.S. Department of Housing and Urban Development (HUD).

• Adams County
• Douglas County
• Jefferson County
• Lancaster County
• Scotts Bluff County

These targeted areas usually have higher income and purchase price limits than non-targeted regions, enabling a broader range of homebuyers to participate in the program.

NIFA Military Home Program

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.

Nebraska first-time home buyer grants

NIFA First Home Grant Program

The NIFA First Home Grant Program is designed to help first-time home buyers who qualify for its HBA first mortgage. If eligible, you may also qualify for up to $10,000 to be applied toward the down payment and closing costs. Although the program is called a grant, the truth is slightly more complicated.

NIFA doesn’t offer a grant to cover the difference between your $1,000 minimum contribution 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 primary 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 walk 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.

Other Nebraska first-time homeownership assistance programs

You should also look into your county or city’s down payment assistance programs. One of them may have a better deal for you.

Additionally, specialized loans may help some borrowers afford homeownership, such as the Northern Ponca Housing Authority, which runs home buyer programs for Native Americans in select areas of northeastern Nebraska.

Buying a home in Nebraska’s major cities

All three of Nebraska’s biggest cities are relatively affordable for first-time home buyers. But home prices there are rising quickly. In addition, Lincoln and Omaha both offer their own home buyer assistance programs for eligible buyers.

Omaha first-time home buyers

In April 2023, the median list price of homes in Omaha was $275,000, which was an increase of 10% 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
• $55,000 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 homeownership 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 April 2023, the median list price of homes in Lincoln, NE, was $315,000. That was an increase of 14.5% 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:

• $9,450 for 3% down payment
• $63,000 for 20% down payment

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

You must begin with a home buyer education program, during which NeighborhoodWorks should determine whether you’re in line for down payment assistance. If so, 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.

Bellevue first-time home buyers

In April 2023, the median list price of homes in Bellevue, NE, was $273,500 That was an increase of 8.7% 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:

• $8,205 for 3% down payment
• $54,700 for 20% down payment

We searched the City of Bellevue’s website but could find no trace of a down payment assistance program. You can call City Hall at (402) 293-3000 to ensure we didn’t miss one. Failing that, you should explore the NIFA offerings (above) available statewide.

Where to find home buying help in Nebraska

All the organizations we’ve listed above should provide free advice 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

• Statewide The Nebraska Investment Finance Authority (NIFA): First-time home buyer loans and down payment and closing costs assistance for Nebraska residents
• Nebraska Affiliates of Habitat for Humanity: Through volunteer labor, builds and rehabilitates houses for families in need
• Northern Ponca Housing Authority: Programs for Native Americans in select areas of Northeastern Nebraska
• U.S. Department of Agriculture Rural Housing: Homebuyer programs in rural communities

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 the down payment, interest rates, homeowners insurance, and property taxes affect your monthly mortgage payments.

When you’re ready to start the home-buying process, get personalized rate quotes from at least three mortgage lenders.

Don’t just look at advertised rates online; apply for preapproval and compare the interest rates and fees offered. That’s the only way to know you get the best deal 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)