Alabama Housing Finance Authority: Guide to AHFA First Step & Step Up Programs

Whether you’re looking for a quiet spot near the Gulf, a front porch in the Magic City, or a home near the tech hub of the Rocket City, there is one thing every Alabamian values: community.

At TowneBank Mortgage, we believe that homeownership is the heartbeat of a strong community. But we also know that the biggest hurdle for many of our neighbors isn't finding the perfect home—it's the upfront cost of getting into it. That’s why we are proud to be an approved lender for the Alabama Housing Finance Authority (AHFA).

Through AHFA, we offer two primary programs designed to make homeownership more affordable and accessible for Alabamians: First Step and Step Up.

1. The First Step Program

Best for: First-time homebuyers with a focus on affordability.

If you’re ready to stop renting and start building equity, the First Step program is a fantastic place to begin. It’s specifically designed for first-time buyers (or those who haven’t owned a home in the last three years) who meet certain income and purchase price limits.

• Fixed-Rate Security: You get a competitive 30-year fixed-rate mortgage, so you never have to worry about your base payment changing.

• Down Payment Help: This program is often paired with down payment assistance to help lower the amount of cash you need at the closing table.

• Lower Costs: It’s built to keep your monthly payments manageable so you can focus on making your new house a home.

2. The Step Up Program

Best for: Both first-time and repeat buyers who need a boost with closing costs.

Think of Step Up as the flexible sibling to First Step. You don’t have to be a first-time buyer to use it, and the income limits are often higher, making it accessible to more families across Alabama.

• Down Payment Assistance (DPA): Step Up provides a 10-year second mortgage to help cover your down payment and closing costs.

• Ease of Entry: This is a popular choice for Alabamians who have a steady income but haven't quite saved up the full 3% or 3.5% down payment required by traditional loans.

• Combine with a Mortgage Credit Certificate (MCC): You may also be eligible to pair this with a tax credit that puts money back in your pocket every year for the life of your loan.

Why Choose a Local TowneBank Mortgage Professional?

We know you have choices when it comes to your mortgage. At TowneBank, we don't just see a loan application; we see a neighbor. Our "People-First" philosophy means we take the time to explain these programs in plain language—no confusing jargon, just honest advice.

Because we live and work right here in Alabama, we understand our local markets. We know the neighborhoods, the local real estate agents, and most importantly, we know how much a home means to an Alabama family.

Ready to take the next step toward homeownership?

Reach out today. Let's sit down, grab a coffee, and look at your options together. Whether it's First Step, Step Up, or a traditional loan, we’ll find the path that’s right for you.

At a Glance: Which AHFA Program is Right for You?