Homebuyer Programs in Decatur, AL (2026)
Decatur is a mid-sized city in Morgan County along the Tennessee River in northern Alabama, with a median home price around $215,000. The city stands out for having its own down payment assistance program, the Decatur H.O.M.E. Program, which covers half of the minimum required down payment or the entire closing costs for qualifying first-time buyers, with up to $15,000 available for blighted properties within city limits. Buyers can also access the AHFA Step Up and First Step programs for up to $10,000 in state-level assistance, the RCLF Easy8 program for $8,000 in additional help, and the Alabama Mortgage Credit Certificate for up to $2,000 per year in tax credits. Habitat for Humanity of Morgan County offers zero-interest mortgages on newly built homes for income-qualifying families. By stacking city, state, and nonprofit programs, Decatur homebuyers can significantly reduce their out-of-pocket costs.
Top Homebuyer Programs in Decatur
| Program Name | Type | Amount | First-Time Only | Details |
|---|---|---|---|---|
| Decatur H.O.M.E. Program | Grant | Pays one-half of minimum required down payment or entire closing costs; up to $15,000 for blighted properties | Yes | View → |
| FHA Loans | Government-Insured Mortgage | Up to FHA county loan limits ($541,287 floor to $1,249,125 ceiling for single-family in 2026) | No | View → |
| FHLBA Community Partners Product | Forgivable Loan | Up to $20,000 in home purchase assistance for down payment and closing costs | No | View → |
| FHLBA First Time Homebuyer Product | Forgivable Loan | Up to $17,500 in home purchase assistance for down payment and closing costs | Yes | View → |
| FHLBA Workforce Housing Plus+ | Forgivable Loan | Up to $15,000 in home purchase assistance for down payment and closing costs | No | View → |
| Good Neighbor Next Door (HUD) | Government Property Sale Program | 50% discount off the list price of HUD-owned homes | Yes | View → |
| Home Possible Mortgage (Freddie Mac) | Government-Guaranteed Mortgage | Up to conforming loan limits ($832,750 standard / $1,249,125 high-cost in 2026); 3% minimum down payment | No | View → |
| HomeReady Mortgage (Fannie Mae) | Government-Guaranteed Mortgage | Up to conforming loan limits ($832,750 standard / $1,249,125 high-cost in 2026); 3% minimum down payment | No | View → |
| HUD $100 Down Program | FHA-Financed HUD REO Purchase | Only $100 down payment required (vs. standard 3.5% FHA down payment). HUD may also pay up to 3% of buyer's closing costs. | No | View → |
| USDA Rural Development Loans | Government-Guaranteed Mortgage | 100% financing (no down payment required); loan amount up to appraised value | No | View → |
| VA Loans | Government-Guaranteed Mortgage | No loan limit for veterans with full entitlement (0% down at any price); partial entitlement subject to conforming limits ($832,750 standard in 2026) | No | View → |
| Habitat for Humanity of Morgan County Homeownership Program | Zero-Interest Loan | Zero-interest mortgage on Habitat-built or renovated home; monthly payments capped at 30% of gross income | No | View → |
| RCLF Easy8 Down Payment Assistance Program | Grant | Up to $8,000 in down payment and closing cost assistance | Yes | View → |
| AHFA Affordable Income Subsidy Grant | Grant | 0.50% to 1% of total loan amount | No | View → |
| AHFA First Step Program | Deferred Loan | Up to $10,000 or 4% of sales price, whichever is less | Yes | View → |
| AHFA Step Up Program | Deferred Loan | Up to $10,000 or 4% of purchase price, whichever is less | No | View → |
| Alabama Mortgage Credit Certificate (MCC) | Tax Credit | Up to $2,000 per year in federal tax credits | Yes | View → |
- Type:
- Grant
- Amount:
- Pays one-half of minimum required down payment or entire closing costs; up to $15,000 for blighted properties
- First-time only:
- Yes
- Type:
- Government-Insured Mortgage
- Amount:
- Up to FHA county loan limits ($541,287 floor to $1,249,125 ceiling for single-family in 2026)
- First-time only:
- No
- Type:
- Forgivable Loan
- Amount:
- Up to $20,000 in home purchase assistance for down payment and closing costs
- First-time only:
- No
- Type:
- Forgivable Loan
- Amount:
- Up to $17,500 in home purchase assistance for down payment and closing costs
- First-time only:
- Yes
- Type:
- Forgivable Loan
- Amount:
- Up to $15,000 in home purchase assistance for down payment and closing costs
- First-time only:
- No
- Type:
- Government Property Sale Program
- Amount:
- 50% discount off the list price of HUD-owned homes
- First-time only:
- Yes
- Type:
- Government-Guaranteed Mortgage
- Amount:
- Up to conforming loan limits ($832,750 standard / $1,249,125 high-cost in 2026); 3% minimum down payment
- First-time only:
- No
- Type:
- Government-Guaranteed Mortgage
- Amount:
- Up to conforming loan limits ($832,750 standard / $1,249,125 high-cost in 2026); 3% minimum down payment
- First-time only:
- No
- Type:
- FHA-Financed HUD REO Purchase
- Amount:
- Only $100 down payment required (vs. standard 3.5% FHA down payment). HUD may also pay up to 3% of buyer's closing costs.
- First-time only:
- No
- Type:
- Government-Guaranteed Mortgage
- Amount:
- 100% financing (no down payment required); loan amount up to appraised value
- First-time only:
- No
- Type:
- Government-Guaranteed Mortgage
- Amount:
- No loan limit for veterans with full entitlement (0% down at any price); partial entitlement subject to conforming limits ($832,750 standard in 2026)
- First-time only:
- No
- Type:
- Zero-Interest Loan
- Amount:
- Zero-interest mortgage on Habitat-built or renovated home; monthly payments capped at 30% of gross income
- First-time only:
- No
- Type:
- Grant
- Amount:
- Up to $8,000 in down payment and closing cost assistance
- First-time only:
- Yes
- Type:
- Grant
- Amount:
- 0.50% to 1% of total loan amount
- First-time only:
- No
- Type:
- Deferred Loan
- Amount:
- Up to $10,000 or 4% of sales price, whichever is less
- First-time only:
- Yes
- Type:
- Deferred Loan
- Amount:
- Up to $10,000 or 4% of purchase price, whichever is less
- First-time only:
- No
- Type:
- Tax Credit
- Amount:
- Up to $2,000 per year in federal tax credits
- First-time only:
- Yes
How to Apply
- Step 1:
Check your eligibility. The Decatur H.O.M.E. Program requires you to meet HUD low-income limits for Morgan County and to not have owned a home in the past three years. AHFA programs have their own income and credit score requirements.
- Step 2:
Complete homebuyer education. The Community Investment Corporation of Decatur (CICD) is the local HUD-certified housing counseling agency. You can also contact the Community Action Partnership of North Alabama at 256-260-3108 for homebuyer education workshops and financial counseling.
- Step 3:
Apply for the Decatur H.O.M.E. Program. Contact a Preferred Decatur H.O.M.E. Realtor or mortgage company to begin your application. For questions, call the City of Decatur Department of Community Development at (256) 351-7754.
- Step 4:
Explore the RCLF Easy8 program. Contact Renaissance Community Loan Fund's mortgage team to discuss the Easy8 program, which provides $8,000 in down payment and closing cost assistance paired with an affordable mortgage.
- Step 5:
Get pre-approved with an AHFA participating lender. To access the Step Up or First Step programs, you must work with a lender approved by the Alabama Housing Finance Authority. Visit the AHFA website for participating lenders serving the Decatur area.
- Step 6:
Consider Habitat for Humanity. If you meet low-income guidelines and need affordable housing, contact Habitat for Humanity of Morgan County at 256-340-9609. The homeownership process takes 12-24 months and requires 230 hours of sweat equity.
- Step 7:
Find a home within program limits and complete your purchase. Work with your lender and real estate agent to find a home within Decatur city limits that meets all program requirements, then finalize your application.