See programs you qualify for

By Tyler Thompson · Licensed Real Estate Agent · Updated March 27, 2026

Homebuyer Programs in Decatur, AL (2026)

Population: 58,000 | Median home price: $215,000 | Est. closing costs: $4,500 - $6,500

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.

City 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 →

Decatur H.O.M.E. Program

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

State Programs in Alabama

Program Name	Type	Amount	First-Time Only	Details
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 →
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+	Grant	Up to $15,000 in home purchase assistance for down payment and closing costs	No	View →

AHFA Affordable Income Subsidy Grant

Type:: Grant
Amount:: 0.50% to 1% of total loan amount
First-time only:: No

AHFA First Step Program

Type:: Deferred Loan
Amount:: Up to $10,000 or 4% of sales price, whichever is less
First-time only:: Yes

AHFA Step Up Program

Type:: Deferred Loan
Amount:: Up to $10,000 or 4% of purchase price, whichever is less
First-time only:: No

Alabama Mortgage Credit Certificate (MCC)

Type:: Tax Credit
Amount:: Up to $2,000 per year in federal tax credits
First-time only:: Yes

FHLBA Community Partners Product

Type:: Forgivable Loan
Amount:: Up to $20,000 in home purchase assistance for down payment and closing costs
First-time only:: No

FHLBA First Time Homebuyer Product

Type:: Forgivable Loan
Amount:: Up to $17,500 in home purchase assistance for down payment and closing costs
First-time only:: Yes

FHLBA Workforce Housing Plus+

Type:: Grant
Amount:: Up to $15,000 in home purchase assistance for down payment and closing costs
First-time only:: No

Federal Programs

Program Name	Type	Amount	First-Time Only	Details
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 →
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 →

FHA Loans

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

Good Neighbor Next Door (HUD)

Type:: Government Property Sale Program
Amount:: 50% discount off the list price of HUD-owned homes
First-time only:: Yes

Home Possible Mortgage (Freddie Mac)

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

HomeReady Mortgage (Fannie Mae)

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

HUD $100 Down Program

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

USDA Rural Development Loans

Type:: Government-Guaranteed Mortgage
Amount:: 100% financing (no down payment required); loan amount up to appraised value
First-time only:: No

VA Loans

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

Nonprofit Programs

Program Name	Type	Amount	First-Time Only	Details
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 →

Habitat for Humanity of Morgan County Homeownership Program

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

RCLF Easy8 Down Payment Assistance Program

Type:: Grant
Amount:: Up to $8,000 in down payment and closing cost assistance
First-time only:: Yes

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17 programs available in Decatur. See which ones you qualify for.

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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.

Frequently Asked Questions

How much down payment assistance can I get in Decatur?+

Decatur homebuyers have access to multiple programs. The Decatur H.O.M.E. Program pays half of the minimum required down payment or the entire closing costs, with up to $15,000 available for blighted properties. The AHFA Step Up and First Step programs each offer up to $10,000 or 4% of the purchase price. The RCLF Easy8 program provides up to $8,000 toward down payment and closing costs. The Alabama Mortgage Credit Certificate adds up to $2,000 per year in federal tax credits. Combining these programs can significantly reduce your upfront costs.

Do I have to be a first-time homebuyer to qualify?+

It depends on the program. The Decatur H.O.M.E. Program and the AHFA First Step program require first-time buyer status, defined as not having owned a home in the past three years. The AHFA Step Up program is open to both first-time and repeat buyers. The RCLF Easy8 also requires first-time buyer status, though veterans and buyers in Target Areas may be exempt. Habitat for Humanity of Morgan County does not require first-time buyer status but selects applicants based on housing need.

What is the maximum home price I can purchase with assistance?+

The Decatur H.O.M.E. Program requires the home to be within Decatur city limits but does not publicly list a specific price cap beyond income eligibility. The AHFA programs have purchase price limits that vary by county and are updated annually; check the AHFA website for current Morgan County limits. The RCLF Easy8 program does not list a specific price cap beyond income requirements.

What homebuyer education is required?+

Most programs require completion of a HUD-approved homebuyer education course. The Community Investment Corporation of Decatur (CICD) is the local HUD-certified housing counseling agency and offers homebuyer education workshops. The Community Action Partnership of North Alabama also provides homeownership services and can be reached at 256-260-3108. Habitat for Humanity of Morgan County requires its own HomeWorks homebuyer education and financial literacy classes.

What makes the Decatur H.O.M.E. Program unique?+

The Decatur H.O.M.E. Program is one of the few city-funded down payment assistance programs in Alabama. It has helped over 400 families become homeowners over 17+ years. The program pays half of the minimum required down payment or covers the entire closing costs, and offers up to $15,000 for buyers purchasing blighted properties within city limits. You must work with a Preferred Decatur H.O.M.E. Realtor or mortgage company to apply.

Can I combine multiple programs?+

Yes, in many cases you can stack assistance. For example, you could use the Decatur H.O.M.E. Program for closing cost coverage, the AHFA Step Up loan for your first mortgage with up to $10,000 in down payment help, the RCLF Easy8 for an additional $8,000 in DPA, and claim the Alabama Mortgage Credit Certificate for ongoing annual tax credits. Work with your lender to determine which combination best fits your situation.

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