See programs you qualify for
Get Matched Free →By Tyler Thompson · Licensed Real Estate Agent · Updated March 27, 2026
Homebuyer Programs in Florence, AL (2026)
Florence is the largest city in Alabama's Shoals region, located in Lauderdale County along the Tennessee River in the northwestern part of the state. With a median home price around $235,000, Florence offers affordable homeownership opportunities. While the city does not currently operate its own down payment assistance program, buyers here can 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 toward down payment and closing costs, and the Alabama Mortgage Credit Certificate for up to $2,000 per year in tax credits. Shoals Habitat for Humanity also builds affordable zero-interest homes for qualifying families in Lauderdale and Colbert counties. By combining state and nonprofit programs, Florence homebuyers can stack meaningful assistance to reduce their upfront costs.
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 → |
- 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
- 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:
- 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 → |
- 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:
- 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
Nonprofit Programs
| Program Name | Type | Amount | First-Time Only | Details |
|---|---|---|---|---|
| RCLF Easy8 Down Payment Assistance Program | Grant | Up to $8,000 in down payment and closing cost assistance | Yes | View → |
| Shoals Habitat for Humanity Homeownership Program | Zero-Interest Loan | Zero-interest mortgage on Habitat-built home; sold at no profit | No | View → |
- Type:
- Grant
- Amount:
- Up to $8,000 in down payment and closing cost assistance
- First-time only:
- Yes
- Type:
- Zero-Interest Loan
- Amount:
- Zero-interest mortgage on Habitat-built home; sold at no profit
- First-time only:
- No
How to Apply
Step 1: Check your eligibility. Most Alabama down payment assistance programs require household income at or below specific limits for Lauderdale County. Review program-specific requirements for the AHFA Step Up, First Step, and RCLF Easy8 programs.
Step 2: Complete homebuyer education. Most programs require a HUD-approved homebuyer education course. The Community Action Agency of Northwest Alabama offers free housing counseling and quarterly first-time homebuyer classes. Contact them at 256-766-4330 at 745 Thompson Street, Florence.
Step 3: 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 4: 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. Local options include Listerhill Credit Union and Florence Federal Credit Union, both of which offer competitive mortgage products for first-time buyers.
Step 5: Consider Habitat for Humanity. If you meet low-income guidelines, contact Shoals Habitat for Humanity by mailing an application to PO Box 3135, Florence, AL 35630. They build zero-interest homes for qualifying families in Lauderdale and Colbert counties. The process requires 300 hours of sweat equity.
Step 6: Find a home within program limits and complete your purchase. Work with your lender and real estate agent to find a home that meets all program requirements, then finalize your application with your chosen assistance programs.
Frequently Asked Questions
How much down payment assistance can I get in Florence?+−
Do I have to be a first-time homebuyer to qualify?+−
Does Florence have its own city down payment assistance program?+−
What homebuyer education is required?+−
Is Florence eligible for USDA loans?+−
Can I combine multiple programs?+−
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