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About the NIFA Homebuyer Assistance Program (HBA)
The NIFA Homebuyer Assistance Program (HBA) pairs a NIFA First Home first mortgage with a second mortgage of up to 5% of the purchase price for down payment and closing costs. It is run by the Nebraska Investment Finance Authority and closed through participating lenders statewide. The second loan carries a 1% rate over 10 years, making HBA Nebraska's main low-rate assistance option for first-time buyers.
To qualify for the NIFA Homebuyer Assistance Program, household income must fall under NIFA's First Home limits, effective 7/13/2026. In most counties the limit is $105,700 for one or two people and $121,555 for three or more, rising to $114,000 and $131,100 in non-target parts of Douglas, Sarpy, Cass and Washington counties. Target areas allow more: $136,800 and $159,600 in Douglas County and $129,000 and $150,500 in Lancaster County. Buyers need a 640 credit score with a 45% maximum debt-to-income ratio, or 660 for up to 50%. You must not have owned and occupied a primary residence in the past three years, unless you are a qualified veteran or buy in a target area. The one-unit price cap is $398,000 outside target areas and $485,500 inside them. Income counts every adult borrower, co-borrower and non-borrowing spouse.
The HBA second loan is not forgiven. Monthly payments start alongside the first mortgage, and a $10,000 loan at 1% costs about $88 a month for 120 months. NIFA's program summary caps the loan at $10,000, though its 2026 pages cite only the 5% figure, so confirm the ceiling with your lender. NIFA's Welcome Home Assistance offers the same 5% second loan to repeat buyers with a $182,800 income limit, but at a higher first mortgage rate.
How much assistance
Eligibility
- Income limits: First Home limits effective 7/13/2026, by county and household size. Most counties: $105,700 (1-2 persons), $121,555 (3+). Non-target Douglas/Sarpy/Cass/Washington: $114,000 / $131,100; Lancaster: $107,500 / $123,625. Target areas: Douglas $136,800 / $159,600; Lancaster $129,000 / $150,500; Adams, Jefferson, Saline, Scotts Bluff $126,840 / $147,980.
- Purchase price limit: $398,000
- First-time buyer required: Yes — Has not owned and occupied a primary residence in the past three years. Waived for qualified veterans and for purchases in NIFA target areas; NIFA may also review cases of a home lost through divorce (no sale proceeds), natural disaster, or forced job relocation.
- Credit score minimum: 640
- Geographic restrictions: Property must be located in Nebraska. Higher income and purchase price limits apply in Target Areas. Two-unit purchase price limit is $607,000.
- Homebuyer education required: Yes
How to Apply for NIFA Homebuyer Assistance Program (HBA)
Step 1: Check income, price and target area
Look up your county's 2026 income limit on NIFA's information sheet at nifa.org, then check the address on NIFA's target area map, since target areas raise both the income limit and the price cap. Outside target areas the one-unit price cap is $398,000; inside them it is $485,500. NIFA's online eligibility tool, Quinn the QualBot, gives a quick read on whether you qualify before you call a lender.
Step 2: Take an approved homebuyer education class
First-time buyers must finish a NIFA-approved class before closing. Approved online options include Fannie Mae HomeView, Freddie Mac CreditSmart, Framework and eHome America, with other approved classes listed at nifa.org/homebuyers-renters/homebuyer-education. Certificates are valid for 12 months, so closing must happen within a year of completion. The certificate must show your name and the provider's name, and you hand a copy to your lender.
Step 3: Choose a NIFA participating lender
HBA is only available through lenders on NIFA's participating lender list at nifa.org. The lender originates the First Home first mortgage and the HBA second loan together, using a conventional, FHA, USDA Rural Development or VA first loan. Ask each lender whether it is an FHLBank Topeka member, since that decides whether you can also apply for an HSP grant. NIFA sets the rate, so compare lender fees instead.
Step 4: Get pre-approved with HBA included
Your lender checks credit, income and debts against both NIFA rules and the first mortgage's own guidelines. NIFA's minimum is a 640 score with debt-to-income up to 45%, or 660 with up to 50%. Buyers without a credit score may still qualify through manual underwriting. The HBA payment counts in your housing expense ratio, so a $10,000 second loan adds about $88 a month to the qualifying payment.
Step 5: Plan your $1,000 investment and offer
Every HBA borrower must put in at least $1,000 of their own money, and gifts are allowed under the first mortgage's underwriting rules. You cannot receive cash back at closing. If seller credits would push you under the $1,000 minimum or toward cash back, NIFA shrinks the HBA loan rather than the first mortgage. The home must become your primary residence within 60 days of closing.
Step 6: Reserve, sign the HBA forms and close
Your lender reserves the loans with NIFA and has every borrower and any non-purchasing spouse sign the HBA Notice to Borrower at application. At closing you sign a second promissory note, a second deed of trust and a borrower acknowledgement letter. After NIFA's master servicer buys the loan, you get separate monthly statements for the first mortgage and the HBA loan. Questions go to NIFA at 800-204-6432.
Real Cost Example
On a $200,000 home in Hastings, the median price in our data, an FHA buyer needs a 3.5% down payment of $7,000. HBA allows up to 5% of the price, or $10,000, which also matches NIFA's $10,000 ceiling. That covers the full $7,000 down payment and leaves $3,000 toward closing costs. The $10,000 second loan costs about $88 a month at 1% for 10 years.
Estimated closing costs in the Hastings area run $4,000 to $6,000. After the $3,000 left from HBA, the buyer brings $1,000 to $3,000 in cash, never less than NIFA's $1,000 minimum investment. If the seller pays some closing costs, NIFA reduces the HBA loan instead of allowing cash back, which also lowers the monthly payment on the second loan.
A buyer at or below 80% of area median income could also apply for FHLBank Topeka's Homeownership Set-aside Program, a $2,500 to $15,000 grant through a member lender. On $6,000 in closing costs, the $2,500 minimum HSP grant plus the buyer's $1,000 covers the gap, and NIFA trims HBA by $500 to prevent cash back. HSP's 2026 funds were offered through September 30, 2026, so ask about the next round.
Combining With Other Programs
NIFA's HBA page points buyers to FHLBank Topeka's Homeownership Set-aside Program (HSP) for grant funds. HSP provides $2,500 to $15,000 per household for down payment, closing costs or purchase-related repairs, for first-time buyers at or below 80% of area median income. It requires homebuyer education, a five-year retention agreement and an FHLBank member lender. The 2026 round opened March 2 and ran through September 30, 2026. Gifts from family are also allowed under the first mortgage's underwriting rules.
HBA is available only with a NIFA First Home first mortgage, while NIFA's Welcome Home Assistance is tied to the separate Welcome Home loan, so ask your lender which pairing fits. NIFA will not subordinate the HBA loan for any reason, so refinancing the first mortgage means paying off the second. The loan is not assumable but can be prepaid at any time without penalty. Call NIFA at 402-434-3900 or 800-204-6432, weekdays 8 a.m. to 5 p.m.
Seller-paid closing costs and lender credits also lower cash to close, though NIFA trims the HBA amount to protect your $1,000 minimum and prevent cash back. A government first loan saves on rate: 6.875% versus 7.250% conventional as of 10/09/2026. NIFA allows a principal reduction of up to $500 on the HBA loan, with larger amounts approved case by case.
Pros and Cons
The NIFA Homebuyer Assistance Program's biggest advantage is cost. A 1% rate on the second loan is far cheaper than a personal loan or credit card used for a down payment, and a $10,000 balance costs about $88 a month. It covers up to 5% of the price, enough for a full 3.5% FHA down payment plus part of closing costs. It works with conventional, FHA, USDA and VA first loans, and target-area buyers and qualified veterans skip the first-time buyer rule. Buyers at or below 80% of area median income can also add an FHLBank Topeka HSP grant of up to $15,000.
The biggest limitation is that HBA is a real loan, not a grant. Payments start with the first mortgage and run for 10 years, and NIFA will not subordinate it, so a refinance means paying it off. The HBA first mortgage also carries a higher rate because it includes the assistance. Income limits are tight outside target areas, at $105,700 for one or two people in most counties, and Papillion's $415,000 median in our data sits above the $398,000 non-target cap. Repeat buyers and higher earners should compare NIFA Welcome Home Assistance, with its $182,800 income limit.
Frequently Asked Questions
Is the NIFA HBA loan forgivable?+−
How much down payment assistance can I get from NIFA?+−
What are the NIFA income limits in 2026?+−
Do I have to be a first-time homebuyer for NIFA HBA?+−
What credit score do I need for a NIFA loan?+−
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Program details last verified: October 16, 2026