Step Up Program – Alabama Housing Assistance

The Step Up Program helps qualified buyers by combining a 30-year fixed-rate first mortgage with a 10-year second mortgage for down payment assistance. These programs may support both new and existing home purchases and are administered by AHFA. Eligible borrowers can obtain down payment help that is repaid over time, making homeownership more attainable in Alabama.

Why Choose Step Up?

• Step Up is perfect for buyers who have stable income but struggle to save a down payment while renting.

• The second mortgage for down payment can be paid off early with no prepayment penalty, reducing interest paid over time.

• Pre-approval is encouraged so you know your budget before house hunting.

• Work with an AHFA-participating lender to access the best local knowledge.

• Must purchase a new or existing home in Alabama

• Annual household income cannot exceed $159,200

• Minimum credit score of 640

• Debt-to-income ratio must be 45% or lower

• Must complete a homebuyer education course

• Must apply through a participating lender

• Provides 4% of the sales price (up to $10,000) for down payment assistance

• Combines first and second mortgages into one payment

• Available for FHA, VA, USDA, and conventional loans

1. Verify eligibility criteria

2. Complete a homebuyer education course

3. Contact a participating lender

4. Submit required documentation

5. Complete loan application and processing