Alabama Down Payment Assistance Programs

Down payment assistance in Alabama comes from the state housing finance agency and from city and county programs. The statewide options are AHFA Step Up and AHFA First Step. Local programs include Birmingham Ready to Own, City of Mobile DPA, Mobile County DPA, and Huntsville HOAP. I’m David Stallings with NorthStar Mortgage Advisors, and my team helps Alabama buyers figure out which programs they qualify for and how to stack them with the right first mortgage. I have an office in Gulf Shores, Alabama.

Last updated October 15, 2026. Every program below was checked against its official source on October 15, 2026.

Alabama programs at a glance

AHFA Step Up

Alabama Housing Finance Authority (AHFA). 4% of the sales price, up to $10,000, secured by a 10-year second mortgage paired with your 30-year fixed first mortgage. Because ServiSolutions (a division of AHFA) services both loans, you make one payment each month.

AHFA First Step (Mortgage Revenue Bonds)

Alabama Housing Finance Authority (AHFA). Down payment assistance of up to $10,000 or 4% of the sales price, whichever is lower, secured by a 10-year second mortgage paired with the 30-year fixed First Step first mortgage. Buyers using Freddie Mac HFA Advantage may also qualify for AHFA's Affordable Income Subsidy Grant toward closing costs.

City of Birmingham Ready to Own Homebuyer Down Payment Assistance

City of Birmingham Community Development (with Neighborhood Housing Services of Birmingham). Up to $10,000 as a five-year forgivable loan secured by a restrictive covenant. Funds can go toward down payment and closing costs (the City also allows rate buydowns).

City of Mobile First Time Home Buyers' Program (Downpayment Assistance)

City of Mobile Neighborhood Development Department. Down payment and closing-cost assistance that is forgiven if you live in the home for five years. The City's page does not publish a dollar amount.

Mobile County Down Payment Assistance Program

Mobile County Commission Grants Department (HUD HOME funds). $1,000 to $25,000 as a deferred loan forgiven in equal monthly installments over a five-year affordability period.

City of Huntsville Homeownership Assistance Program (HOAP)

City of Huntsville Community Development. Up to $24,999 or 10% of the purchase price, based on need, as a five-year deferred-payment loan with 20% forgiven each year. It can be used for down payment, closing costs, principal reduction (or a rate buydown).

How we help you choose

1. Tell me where you want to buy and your household size and income.
2. I match you against every program on this page and the official limits.
3. You complete required homebuyer education while we get you preapproved.
4. We coordinate the assistance application with the administrator and close your loan.

Frequently asked questions

What down payment assistance is available in Alabama?

As of October 15, 2026, we track 6 open programs in Alabama: AHFA Step Up (4% of the price, up to $10,000); AHFA First Step (up to $10,000 or 4% of the price (lesser)); Birmingham Ready to Own (up to $10,000); City of Mobile DPA ( amount not published); Mobile County DPA (up to $25,000); Huntsville HOAP (up to $24,999 or 10% of the price).

Which Alabama programs work statewide?

AHFA Step Up, run by Alabama Housing Finance Authority (AHFA); AHFA First Step, run by Alabama Housing Finance Authority (AHFA).

Can I combine a Alabama state program with a local program?

Sometimes. Each local program sets its own rules on stacking with the state program, so we check both sets of guidelines against your file before you go under contract.

Do I have to be a first-time homebuyer?

It depends on the program. Many require that you haven't owned a home in the last three years, but some are open to repeat buyers. Each program page shows the rule.

Does NorthStar Mortgage Advisors work with Alabama buyers?

Yes. NorthStar Mortgage Advisors is licensed in 35+ states, with offices in Georgia, Orlando FL, and Gulf Shores AL. Lender approval varies by program and is noted on each program page.

Are there Alabama programs you left off this page?

Not as of October 15, 2026. We list only programs that are open and funded on the official sites.

More down payment assistance

• Down payment assistance by state
• Georgia programs
• Florida programs
• North Carolina programs
• South Carolina programs
• Mississippi programs
• Texas programs

Sources

• AHFA Step Up
• AHFA First Step (Mortgage Revenue Bonds)
• City of Birmingham Ready to Own Homebuyer Down Payment Assistance
• City of Mobile First Time Home Buyers' Program (Downpayment Assistance)
• Mobile County Down Payment Assistance Program
• City of Huntsville Homeownership Assistance Program (HOAP)

NorthStar Mortgage Advisors is a division of Canopy Mortgage, LLC. NMLS #1359687. 6588 Church Street, Douglasville, GA 30134. David Stallings, NMLS #157508. Equal Housing Opportunity. Down payment assistance programs are run by the government agencies and authorities named on this page, which set and can change their terms, limits, and funding at any time. Program details on this page were checked against official sources on the date shown and are not a commitment to lend. All loans are subject to credit, income, property, and program approval. Verify licensing at nmlsconsumeraccess.org.