Step Up

What is Step Up?

Step Up is a grant for homebuyers in Statewide, Alabama.

• Step Up is AHFA's non-bond homeownership program designed for moderate-income buyers who can afford a mortgage payment but need help with the down payment. It pairs a 30-year fixed-rate first mortgage with a 10-year amortizing second mortgage providing up to 4% / $10,000 in DPA. Unlike First Step, Step Up has no first-time-homebuyer requirement, no IRS recapture tax, and no purchase price cap.
• Step Up combines a 30-year fixed-rate first mortgage (FHA, VA, USDA, or Freddie Mac HFA Advantage conventional) with down payment assistance equal to 4% of the sales price, up to a maximum of $10,000. The DPA is structured as a 10-year amortizing second mortgage combined with the first mortgage. Loans are serviced by ServiSolutions (a division of AHFA), so homeowners write only one check per month. No first-time-homebuyer requirement and no purchase price cap.
• flat $172,800 household income limit statewide.
• Funding comes from AHFA capital markets / TBA execution (non-bond); loans serviced by ServiSolutions.

How much assistance does it provide?

Step Up provides assistance worth 4% of the purchase price, as set by the program.

• Buyer contribution: No minimum borrower contribution stated by AHFA; loan-product overlays apply.
• The program can be combined with other assistance, subject to the rules of each.
• Amounts are the program's published maximums, not an offer — the administering agency determines any individual award.

Do you have to pay it back?

Step Up is structured as a grant, so it is not repaid.

• Repayment is triggered by 10-year amortizing second mortgage with monthly payments combined with the first mortgage and balance becomes due upon sale, refinance, or transfer of the property if not yet repaid.
• The assistance is recorded in 2nd Lien position.
• Forgiveness and repayment terms are set by the program and can change — confirm them on the official program page before applying.

Who qualifies?

Step Up is open to buyers who will live in the home as their primary residence.

What are the income limits?

Step Up limits household income to $172,800.

• The limit applies to total household income, not only the borrower’s.
• Area median income figures are published by HUD and updated annually, so check the current table for the county before relying on a number.

What kind of home can it be used for?

Step Up caps the purchase price as follows: No AHFA-imposed sales-price cap; subject only to FHA/VA/USDA county loan limits and Freddie Mac HFA Advantage conforming limits.

• Eligible property types include Single-family detached, townhomes, condos (must meet agency approval), manufactured housing per agency guidelines.
• New construction is eligible.
• Manufactured homes are eligible.

Where does it apply?

Step Up serves buyers purchasing in Statewide, Alabama.

How do you apply?

Applications for Step Up go through the administering agency, which publishes the current terms and the application steps on its own site.

1. 1

   Take a homebuyer education course

   Required by the program, through Approved homebuyer education provider required; list available through participating lenders and AHFA.

2. 2

   Contact the administering agency to reserve funds

   Funds are reserved through Lender reserves rate/funds via AHFA's online lender portal on a first-come, first-served basis, and are subject to availability.

3. 3

   Work with a lender who handles the program

   Hey Prescott is not a lender and does not accept applications; this page describes the program so a buyer can take it to a lender or housing counselor.