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Step Up with Affordable Income Subsidy Grant (AISG)

Statewide, Alabama

Last verified
See what you qualify forOfficial program site →
Assistance

1%

Of the purchase price, as the program sets it

Income limit

80% AMI

Of area median income; varies by county and household size

Repayment

Grant

Not repaid

What is Step Up with Affordable Income Subsidy Grant (AISG)?

Step Up with Affordable Income Subsidy Grant (AISG) is a grant for homebuyers in Statewide, Alabama.

  • The Affordable Income Subsidy Grant (AISG) is a true closing-cost grant offered by AHFA that layers on top of the Step Up (or First Step) HFA Advantage conventional first mortgage. It provides 1.0% (≤50% AMI) or 0.5% (50.01-80% AMI) of the loan amount as a non-repayable grant. Income limits are set by county at 80% of AMI per Freddie Mac. AISG is the only grant component (no lien, no repayment) in AHFA's homeownership product suite.
  • The Affordable Income Subsidy Grant (AISG) is a closing-cost grant layered on top of an AHFA Step Up (or First Step) HFA Advantage conventional loan and its DPA second mortgage. Borrowers at or below 50% of the Freddie Mac AMI receive a grant of 1.0% of the loan amount.
  • borrowers between 50.01% and 80% AMI receive 0.5% of the loan amount. The grant is true grant funds (no lien recorded, no repayment) and helps cover closing costs. When stacked with Step Up, an eligible borrower receives: (a) a 30-year HFA Advantage conventional first mortgage, (b) up to 4% / $10,000 Step Up DPA second mortgage, and (c) the AISG closing-cost grant.
  • Funding comes from AHFA / Freddie Mac HFA Advantage program funds; loans serviced by ServiSolutions.

How much assistance does it provide?

Step Up with Affordable Income Subsidy Grant (AISG) provides assistance worth 1% of the purchase price, as set by the program.

  • Buyer contribution: No minimum borrower contribution required by AHFA for the grant; HFA Advantage 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 with Affordable Income Subsidy Grant (AISG) is structured as a grant, so it is not repaid.

  • Repayment is triggered by None - grant is non-repayable and no lien recorded against the property.
  • The assistance is recorded in No Lien (Grant) 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 with Affordable Income Subsidy Grant (AISG) is open to buyers who will live in the home as their primary residence.

The program requires

  • The home is occupied as a primary residence
  • On credit: 640 minimum FICO
  • A completed homebuyer education course, through Approved homebuyer education provider required; list available through participating lenders and AHFA
  • Residency: Property must be in Alabama and occupied as primary residence within 60 days of closing
  • Citizenship or immigration status: U.S. citizen or qualified non-citizen per Freddie Mac HFA Advantage guidelines
  • AISG is restricted to the Freddie Mac HFA Advantage conventional product (AHFA does not offer the grant on FHA/VA/USDA). Income limits are set by Freddie Mac at 80% Area Median Income by county and updated periodically; verify the property's specific 80% AMI limit using the Freddie Mac Home Possible Eligibility Map (https://sf.freddiemac.com/working-with-us/affordable-lending/home-possible-eligibility-map). The grant amount is paid as a percentage of the first-mortgage loan amount, with 1.0% if borrower is at/below 50% AMI and 0.5% if 50.01-80% AMI. (Note: a third-party site fha.com lists 1.5% for the 50-80% tier, but AHFA's official program page authoritatively states 0.5%.) Standard Step Up (or First Step) program rules also apply (640 FICO, 45% DTI, primary residence, homebuyer education). HUD 2025 4-person AMI for many Alabama counties (~$70K-$90K) closely tracks Freddie Mac 80% AMI used here; the cited 4-person figure of $92,400 reflects the higher Huntsville/Madison or Birmingham-Hoover MSA 80% AMI tier.

The program excludes

  • Households above 80% of area median income

These are the program's own published rules, not a decision about any individual — the administering agency and a lender determine who actually qualifies.

What are the income limits?

Step Up with Affordable Income Subsidy Grant (AISG) limits household income to 80% of the area median income, which varies by county and household size.

  • AISG income limits are set by Freddie Mac at 80% of county Area Median Income (AMI) and apply by the property's county. For 2025, AHFA-cited 4-person figures for the lowest-income/highest-income Alabama counties span approximately $35,300-$92,400 depending on county. Borrowers must be at or below 80% of the AMI for the property's location to receive any grant: at/below 50% AMI = 1.0% of loan amount grant; 50.01% to 80% AMI = 0.5% of loan amount grant. Use Freddie Mac's Home Possible Eligibility Map to look up the exact 80% AMI dollar limit for the property's census tract.
  • 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 with Affordable Income Subsidy Grant (AISG) caps the purchase price as follows: If paired with First Step: $544,233 non-target / $665,173 target sales-price limits apply. If paired with Step Up: no AHFA sales-price cap (subject to Freddie Mac HFA Advantage conforming limits).

  • Eligible property types include Single-family detached, townhomes, eligible condos, planned-unit developments (per Freddie Mac HFA Advantage guidelines).
  • New construction is eligible.
  • Manufactured homes are eligible.

Where does it apply?

Step Up with Affordable Income Subsidy Grant (AISG) serves buyers purchasing in Statewide, Alabama.

How do you apply?

Applications for Step Up with Affordable Income Subsidy Grant (AISG) go through the administering agency, which publishes the current terms and the application steps on its own site.

  1. Take a homebuyer education course

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

  2. Contact the administering agency to reserve funds

    Funds are reserved through Lender reserves grant funds along with Step Up/First Step rate/funds via AHFA's online lender portal, and are subject to availability.

  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.

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