NC Guarantee Grant Calculator
The NC Guarantee Grant helps cover down payment and closing costs for first-time home buyers in North Carolina. Calculate how much grant money you could receive based on your home purchase price.
Buying your first home in North Carolina can feel impossible if you’re working with a tight budget. Rising prices, strict mortgage rules, and down payment requirements often push first-time buyers out of the market. But there’s a program designed specifically to help: the NC Guarantee Grant. It’s not a loan. It’s not a tax credit. It’s a grant - money you don’t have to pay back - that helps cover your down payment and closing costs when you buy a home in North Carolina.
How the NC Guarantee Grant Works
The NC Guarantee Grant is part of the North Carolina Home Loan Program, run by the North Carolina Housing Finance Agency (NCHFA). It gives eligible first-time buyers up to 5% of the home’s purchase price as a grant. That means if you’re buying a $300,000 home, you could get up to $15,000 to help with your down payment and closing costs. You still need to put down at least 3% of your own money, but the grant covers the rest.
This grant works with any approved mortgage type - FHA, VA, USDA, or conventional loans. It’s not tied to a specific lender. You just need to work with a participating mortgage company that’s trained in the NCHFA program. The grant is applied directly to your closing costs, so you walk in with less cash needed upfront.
Who Qualifies for the NC Guarantee Grant
You don’t need to be a superstar saver to qualify. The program is built for regular people - teachers, nurses, retail workers, and others who earn a steady income but can’t scrape together 20% for a down payment.
- You must be a first-time home buyer. That means you haven’t owned a home in the last three years. There’s an exception if you’re buying in a targeted county or a qualified census tract - then you might still qualify even if you owned before.
- Your household income must be below the program’s limit. For most counties, that’s $105,000 for a single person or $125,000 for a family of four. Higher limits apply in Wake, Mecklenburg, and Durham counties - up to $135,000.
- The home must be your primary residence. You can’t use it for rental income or as a vacation home.
- You must complete a homebuyer education course approved by NCHFA. These are usually online and take about 6-8 hours. Many are free or cost less than $50.
There’s no credit score cutoff, but lenders typically want to see at least 640. If your score is lower, you can still qualify with a co-borrower or through special counseling.
What Homes Are Eligible
You can use the NC Guarantee Grant to buy almost any single-family home in North Carolina - new construction, resale, townhomes, or condos. The home must be on the market and pass a basic inspection. Manufactured homes are allowed too, as long as they’re permanently affixed to the land and meet HUD code.
The maximum purchase price is $500,000 statewide. In high-cost areas like Chapel Hill or Asheville, you might be able to go higher with a special exception. The grant can’t be used for investment properties, second homes, or luxury homes over the cap.
How It Compares to Other NC Programs
North Carolina offers several first-time buyer programs, but the NC Guarantee Grant stands out because it doesn’t require repayment.
| Program | Grant Amount | Repayment Required? | Income Limit | Home Price Cap |
|---|---|---|---|---|
| NC Guarantee Grant | Up to 5% of purchase price | No | $105K-$135K (varies by county) | $500,000 |
| NC Home Advantage Mortgage | Down payment assistance up to 5% | Yes - forgivable after 5 years | $105K-$135K | $500,000 |
| NC Homeownership Program | Up to $10,000 in closing cost help | No | $95,000 (statewide) | $400,000 |
| NC Housing Finance Agency Down Payment Assistance | Up to $15,000 | Yes - 2nd mortgage, 0% interest | $105K-$135K | $500,000 |
The NC Guarantee Grant is the only one that gives you cash you never have to pay back - even if you sell the home after a year. That makes it the most powerful tool for buyers who need immediate help but aren’t sure they’ll stay put long-term.
Real-World Example: How Much You Can Save
Let’s say you’re a teacher in Raleigh earning $65,000 a year. You’ve saved $8,000, and you’ve found a $320,000 home. Your closing costs are $9,600. Without help, you’d need $41,600 - $64,000 for a 20% down payment plus $9,600 in fees. But with the NC Guarantee Grant:
- You put down 3% = $9,600
- Grant covers 5% = $16,000
- That covers your down payment and closing costs entirely
- You only need to bring $9,600 to closing - which you already have
You walk away with no extra debt, no balloon payments, and no repayment schedule. Your monthly mortgage is based on a $320,000 loan with 3% down - and you get the same low interest rate as someone who put down 20%.
How to Apply
Applying is straightforward, but timing matters. You can’t apply directly to NCHFA - you must go through a participating lender. Here’s how:
- Find a lender who works with NCHFA. Ask if they offer the NC Guarantee Grant. Most major banks and local credit unions in NC do.
- Get pre-approved for a mortgage. Tell your lender you want to use the NC Guarantee Grant.
- Complete the homebuyer education course. Most lenders can recommend free or low-cost options.
- Find a home within the price limit. Your lender will help confirm eligibility.
- Submit your grant application along with your mortgage paperwork. The lender handles the rest.
The whole process takes 30-45 days from pre-approval to closing. There’s no waiting list. Funding is available year-round, as long as the lender has capacity.
Common Mistakes to Avoid
Many buyers miss out because they make simple errors:
- Waiting too long to start - the grant isn’t automatic. You have to ask for it.
- Choosing a home over $500,000 - even if you can afford it, the grant won’t cover it.
- Skipping the homebuyer course - lenders won’t approve you without proof.
- Using the grant with a non-participating lender - not all lenders offer it, even in NC.
- Thinking you need perfect credit - you don’t. A score of 640 is enough for most cases.
Also, don’t assume you’re ineligible because you’ve owned property before. If you owned a home more than three years ago, or if you’re buying in a targeted area, you might still qualify. Ask your lender - don’t guess.
What Happens If You Sell or Refinance?
One of the biggest perks of the NC Guarantee Grant is that you don’t owe anything if you sell, refinance, or move. Unlike second mortgages or forgivable loans, this grant disappears from your record once closing is done. There’s no clawback, no repayment schedule, no hidden fine print.
If you refinance later to get a lower rate, you don’t have to pay back the grant. If you sell after two years and buy another home, the grant doesn’t follow you - but you can apply for it again if you still qualify as a first-time buyer under the three-year rule.
Where to Find More Info
The official source is the North Carolina Housing Finance Agency website: nchfa.com. You can find lender lists, income limits by county, and downloadable application checklists there. You can also call their helpline at 1-800-942-2272. They don’t give legal advice, but they can point you to the right resources.
Many community nonprofits - like Habitat for Humanity affiliates or local housing counselors - offer free one-on-one help with the application. You don’t need to pay for a consultant.
Is the NC Guarantee Grant only for first-time buyers?
Yes, the grant is primarily for first-time buyers - meaning you haven’t owned a home in the last three years. But if you’re buying in a targeted low-income area or census tract, you may still qualify even if you owned before. Always check with your lender.
Can I use the NC Guarantee Grant with a VA or FHA loan?
Yes. The grant works with FHA, VA, USDA, and conventional loans. It’s designed to pair with any mortgage type that fits your financial situation.
Do I have to pay taxes on the grant money?
No. The NC Guarantee Grant is considered a gift, not income, so you don’t pay federal or state taxes on it. The IRS and North Carolina Department of Revenue both confirm this.
What if my income is just above the limit?
If you’re slightly over the income limit, you might still qualify for other NCHFA programs like the Home Advantage Mortgage, which offers a forgivable second mortgage. The Guarantee Grant has strict caps, but other options exist. Talk to a housing counselor.
Can I use the grant for a townhome or condo?
Yes. The grant covers single-family homes, townhomes, and condos as long as they’re your primary residence and meet the price cap. Condos must be on the NCHFA-approved list, which most are.
How long does it take to get approved?
Once you’ve found a home and submitted your application with your lender, approval usually takes 7-10 business days. The whole process from pre-approval to closing takes 30-45 days on average.
Next Steps
If you’re serious about buying your first home in North Carolina, start by calling a local lender who participates in the NCHFA program. Ask them: "Do you offer the NC Guarantee Grant?" Then, sign up for a homebuyer education course. Don’t wait until you’ve found a house - get your paperwork ready first. The grant isn’t guaranteed, but it’s available to anyone who meets the rules. And for many, it’s the only reason they can afford to buy at all.