OHFA Grants for Grads, Ohio Heroes, and Mortgage Tax Credit Explained

Ohio's OHFA program portfolio extends beyond the flagship YourChoice! Down Payment Assistance. Three specialty programs — Grants for Grads, Ohio Heroes, and the Mortgage Tax Credit — each target specific buyer demographics with targeted financial incentives.

If you're a recent college graduate, a public servant, military veteran, or healthcare worker buying your first home in Ohio, one or more of these programs could meaningfully reduce the long-term cost of your purchase. The programs can also be stacked with the YourChoice! DPA, creating a powerful combined benefit package.

OHFA Grants for Grads

Grants for Grads targets Ohio's "brain drain" problem — the tendency of college graduates to leave the state rather than put down roots here. The program provides both a discounted interest rate and down payment assistance to recent graduates who choose to buy a home in Ohio.

Who qualifies: Buyers who have earned an associate's, bachelor's, master's, or doctoral degree from an accredited college or university within the 48 months immediately preceding the loan reservation date. The degree doesn't need to be from an Ohio institution — it just has to have been earned within the past four years.

What you get: A below-market interest rate on the primary OHFA mortgage, plus down payment assistance of either 2.5% or 5% of the purchase price.

How the forgiveness works: Grants for Grads uses a staggered pro-rata forgiveness structure — different from YourChoice!'s seven-year cliff. The second mortgage is forgiven at 20% per year over five years, as long as you remain a resident of Ohio. If you stay in Ohio for the full five years, the entire balance is forgiven. If you move out of state in year three, you repay the remaining 40% (the unforgiven portion).

This five-year pro-rata structure is more buyer-friendly than the YourChoice! all-or-nothing seven-year cliff for buyers who may not be certain they'll stay in one home long-term. If you move within Ohio but sell the house at year four, you've already had 80% forgiven — you only repay 20%.

The exit requirement is state residency, not occupancy of the specific home. If you sell the home and buy another in Ohio, you can satisfy the residency requirement without issue. The obligation is purely about not leaving Ohio.

Minimum credit score: 640 for conventional, USDA, and VA loans; 650 for FHA loans.

Income and purchase price limits: Same county-level caps that apply to all OHFA programs. Check OHFA's current limits at myohiohome.org for the specific county you're buying in.

Ohio Heroes Program

Ohio Heroes provides a discounted interest rate for individuals who work in specific qualifying occupations. Unlike Grants for Grads and YourChoice!, Ohio Heroes is a rate discount program, not a down payment assistance program. The discount is typically 0.25% below OHFA's standard rate — modest in absolute terms but meaningful over 30 years.

Qualifying occupations:

• Active-duty military personnel and veterans
• Police officers and peace officers
• Firefighters
• Paramedics and EMTs
• Licensed nurses (RN and LPN) and nurse practitioners
• Physicians
• Licensed K-12 teachers

How to access it: When applying through an OHFA-approved lender, indicate your qualifying occupation. The lender will verify the occupational requirement with documentation (employment letter, professional license, DD-214 for veterans, etc.).

Stacking with other programs: Ohio Heroes can be combined with both YourChoice! Down Payment Assistance and the Mortgage Tax Credit. A qualifying nurse who is also a first-time buyer can take the Heroes rate discount, the YourChoice! DPA, and the MTC simultaneously — each benefit addresses a different component of the financing.

There is no separate OHFA Heroes down payment assistance — the program is the rate discount only. For down payment capital, Heroes borrowers use YourChoice! alongside it.

The Dayton metro has high Ohio Heroes utilization given Wright-Patterson Air Force Base's presence. Veterans in the area should also evaluate the VA loan's benefits alongside OHFA Heroes, since VA's zero-down and no-PMI structure sometimes offers better total economics than an OHFA conventional loan with Heroes discount.

OHFA Mortgage Tax Credit (MTC)

The Mortgage Tax Credit is OHFA's most financially underappreciated program. It's not down payment money — it's a federal income tax credit that reduces what you owe the IRS every year you hold the mortgage.

How it works: The MTC converts a percentage of your annual mortgage interest into a direct, dollar-for-dollar credit against your federal tax liability. Not a deduction — a credit. If your federal tax bill would otherwise be $5,000, and you have a $2,000 MTC credit, you owe $3,000.

Credit percentages:

• OHFA MTC Plus (paired with an OHFA primary mortgage): 40% of the mortgage interest paid, up to a maximum $2,000 per year
• OHFA MTC Basic (paired with a non-OHFA loan): 15% to 20% of the mortgage interest paid

On a $250,000 OHFA loan at 7%, you pay roughly $17,500 in interest in year one. At 40%, the MTC credit would be $7,000 — but it's capped at $2,000. So you receive the maximum $2,000 credit regardless of how large your interest payment is, as long as 40% of interest exceeds $2,000.

The MTC is not refundable — it reduces your tax bill but doesn't generate a refund if your tax liability is lower than the credit. Unused credit can be carried forward to future tax years.

First-time buyer requirement: Like most OHFA programs, the MTC is limited to buyers who haven't owned a primary residence in the previous three years.

How to claim it: When you close with an OHFA MTC loan, OHFA issues a Mortgage Credit Certificate (MCC). Each year, you include the certificate information on your federal return (using IRS Form 8396) and claim the credit.

The MTC adds approximately $2,000 of after-tax value annually for as long as you hold the mortgage. Over a 10-year holding period, that's $20,000 in tax savings — more than the YourChoice! DPA principal on many purchase prices.

Combining All Four OHFA Programs

OHFA explicitly allows and encourages stacking. A qualifying buyer can simultaneously use:

1. OHFA primary mortgage at the standard OHFA rate
2. Ohio Heroes rate discount (0.25% below standard rate)
3. YourChoice! 2.5% forgivable DPA second mortgage
4. OHFA MTC for ongoing federal tax credit

This combination provides subsidized rate + zero out-of-pocket down payment (covered by DPA) + annual $2,000 federal tax credit. For a public servant with a qualifying degree (adding Grants for Grads's 5-year pro-rata forgiveness), the package becomes even more powerful.

The practical constraint is qualification. Stacking requires meeting all the individual eligibility criteria, including the county income and purchase price caps, minimum credit scores, HUD-approved homebuyer education, and occupational verification for Heroes. Meeting all requirements simultaneously narrows the eligible pool, but buyers who do qualify are accessing some of the best first-time buyer financing available in the United States.

HUD-Approved Homebuyer Education Requirement

All OHFA programs require completion of a HUD-approved homebuyer education course before closing. OHFA accepts in-person and online courses from approved providers. The course typically takes 6-8 hours and covers the homebuying process, financial literacy, and loan obligations.

Don't leave this requirement to the last week before closing. Complete it early in your process. The certificate has a one-year validity window in most cases — if your home search takes longer than expected, you may need to retake it.

For a complete program comparison table — including eligibility requirements, forgiveness timelines, stacking rules, and a calculator showing the long-term financial value of each combination — see the Ohio First-Time Home Buyer Guide.

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