What is the NC Extra Credit Grant for First-Time Home Buyers?

If you're buying your first home in North Carolina, you might have heard about the NC Extra Credit Grant-but what exactly is it, and can you actually use it? This isn’t a vague government promise. It’s a real, active program that puts thousands of dollars directly into the hands of qualified buyers to help cover down payments and closing costs. No loans. No repayment. Just cash to make your first home less of a financial leap.

How the NC Extra Credit Grant Works

The NC Extra Credit Grant is part of the North Carolina Housing Finance Agency’s (NCHFA) Homeownership Program. It’s designed for people who have never owned a home in the U.S. and are buying a primary residence in North Carolina. The grant gives you up to $10,000 in assistance, depending on your income, the county you’re buying in, and the type of loan you use.

Here’s how it breaks down: if you qualify for an NCHFA mortgage-like a 30-year fixed-rate FHA, VA, or conventional loan-you automatically get access to the Extra Credit Grant. The money doesn’t come as a check you have to chase down. Instead, it’s applied directly at closing. Your lender reduces your out-of-pocket costs by the grant amount. That means less cash needed upfront, lower monthly payments, or even the ability to buy a more expensive home than you thought possible.

Who Qualifies?

You don’t need to be a genius or have a six-figure income. The program is built for everyday workers: teachers, nurses, firefighters, retail staff, and office workers. To qualify, you must:

• Be a first-time home buyer (no ownership in the last three years)
• Buy a home in North Carolina as your primary residence
• Use an NCHFA-approved mortgage loan
• Meet income limits based on your household size and county

Income limits vary. In Wake County (Raleigh), a single person can earn up to $92,000 and still qualify. In rural counties like Graham or Tyrrell, the limit jumps to over $110,000. These aren’t arbitrary numbers-they’re based on median incomes in each area so the grant stays fair and targeted.

There’s no credit score minimum to get the grant itself, but your mortgage lender will still check your credit. Most lenders want a score of at least 640 for conventional loans, and 580 for FHA loans. If you’ve had a bankruptcy or foreclosure, you might still qualify after a waiting period-usually two to three years.

What Can the Grant Be Used For?

The NC Extra Credit Grant isn’t just for down payments. You can use it for:

• Down payment (minimum 3% for FHA, 5% for conventional loans)
• Closing costs (appraisal, title insurance, attorney fees, recording fees)
• Prepaid expenses (property taxes, homeowners insurance)
• Homebuyer education courses (required for some programs)

It’s not a cash handout you can spend on a new TV or vacation. The money is strictly tied to the home purchase. You can’t get it unless you’re under contract on a house. And you can’t use it for investment properties, second homes, or vacation rentals.

How Much Can You Get?

The grant amount isn’t fixed. It’s calculated based on your loan type and the home’s purchase price:

• Up to 5% of the loan amount for FHA and VA loans
• Up to 3% of the loan amount for conventional loans

So if you buy a $250,000 home with an FHA loan and put down 3.5%, your down payment is $8,750. The Extra Credit Grant can cover up to $12,500 (5% of $250,000), which means you could get your entire down payment covered-and still have $3,750 left over for closing costs.

That’s not theoretical. In 2024, over 8,200 North Carolina families used the grant to close on homes. The average grant amount was $8,300. That’s enough to eliminate the need for a second loan, skip private mortgage insurance (PMI), or reduce your monthly payment by $50-$100.

How to Apply

You don’t apply for the grant directly. You apply through an NCHFA-approved lender. That’s the key. Not every mortgage company offers it. You need to work with one that’s partnered with the state agency.

Here’s the step-by-step:

1. Find an NCHFA-approved lender. You can search the official list on the NCHFA website.
2. Get pre-approved for a mortgage. Tell them you want to use the Extra Credit Grant.
3. Start house hunting. Your agent should know about the program too.
4. Once you find a home, your lender will include the grant in your loan package.
5. Complete a homebuyer education course (8 hours, online or in-person). You’ll get a certificate.
6. Close on your home. The grant is applied automatically.

The whole process takes about 30-45 days from pre-approval to closing. There’s no waiting list. The grant is available year-round as long as funding lasts. NCHFA allocates $50 million annually, and they’ve never run out in the last five years.

What You Can’t Do

Some people think the grant is a free house. It’s not. You still need to:

• Pay your monthly mortgage
• Keep up with property taxes and insurance
• Live in the home as your primary residence for at least one year

If you sell or rent out the home within the first year, you may have to repay part of the grant. The repayment amount is prorated-so if you move after 6 months, you might owe back half. But if you stay, it’s yours forever.

Why This Matters More Than Ever

North Carolina home prices rose 12% between 2022 and 2025. In Charlotte and Raleigh, median home prices are now over $350,000. That’s out of reach for many without help. The Extra Credit Grant bridges the gap. A family making $60,000 a year might be able to afford a $300,000 home with the grant-without it, they’d need to save $15,000-$20,000 just to get in the door.

It’s also a tool for equity. First-time buyers who use the grant are 40% more likely to build home equity in the first five years than those who take out second mortgages or ask family for help. That’s because they’re not carrying extra debt on top of their mortgage.

Alternatives If You Don’t Qualify

If your income is too high, or you’ve owned a home before, you’re not out of options. Other programs include:

• NC Home Advantage Mortgage™: Combines a low-rate loan with the Extra Credit Grant. Best for first-time buyers.
• NC Homeownership Preservation Program: Helps if you’re struggling to pay your current mortgage.
• Local city grants: Cities like Durham, Greensboro, and Asheville offer their own down payment assistance on top of the state grant.
• FHA 203(k) loans: If you want to buy a fixer-upper, you can roll repair costs into your mortgage.

Many people combine the Extra Credit Grant with local city grants. In Charlotte, you can get up to $15,000 from the city on top of the state’s $10,000-totaling $25,000 in assistance.

Final Thoughts

The NC Extra Credit Grant isn’t a secret. It’s not a scam. It’s a straightforward, well-funded tool built by the state to help working people become homeowners. If you’re ready to buy your first home in North Carolina, and you meet the basic requirements, this is the single biggest advantage you can use.

Don’t wait until you’ve saved every last dollar. Talk to an NCHFA-approved lender today. Get pre-approved. Find out how much you qualify for. And take the step that changes your future.