Overview
Mississippi is one of the most affordable states in the country to buy a first home, with a statewide median home value in the neighborhood of $253,000 — and many small-town and rural markets sit well below that. That affordability is the headline advantage, but the trade-off is a thinner inventory of move-in-ready starter homes and tighter local lending in some counties. To bridge the gap, the Mississippi Home Corporation (MHC) — the state's housing finance agency — runs a small but practical menu of programs that pair a competitive first mortgage with forgivable down payment assistance, which is exactly what cash-strapped first-time buyers need.
MHC's workhorse is the Smart6 program: a 30-year fixed-rate first mortgage open to both first-time and repeat buyers, with a household income cap around $110,000. Smart6 unlocks the Smart Solution Second down payment assistance — a second mortgage of roughly $6,000 to $7,000 at 0% interest. The key feature is that it's fully forgivable: there are no monthly payments, and after 10 years of keeping the home as your primary residence, the entire balance is wiped out. If you sell or move before the decade is up, you repay the remaining amount. That structure makes it genuinely free money for buyers who plan to stay put, covering most or all of the down payment on an FHA loan in Mississippi's lower-priced markets.
State Programs
Smart6
First mortgage (30-year fixed) that unlocks forgivable down payment assistanceSmart Solution Second
Forgivable (0% interest) second mortgage for down payment/closing costsMortgage Revenue Bond 7 (MRB7)
First mortgage with deferred, forgivable down payment assistanceFederal Programs Available in Mississippi
These nationwide programs can be combined with Mississippi state assistance for maximum benefit.
FHA Loan Program
Low down payment mortgageVA Home Loan
Zero down payment mortgageUSDA Rural Development Loan
Zero down payment mortgageTips for First-Time Buyers in Mississippi
MHC also runs the Mortgage Revenue Bond 7 (MRB7) program, a newer offering aimed squarely at first-time buyers, veterans, and anyone purchasing in a designated target area. MRB7 provides a competitive interest rate plus up to $7,000 in down payment assistance structured as a deferred, no-interest loan that's also forgivable after 10 years. Income limits on MRB7 vary by county, so it can reach buyers in higher-cost areas. You generally can't double up the second-mortgage assistance across both programs, but a lender can run the numbers to see whether Smart6 or MRB7 gives you the better combination of rate and forgivable cash for your situation and location.
Mississippi's tax landscape is moving in homeowners' favor. The state levies a flat individual income tax that has been phasing down on a fixed schedule: it dropped to 4.0% for 2026 (from 4.4% in 2025) and is legislated to keep falling toward 3% by 2030 — and the state has signaled an eventual goal of full elimination. Property taxes are among the lowest in the nation, with an effective rate roughly 0.58%-0.67% of value; on a $253,000 home, that's only about $1,500-$1,700 a year. The homestead exemption sweetens it further: declaring your home a primary residence exempts the first $7,500 of assessed value and delivers up to a $300 annual credit against your property-tax bill.
Local assistance in Mississippi tends to flow through city and county HOME-funded programs rather than big standalone grants — Jackson, Gulfport, and Hattiesburg have all administered down payment or rehab assistance at various points, though amounts and availability change with federal funding cycles, so confirm what's open before you rely on it. Military buyers are well served too: Keesler Air Force Base in Biloxi, Columbus Air Force Base, and Naval Construction Battalion Center Gulfport mean VA loans pair naturally with MHC programs along the coast and in the northeast. Start by booking a free session with a HUD-approved housing counselor and completing the homebuyer education course MHC requires — it's the gateway to the forgivable second mortgage and to a lender who can confirm current income limits.
Frequently Asked Questions
For educational purposes only -- not financial or tax advice. Program details, eligibility requirements, and benefit amounts are subject to change. Verify all information directly with the administering agency before applying. Last verified: June 15, 2026.