Overview
Nebraska is one of the Midwest's better-kept secrets for first-time buyers: the statewide median sits around $277,000, well under the national figure, and Omaha and Lincoln still offer real starter homes. The state's housing finance agency, the Nebraska Investment Finance Authority (NIFA), pairs below-market mortgage rates with down payment help. The real challenge here isn't the purchase price — it's the property tax bill, which ranks among the highest in the country. The upside is that a modest down payment goes a long way, and NIFA is built to bridge that gap.
NIFA's flagship down payment tool is the Homebuyer Assistance (HBA) Program. It layers a second mortgage on top of a NIFA first mortgage worth up to 5% of the purchase price, capped at $10,000. Unlike a grant, this is a repayable loan — but on gentle terms: 1% interest over a 10-year (120-month) term, with a small monthly payment. You must be a first-time buyer (no ownership in the last three years, waived in target areas or for veterans), contribute at least $1,000 of your own money, stay under income limits (roughly $174,000 household), and buy under the purchase-price cap (about $470,000 for a single-unit home). Homebuyer education is required.
State Programs
Homebuyer Assistance (HBA) Program
Repayable second mortgage (1% interest, 10-year term)First Home Grant
Grant (no repayment)Military Home Program
Discounted-rate first mortgage (government loans)Welcome Home / Welcome Home Assistance (WHA)
First mortgage for repeat buyers; optional repayable second (1% interest) for DPAFederal Programs Available in Nebraska
These nationwide programs can be combined with Nebraska 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 Nebraska
If your income is genuinely low, NIFA's First Home Grant is the better deal: $5,000 that never has to be repaid, reserved for households at or below 50% of Area Median Income and paired with an HBA first mortgage. Funding is limited and first-come, first-served, so it comes and goes. Veterans and active-duty service members should look at the Military Home Program, which offers NIFA's lowest rate with no first-time-buyer requirement. Repeat buyers who don't qualify for First Home can use the Welcome Home program and its Welcome Home Assistance second loan. These programs stack with a NIFA first mortgage, not with each other.
Nebraska's income tax just got friendlier: under LB 754, the top rate fell to 4.55% for 2026 (from 5.20% in 2025) across a simplified three-bracket system, and it's scheduled to drop again to 3.99% in 2027. Property tax is the sting — the effective rate averages about 1.50%, so a $277,000 home carries roughly $4,100 a year, and pricier homes climb fast. There's no broad owner-occupant homestead exemption, but a generous homestead exemption exists for homeowners 65 and older (full relief under about $37,000 single / $43,400 joint income, with a sliding scale above) and for 100%-disabled veterans. Applications run February 1 through June 30 with your county assessor.
Beyond NIFA, look local. Omaha and Lincoln periodically run their own down payment and rehab assistance through groups like Front Porch Investments and city housing offices — amounts vary and funding cycles, so confirm before you count on it. Active-duty buyers near Offutt Air Force Base (Bellevue) can combine a VA loan with NIFA's Military Home rate. Your smartest first move: take a free homebuyer education class through a HUD-approved housing counseling agency, since NIFA requires it anyway, then connect with a participating NIFA lender to lock in your rate and assistance.
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.