AHFA counts the people who sign, and only they can be on the deed
Program and regulatory figures verified October 5, 2026. Details change; confirm your scenario with us.
Alabama measures income the narrow way, which helps a lot of households. It also attaches a condition to that generosity which can be awkward if nobody mentions it early.
What AHFA counts
Only the borrowers. The First Step FAQ asks and answers it in two lines:
"Will all household income be used to determine income eligibility? No. Only the income of the borrower(s) will be used in the income eligibility determination."
So the question is not who lives in the house. It is who signs the note.
Why that matters
Because the alternative rule — count everyone under the roof — disqualifies people who are not buying anything and have no claim on the property. Three ordinary Alabama situations that pass here and fail in household-income states:
- A buyer whose adult child lives at home and works full time.
- A buyer whose parent has moved in, with a pension and Social Security.
- Two friends sharing a house where only one is on the loan.
On First Step that can be the difference between clearing $89,500 and not. The county table.
★ The condition attached to it
AHFA ties the deed to the note, and says why:
"Are there any restrictions on who can hold title to the property? Yes. Because income eligibility is based solely on the income of the borrower(s) qualifying of the loan, title may only be held in the names of those persons who sign both the note and the mortgage (borrowers)."
That is a logical rule rather than a bureaucratic one. If AHFA ignored a non-borrower's income but let them onto the deed, the income test would mean nothing — a high earner could own the house while a low earner qualified for it.
The practical effect: you cannot add someone to the deed at closing who is not on the loan. Not a parent helping with the down payment, not a partner who is not borrowing, not a sibling. If they need to be on title, they have to be on the note and the mortgage — and then their income counts.
This is worth settling early, because it is the kind of thing that surfaces at the closing table when someone assumes a name can be added. The rest of the eligibility picture.
So household size is irrelevant?
On Step Up, yes, entirely — AHFA applies $172,800 "regardless of household size or location."
On First Step, household size picks which column you use, one-to-two or three-or-more, and the three-or-more column is 1.15 times the area median income in non-targeted areas and 1.40 times it in targeted ones. So a larger family gets a higher ceiling — it just does not get a higher income counted against that ceiling.
| Most Alabama counties | 1–2 people | 3+ people |
|---|---|---|
| Non-targeted | $89,500 | $102,925 |
| Targeted | $107,400 | $125,300 |
What about a co-signer?
AHFA does not publish a non-occupant co-signer allowance of the kind some agencies offer, and we are not going to describe one it has not published. What AHFA does say is clear enough to plan around: income eligibility rests on the borrowers, and title rests on the same people.
If a family member wants to help, the useful questions are whether they are going on the loan — in which case their income counts and they can be on title — or whether they are gifting funds, which is a different conversation entirely and does not touch the income test. Worth a call before you structure it.
Frequently asked questions
Does AHFA count household income or borrower income?
Borrower income only. AHFA's First Step FAQ states that all household income is not used and that only the income of the borrowers will be used in the income eligibility determination.Can someone not on the loan be on the deed in Alabama?
No. AHFA restricts title to the people who sign both the note and the mortgage, because income eligibility is based solely on the income of the borrowers qualifying for the loan.Does a roommate's income count toward AHFA limits?
No, provided they are not on the loan. Only borrower income is counted, so a working adult child, a parent who has moved in or a roommate does not affect the income eligibility determination.Does household size affect AHFA income limits?
On First Step, yes: household size selects the one to two person or three or more column, with the larger column set at 1.15 times area median income in non-targeted areas and 1.40 times in targeted areas. Step Up applies $172,800 regardless of household size or location.Mike Certo · NMLS #260555 · Cornerstone First Mortgage NMLS #173855 · Equal Housing Lender. Educational content about financing, not a loan commitment and not legal or tax advice. AHFA program terms, income limits and sales price limits are set by the Alabama Housing Finance Authority and change; figures here carry the date we verified them against AHFA's published documents. AHFA down payment assistance is an amortizing second mortgage with a monthly payment, not a grant. Federal recapture tax may apply on First Step bond loans; consult a tax advisor. Loans are subject to borrower and property qualification.