Step Up: $172,800, any household, any county, no price cap
Program and regulatory figures verified October 5, 2026. Details change; confirm your scenario with us.
If you have been told you earn too much for Alabama down payment assistance, there is a good chance you were measured against the wrong programme.
One number, no asterisks
AHFA's language on Step Up is unusually direct: participants who earn $172,800 or less are eligible "regardless of household size or location."
Read that against how these programmes normally work and the difference is stark. A typical state agency publishes a grid — county down one axis, household size across the other, sixty-odd rows, updated annually. Step Up publishes one figure that applies to a single buyer in Mobile and a family of six in Huntsville alike.
| First Step | Step Up | |
|---|---|---|
| Income limit | $89,500 – $161,140 depending on area, household size and targeting | $172,800 |
| Sales price limit | $566,355 / $692,211 | None published |
| First-time buyer | Required unless targeted or veteran | Not required |
| Recapture tax | Yes | No |
Who this actually rescues
Four households that fail First Step and pass Step Up without difficulty:
- A two-earner couple in a smaller county. Two solid incomes in a county at the $89,500 row clear First Step's limit easily and sit far inside $172,800.
- A larger family. First Step's 3+ column helps, but only to $102,925 in most counties. Step Up does not care how many people live there.
- A repeat buyer outside a targeted area. First Step is closed to them entirely; Step Up has no first-time rule.
- Anyone buying above the price caps — the cap simply does not exist on Step Up.
Mike's view: this is the most commonly missed fact about Alabama assistance. People hear "down payment assistance," picture a low-income programme, check a limit somewhere near $89,500, and conclude it is not for them. The number that actually applies to most of them is nearly double that.
What Step Up does not give you
The below-market rate. First Step is funded with tax-exempt mortgage revenue bonds, and that funding is what lets AHFA price its first mortgage under the market. Step Up's first mortgage is priced at market.
Over thirty years that rate difference is worth more than the $10,000 of assistance the two programmes share, so this is not a free upgrade. It is the right answer when First Step will not take the file, and the wrong one when it would have. How to decide.
What still applies on Step Up
Everything that is not an income or price test:
- Credit score 640 or higher; debt-to-income 45% or lower.
- Homebuyer education before closing, certificate dated within a year of reservation.
- Purchase only — refinancing an existing mortgage does not qualify.
- An Alabama home, occupied as your primary residence within 60 days of closing.
- FHA, VA, USDA or HFA Advantage conventional, through a participating lender.
- The assistance is still the same 10-year amortizing second with a monthly payment. What that means.
And if your income is at the other end of the range — at or under 80% of your county's area median — the Affordable Income Subsidy Grant stacks on top, and that one is never repaid.
Frequently asked questions
What is the Step Up income limit in Alabama?
$172,800. AHFA applies it regardless of household size or location, so the same figure covers a single buyer and a large family, in any of Alabama's 67 counties.Does Step Up have a purchase price limit?
AHFA publishes no sales price limit for Step Up. That makes it the only AHFA purchase program without one; First Step is bound by IRS limits of $566,355 in non-targeted areas and $692,211 in targeted areas.Do I need to be a first-time buyer for Step Up?
No. Step Up carries no first-time homebuyer requirement and no recapture tax. The home must still be in Alabama and occupied as your primary residence within 60 days of closing, and refinancing does not qualify.What credit score do I need for Step Up?
640 or higher, with a debt-to-income ratio of 45% or lower. Those requirements are the same across every AHFA program, as is the homebuyer education requirement.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.