Targeted areas: higher limits, and the only way a repeat buyer uses First Step
Program and regulatory figures verified October 5, 2026. Details change; confirm your scenario with us.
Targeted status changes three things at once on First Step, and one of them decides whether a repeat buyer can use the programme at all.
What targeting changes
Three things, and the third is the one people miss.
| Non-targeted | Targeted | |
|---|---|---|
| Income limit, 1–2 people (most counties) | $89,500 | $107,400 |
| Income limit, 3+ people (most counties) | $102,925 | $125,300 |
| Sales price limit | $566,355 | $692,211 |
| Who may buy | First-time buyers only | First-time OR repeat |
The income columns move by exactly 20% at the 1–2 level and the price cap by $125,856. But the eligibility change is the one that turns a decline into an approval. Every area's figures.
★ Repeat buyers and the sentence that contradicts itself
AHFA's own programme overview describes First Step as offering below-market rates "to first-time or repeat homebuyers," with no qualification attached. Taken alone that reads as though anyone can use it.
The detail pages are precise, and they are the ones to trust. In targeted areas eligible borrowers may be first-time or repeat. In non-targeted areas "you must not have owned a home in the previous three years." The FAQ states it as a rule:
"Are repeat homebuyers eligible for the First Step Program? Yes. If a borrower(s) is not classified as a first-time homebuyer, they must purchase a property in a targeted area to be eligible."
So a repeat buyer's whole access to First Step — and to its below-market rate — turns on the address. If the address is not targeted, Step Up has no first-time rule at all.
★ The exemption that works anywhere
Veterans do not need a targeted address. From the same FAQ: "Veterans & their spouses are exempt from the three-year ownership rule as long as the veteran has not financed a home using MRB or he/she was not dishonorably discharged."
Two conditions, both easy to check: no previous mortgage-revenue-bond financing, and not a dishonorable discharge. It is claimed on AHFA's Veterans Exemption Application Declaration Form, and it covers spouses as well as the veteran.
For a veteran who already owns a home and is buying another as a primary residence anywhere in Alabama, this reopens First Step and its below-market rate completely. It is the single most valuable line in AHFA's FAQ for the people it applies to.
What makes an area targeted?
AHFA's definition: "a qualified census tract, or an area identified previously as economically distressed. A targeted area may be an entire county or may be a particular census tract or other designated specific area within that county. Other counties may be all non-targeted."
So it is a statement about the neighbourhood, not about the buyer, and it can change at the street level inside a single county.
How do I find out about a specific address?
AHFA publishes an interactive map, built on PolicyMap, where targeted areas appear in blue and non-targeted in grey. Your lender checks it at reservation.
Two practical notes from AHFA. If an address will not resolve — a P.O. box, or a route number rather than a street address — you can search by ZIP code and zoom, or enter latitude and longitude. And where the map shows an area of mixed targeted and non-targeted tracts, AHFA makes the determination itself on a submitted Target Map ID Request Form. Do not guess on a boundary property; get the determination in writing before the offer.
The paperwork difference
Targeting also changes what you have to prove. AHFA reviews the 1003, the tri-merge credit report, and a Drive, Fraud Guard or MERS report to establish first-time status — and adds: "This documentation is only required if the borrower(s) is purchasing a property in a non-targeted area."
A first-time homebuyer, for this purpose, is someone with no ownership interest in a principal residence in the three years prior to execution of the initial loan application. The full eligibility picture.
Frequently asked questions
What is a targeted area in Alabama?
AHFA defines it as a qualified census tract, or an area previously identified as economically distressed. A targeted area may be an entire county or a particular census tract within a county, and some counties are entirely non-targeted.Can repeat buyers use AHFA First Step?
Only in a targeted area. AHFA's First Step FAQ states that a borrower not classified as a first-time homebuyer must purchase a property in a targeted area to be eligible. In non-targeted areas the borrower must not have owned a home in the previous three years. Step Up has no first-time buyer requirement anywhere.Are veterans exempt from the Alabama first-time buyer rule?
Yes, statewide. AHFA exempts veterans and their spouses from the three-year ownership rule provided the veteran has not previously financed a home using mortgage revenue bonds and was not dishonorably discharged, claimed on AHFA's Veterans Exemption Application Declaration Form.How much do targeted area limits increase in Alabama?
Income limits rise by 20% at the one to two person column and to 1.40 times the area median income for three or more people, so in most counties $89,500 becomes $107,400 and $102,925 becomes $125,300. The sales price limit rises from $566,355 to $692,211.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.