Know Before You Own Free Guide Calculator
Home buyer help · Alabama

Buying a home in Alabama: the help you may qualify for.

Down payment assistance, property tax exemptions and veteran benefits in Alabama, gathered from official state sources and explained in plain English. Every program has its own rules, so check with the agency before you count on it.

See my monthly cost Check my exemptions
Last checked November 11, 2026Sources state agencies

Down payment and closing cost help

From the Alabama Housing Finance Authority.

  • Step Up

    4% of the price, up to $10,000

    With an HFA Advantage conventional, FHA, VA or USDA loan, for new or existing homes. Not limited to first-time buyers.

  • First Step

    Up to $10,000 or 4%

    Lower-rate bond loan for first-time buyers, when funds are available.

Who qualifies: Credit score 640+, debt-to-income 45% or lower, income limits, homebuyer education.

Property tax exemptions and credits

Exemptions lower your home’s taxable value or your bill. Most aren’t automatic: you apply with your county revenue office. Alabama’s official exemptions information.

For homeowners who live in the home

  • Regular homestead exemption

    $4,000 of assessed value (state) and $2,000 (county)

    For a single-family home you own and live in on the first day of the tax year, with up to 160 acres. Some counties and cities allow up to $4,000.

    How to apply: With your county revenue office. (Ala. Code §40-9-19)

For homeowners 65 and older

  • Age 65 or older

    Exempt from state property tax, and more with lower income

    At 65, you're exempt from the state portion. With income under $12,000, you also get $5,000 off the county portion, and with combined federal taxable income of $12,000 or less, you may be exempt from all property taxes.

    How to apply: With your county revenue office. (Ala. Code §§40-9-19 to 40-9-21)

For homeowners with disabilities

  • Permanent and total disability

    Exempt from all property taxes on your home

    Any age, no income limit. A physician must confirm the disability on the Physician's Affidavit (PT-PA-1).

    How to apply: With your county revenue office. (Ala. Code §40-9-19)

For surviving spouses and other situations

  • Blind homeowner exemption

    Exempt from state property tax, plus $5,000 off county

    Any age, no income limit.

    How to apply: With your county revenue office. (Ala. Code §40-9-19)

Want to see which ones fit you? Answer a few questions in the property tax exemptions checker.

If you serve or served

  • VA home loan: available in every state, often with no down payment and no monthly mortgage insurance. You’ll need a Certificate of Eligibility. See VA home loans.

Your next steps

  1. Work out a monthly cost you’re comfortable with in the home cost calculator. It also lists Alabama’s programs with the loans you may qualify for.
  2. Talk with a free or low-cost HUD-approved housing counselor. Find one near you.
  3. Ask each lender which of these programs they work with, and compare Loan Estimates from at least three.
  4. Follow the step-by-step home buyer’s guide from budget to keys.

Common questions

Does Alabama have down payment help for home buyers?

Yes. Programs from the Alabama Housing Finance Authority include Step Up, First Step. Credit score 640+, debt-to-income 45% or lower, income limits, homebuyer education. Funding and rules change often, so check with the agency or a participating lender.

Does Alabama have a homestead or property tax exemption for homeowners?

Yes. Homeowners who live in the home may qualify for: Regular homestead exemption. Apply with your county revenue office; most exemptions aren't automatic.

Is there help for veterans buying a home in Alabama?

VA home loans are available in every state, often with no down payment.

Sources: Alabama Housing Finance Authority and Alabama’s property tax office, linked above. Last checked November 11, 2026. Programs, amounts, income limits and funding change often, sometimes every year. Know Before You Own doesn’t recommend lenders or take referral fees. This page is general education, not legal, tax or lending advice. See other states.