New Orleans Direct Homebuyer Soft Second: up to $55,000
First-time buyers purchasing in Orleans Parish with household income at or below 80% of area median income can get a deferred soft second mortgage of up to $55,000, plus up to $5,000 toward closing costs, from the City's Office of Community Development.
Direct Homebuyer Soft Second Mortgage Assistance Program
Money may run out
City of New Orleans (Orleans Parish)
Help available
Up to $55,000 soft second (down payment/gap) plus up to $5,000 closing costs (CDBG pays at most 50% of total closing costs). The page's 'Assistance Available' box shows the two as alternatives ('OR'), while the body text says a buyer may receive both; confirm with OCD.
Kind of help
Deferred loan, due at sale or refinance
Who it's for
First-time homebuyers (no home owned in the past 3 years) buying in Orleans Parish
Income cap
80% AMI (2026 New Orleans HUD income chart linked on the page; dollar figures not captured)
Price cap
$324,000 maximum sales price
Only for first-time buyers?
Yes
Also worth knowing
HUD-approved homebuyer education; first mortgage from a City-approved lender (2026 lender list); state-approved closing agency; home in Orleans Parish
$1,000,000 in CDBG funds available as of January 2026 (page last updated 7/31/2026); the City says it adds funds as they become available. Contact Cedrica Sartin, 504-658-4244, cedrica.sartin@nola.gov. The older nola.gov/softseconds page (2019 $3M funding, updated 2024) is superseded.
Want a heads-up? Direct Homebuyer Soft Second Mortgage Assistance Program works from a limited pot that can run dry. Ask us to tell you when a new round of money opens.
How the soft second works
The City of New Orleans Office of Community Development (OCD) records a deferred "soft second" mortgage behind your first mortgage. It fills the down payment and the gap between what a lender will lend and the sales price, up to $55,000. Closing-cost help of up to $5,000 is offered too, but the federal CDBG money behind it can cover no more than half of your total closing costs.
One point is unsettled: the program page's summary box shows the $55,000 and the $5,000 as alternatives, while its body text says a buyer may receive both. Ask OCD which reading applies before you build a budget around $60,000. Money is limited as well. The City reported $1,000,000 in CDBG funds available as of January 2026 and says it adds more as funds arrive.
Who qualifies in Orleans Parish
You need to be a first-time buyer, defined as not having owned a home in the past three years, with household income at or below 80% AMI on the 2026 New Orleans HUD chart that the City links. The home must be in Orleans Parish and sell for no more than $324,000. Three more requirements apply: a HUD-approved homebuyer education course, a first mortgage from a lender on the City's 2026 approved list, and a state-approved closing agency. The Orleans Parish guide covers the local school and public safety employers plus the state program limits.
Pairing it with HERO or HomeStart Advantage
NORA's HERO soft second can be layered with this City soft second, with NORA agreeing to subordinate its lien. That combination only applies if you buy one of the homes NORA-selected developers build or renovate. Whether the City's second can sit behind an LHC HomeStart Advantage first mortgage is not addressed in either program's materials, so a participating lender confirms whether they combine. The City's 80% AMI test is usually the tighter income rule compared with the state program's $125,000 cap.
A deferred second behaves differently from a grant or a forgivable loan. Our guide to grant, forgivable and repayable assistance explains what that means if you sell or refinance.
How to apply
Start by choosing a lender from the City's 2026 approved list and getting pre-approved, since the first mortgage must come from that list. Complete a HUD-approved homebuyer education course so your certificate is ready, and keep your offer at or under $324,000. Because funds are first available, first used, reach out to OCD early: the program contact is Cedrica Sartin at 504-658-4244 or cedrica.sartin@nola.gov. Before calling, you can check your eligibility for the state program in a few minutes.
What people ask about Direct Homebuyer Soft Second Mortgage Assistance Program
Can I get both the $55,000 soft second and the $5,000 closing-cost help?
Possibly. The City's page gives conflicting signals, listing them as alternatives in one place and as combinable in another. Ask OCD directly before you count on both.
What is the price limit for the New Orleans soft second?
The maximum sales price is $324,000, and the home must be in Orleans Parish.
Is the New Orleans soft second still funded in 2026?
The City reported $1,000,000 in CDBG funds available as of January 2026 and adds money as it becomes available, so check with OCD at 504-658-4244 before you apply.
Summarized from the program's official page as of November 2026. Funding and rules can change, so confirm the current terms with the program or a lender who takes part. Louisiana Down Payment Assistance has no connection to this program.
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