Louisiana homebuyer guide

HomeStart, CAFA or JPFA? Choosing a Louisiana bond program and stacking local help

Louisiana has three bond-funded first mortgages with 4% help: LHC HomeStart, CAFA First Home and JPFA. You can use only one. Here's how their forgiveness, limits and rules compare.

The short version: LHC's HomeStart, CAFA First Home and the Jefferson Parish Finance Authority's programs each come with their own first mortgage, so you pick one. They forgive their second mortgages on different schedules, and that matters if you might sell or refinance within five years. City and parish programs like New Orleans' Soft Second may add more, but confirm they'll layer on your chosen loan.

Louisiana buyers have more choices than most people realize, which also means more chances to pick the wrong one. The big decision isn't "grant or loan." It's which program's first mortgage you take, because each bond program brings its own, and you can't mix them. Here's how they compare, and how to avoid the mistakes that turn free money into a bill.

Rule one: one bond program per house

LHC's HomeStart family, the Capital Area Finance Authority's CAFA First Home, and the Jefferson Parish Finance Authority's (JPFA) programs each pair their assistance with their own first mortgage. So you can't use CAFA's 4% and HomeStart's 4% on the same house. Choose the program, then the loan type.

The programs side by side

Program	Where	First-time buyer?	Help	How it's forgiven
HomeStart Advantage (LHC)	Statewide	No	4% of the final first mortgage	All at once after 60 months; due if you sell or refinance before then
HomeStart Assist (LHC)	Statewide, parish income limits	Yes, waived for veterans and targeted tracts	4% of the original first mortgage	After 5 years of occupancy
HomeStart Plus (LHC)	Laura, Delta and Ida parishes; not in flood hazard areas	Yes	Up to 20% of price (max $55,000), plus up to $5,000 for closing	1/120 a month over 10 years
CAFA First Home	61 parishes, not Orleans or Jefferson	Yes, waived for veterans and targeted tracts	4% of the note	Nothing in months 1–36, then 1/24 a month through month 60
JPFA Series 2025A	Jefferson Parish	Yes, waived for veterans and targeted tracts	4% of the final loan plus a below-market rate	After 5 years
JPFA Comfort of Home	Jefferson, St. Tammany, St. Charles, St. Bernard	No	A set percentage of the note	All at once after month 60

Two more LHC options: HomeStart Ready is a 30-year fixed loan for incomes up to $99,000 with no 4% second, and the AIS grant adds 0.50% to 1.00% for conventional borrowers at or under 80% of area median income.

Why the forgiveness schedule matters

If you're sure you'll stay five years, the schedules end in the same place: nothing owed. If you're not sure, they're very different.

Example (illustrative): $8,000 of assistance, and you sell after 48 months.

HomeStart Advantage: it isn't forgiven until month 60, so the full $8,000 is due at the sale.
CAFA: 12 of the 24 monthly forgiveness steps have passed (months 37 through 48), so half, about $4,000, is forgiven and about $4,000 is due.
HomeStart Plus (on a larger amount): 48 of 120 months forgiven.

Refinancing counts as well. On HomeStart, refinancing within the five years makes the balance due. A rate drop in year three can look tempting until you add the assistance back in.

Rates and the JPFA difference

HomeStart rates are set daily by LHC, and lenders can't buy them down. JPFA's 2025A bond program advertised a below-market rate, 5.85% on FHA, VA and USDA and 6.10% on Fannie and Freddie, as of a March 12, 2026 rate cut. It also stacks with JPFA's $2,500 Heroes to Homeowners grant for education and healthcare workers, first responders and military. Rates change, so compare the full payment on the day you lock.

The recapture tax, explained without the scare

Some bond-financed first mortgages carry a federal "recapture" tax if you sell within nine years. LHC notes it may apply to HomeStart Assist. Here's why most people never pay it. Per the IRS Form 8828 instructions, you owe it only if all of these are true:

You sell or give away the home within nine years.
You make a gain on the sale.
Your income that year is above the limit in the notice your lender gives you at closing.

Even then, the tax is capped at 50% of your gain. Refinancing without selling doesn't trigger it. Keep the notice with your closing papers.

Stacking city and parish help

Most local programs are funded with federal CDBG or HOME money and are separate from the bond programs. They include:

New Orleans' Direct Homebuyer Soft Second
Jefferson Parish's First-Time Homebuyer Assistance Program, up to $50,000, or $60,000 in Kenner
Alexandria's Homebuyer Assistance Program
Shreveport's HAPPI
The Lafayette programs

They usually layer onto an approved first mortgage. What we couldn't confirm is whether each one pairs with an LHC HomeStart loan specifically. Ask both the local office and your lender before you count on the combination. Many local programs also want their own homebuyer class, lender list and income test.

Mistakes that turn help into a bill

Moving out early. These are owner-occupancy programs. Renting the house out or moving away inside the forgiveness period can make the balance due.
Signing before you've picked a lender. HomeStart needs a fully signed purchase agreement to reserve funds, and the clock to close is 60 days. Line up a participating lender first.
Skipping the class. First-time buyers need homebuyer education before a HomeStart closing. CAFA wants it from everyone on the title.
Buying in a flood hazard area with HomeStart Plus. It isn't allowed. See the flood guide.
Waiting on local money that's run out. City programs are often first come, first served. Ask about funding before you write the offer.

A simple way to choose

Not a first-time buyer? Start with HomeStart Advantage or JPFA Comfort of Home.
First-time buyer in a Laura, Delta or Ida parish, at or under 80% AMI, and not in a flood zone? Price HomeStart Plus first.
Might move within five years? Lean toward CAFA's partial forgiveness if you're in its parishes.
In Jefferson Parish? Compare JPFA's below-market rate against HomeStart's.
Then ask what your city or parish adds.

For cost differences across the big markets, see New Orleans vs. Baton Rouge vs. Lafayette. And to find out which programs you actually qualify for, check your eligibility.

Questions people ask

Can I combine HomeStart with CAFA First Home?

No. Each comes with its own first mortgage, so you choose one. City and parish programs funded with CDBG or HOME money may layer on top, but confirm with the program and your lender.

When is HomeStart Advantage forgiven?

In full after 60 months of owner occupancy. If you sell or refinance before then, the balance is due.

How does CAFA First Home forgiveness work?

Nothing is forgiven in months 1 through 36. Then 1/24 is forgiven each month, so it's fully forgiven after month 60.

Will I owe the recapture tax if I sell?

Only if you sell within nine years, make a gain, and your income that year is above the limit in your closing notice. Even then it's capped at 50% of the gain.

Is HomeStart Plus available in New Orleans and Baton Rouge?

Yes. Orleans and East Baton Rouge are on the Hurricane Ida list, and Lafayette is on the Delta list. The home can't be in a Special Flood Hazard Area, and income must be at or under 80% of area median income.

Free download: our Louisiana homebuyer checklist. The paperwork, the steps, the programs and the questions worth asking, all on one printable page. Get the checklist