Is home ownership a longtime dream and a goal you have been working towards, but you just can’t seem to save enough money to make it happen? If you have good credit and sufficient income to manage house payments, but the downpayment and closing costs are holding you back, you will be happy to know that you can actually buy a home. There are several Down Payment Assistance programs out there to help buyers secure their own home.
Each Down Payment Assistance program has different requirements for qualification and different repayment scenarios. You should review in detail each of these options with a qualified mortgage lender who can explain the pros and cons of each and help you decide if this is right for you.
Pros and Cons
Keep in mind that some of the assistance is actually “free money” but some of the assistance is just deferred payment, meaning that the assistance is financed into the loan. And/Or the loan comes with a substantially higher interest rate. Understanding where the money comes from and how you pay it back is very important in determining if it’s right for you. Also, not everyone will qualify. You may have great credit and a good job, but if you make too much money, you may not qualify. Also, if you qualify within the income brackets, but your credit needs some work or your work history does not meet the guidelines, you may not qualify. Some programs are subject to income and property value limitations and some programs, which have government subsidies may have a recapture tax if the home is sold too early.
There is no cost or obligation to see if you do qualify, so it’s definitely worth speaking to a Qualified Lender about the programs.
Not all Lenders work with these programs. There are lenders who will “give it a try” but they are not experienced with the complexities of the qualification process and the paperwork involved. They may end up wasting your time and possibly your money or get your hopes up to only be disappointed later. Please use a qualified lender if you want to consider using one of these programs, as it can be a confusing and complicated process that requires an experienced lender who can explain all of it to you.
Supreme Lending – Qualified Lender
Wendy Dabrusin, Sr. Loan Officer
NMLS # 208235
Mobile: (512) 517-7858
Nate Beita, Sr. Loan Officer
Se Habla Español
Office: (512) 524-8309
Mobile: (512) 431-7055
Neighborhood LIFT for Greater Austin
Business and Community Lenders (BCL of Texas) is proud to be part of the NeighborhoodLIFT program in collaboration with Wells Fargo and NeighborWorks® America. You can leverage up to $7,500 in down payment assistance to put your dream of purchasing a home within reach. Please note: You must take home buyer education with an approved agency, like Supreme Lending, to qualify for this program. Home must be located in Bastrop, Caldwell, Hays, Travis or Williamson County.
My First Texas Home (“MFTH”)
The My First Texas Home (MFTH) program offers home loans with budget-friendly monthly payments and down payment and closing cost assistance of up to 5 percent of the mortgage loan, a welcome boost for many low income first time homebuyers.
Buyers can also maximize their benefits of owning a home by combining a My First Texas Home (MFTH) loan with the Department’s Texas Mortgage Credit Certificate Program. The Texas Mortgage Credit Certificate features a dollar-for-dollar reduction on a homebuyer’s federal tax liability.
Texas Mortgage Credit Certificate (MCC) Program
Texas Mortgage Credit Certificate (MCC) Program First-time homebuyers with low or moderate incomes are eligible for this program, which helps borrowers lower their tax liability by turning their annual mortgage interest payments into a federal tax credit. The size of the credit is 40 percent of the yearly mortgage interest paid, but cannot exceed $2,000.
Hill Country Home Downpayment Assistance
The Travis County Housing Finance Corporation is pleased to offer the Hill Country Home Down Payment Assistance (DPA) Program! The program is designed to help homebuyers obtain FHA, VA or USDA-RD loan financing to purchase a home anywhere in Travis County, including the City of Austin. A lack of funds for the down payment is often a significant obstacle to homeownership. In an effort to remove this barrier, low to moderate income homebuyers that qualify for the Hill Country Home DPA program will receive a 30-year fixed rate loan, with a non-repayable grant of a total of 4% or 5% of the loan amount to use for down payment or closing cost assistance. Each qualified homebuyer family will receive a gross 4%, 5% or 6% non-repayable grant for down payment assistance and closing costs based on the initial principal balance of the mortgage loan. In each case , a portion is charged by the participating lender, so net down payment assistance ranges from 2.5% to 4.5% depending on qualification. For more information on this, please contact a participating lender.
Financing is available for new or existing homes, and can include single-family homes, condominiums, or townhomes. Manufactured homes are not permitted to participate in the program. Unlike many other DPA programs, the Hill Country Home DPA Program is not restricted to first-time homebuyers, though buyers must occupy the home as their principal residence. The Program offers an interest rate on the First Mortgage Loan that is slightly above market rate, so it is the borrower’s decision and choice to receive the First Mortgage Loan under the Hill Country Home DPA Program with the net 3.5% DPA grant, or 2.5% DPA grant depending on qualifying factors, rather than to receive another 30-year fixed rate mortgage loan without DPA at a lower rate from its lender or from another lender. The interest rate for the program varies daily based on market conditions – ask your lender for the current rate.
SETH 5 Star Texas Advantage Program
SETH 5 Star Texas Advantage Program provides eligible homebuyers Down Payment and Closing Cost Assistance in the form of a Grant. There are several options of assistance available. Borrowers will select the amount of assistance and loan option that best meets their needs. The maximum amount of assistance provided is our 6% Grant, which is 6% of the total loan amount. Borrowers using our Freddie Mac/Conventional Mortgage Option meeting our Affordable Income Subsidy Limits may be eligible for an additional Grant up to 2% of the loan amount.
There is no repayment or recapture period for the assistance provided. There is no second lien on the property. This program DOES NOT have a First Time Homebuyer requirement. Buyers must be income eligible and purchasing a home in one of the program areas. All buyers on the mortgage loan will need to complete the on-line SETH Homebuyer Education Class.
The mortgage rate for this program is published daily for Lenders on the eHousingplus.com website- visit the SETH Program Page. You must be an approved Lender to provide this program to your clients.
This program is available for the entire State of Texas except the city limits of El Paso, Grand Prairie, and Travis County.
Homes for Texas Heros
Offered through the State Affordable Housing Corporation (and not through the Texas Department of Housing and Community Affairs), this loan program is designed specifically for allied health faculty member, corrections officer, county jailer, emergency medical services personnel, firefighter, juvenile corrections officer, nursing faculty member, peace officer, professional educator, public security officer and veterans. This is a 30-year, fixed-interest mortgage program with down-payment assistance of 3 percent, 4 percent or 5 percent that does not need to be repaid. There is no first-time buyer requirement. There is also a Mortgage Credit Certificate for those who qualify.
Texas Bootstrap Loan Program
The Texas Department of Housing and Community Affairs (Department) administers the Owner-Builder Loan Program, also known as the Texas Bootstrap Loan Program (Bootstrap).
The Texas Bootstrap Loan Program is a self-help housing construction program that provides very low-income families (Owner-Builders) an opportunity to purchase or refinance real property on which to build new housing or repair their existing homes through “sweat equity.” Owner-builder’s household income may not exceed 60% of Area Median Family Income.
All Owner-Builders are required to provide at least 65% of the labor necessary to build or rehabilitate their housing by working with a state-certified Nonprofit Owner-Builder Housing Provider (NOHP). There are various ways for how Owner-Builders may fulfill their sweat equity requirement. They may contribute the labor personally; they may build or rehabilitate housing for others; and/or they may receive noncontract labor assistance from friends, family, or volunteers. If the Owner-Builder has a documented disability or other limiting circumstances and cannot provide any of the personal labor required, he or she may fulfill their sweat equity requirement entirely through noncontract labor assistance from friends, family, or volunteers. All construction activity in the Texas Bootstrap Loan Program must be under the supervision of a state certified NOHP.
The maximum Bootstrap loan may not exceed $45,000 per household. Owner-Builders may obtain additional loan funds from other Department and non-Department sources as long as the total amount of amortized repayable loan funds from all sources does not exceed $90,000.
Veterans Land Board – Veterans Land Loan Program
The VLB Veterans Land Loan Program is the only one of its kind in the nation, giving Texas Veterans the opportunity to borrow up to $150,000 to purchase land at competitive interest rates while typically requiring a minimum 5% down payment for tracts one acre or more.
The program is easy to use and offers Texas Veterans exclusive financing towards purchase of their own piece of Texas. The bonds used to fund the program are retired from loan repayments and the cost of administering the program is financed through a small fee charged on each loan.
Veterans Land Board also offers the VLB Veterans Housing Assistance Program (VHAP), to aid Texas Veterans in purchasing a home. Eligible Texas Veterans have an opportunity to purchase a home with a competitive, low-interest loan with little or no down-payment. Veterans, military members and their spouses may receive up to $424,100 on a fixed-rate loan for 15, 20, 25 or 30 year terms*. Veterans with a VA service-connected disability rating of 30% or greater qualify for a discounted interest rate.
Rent to Own
Another option for a delayed purchase, but to still be able to move into a home is a rent to own option. Read More Here.
Please Contact Me, Christina Legrand with RE/MAX Capital City, to set up an informational appointment or to get more info.