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- What Are Netting Escrows & How Does It Work?: The Best Guide - January 2, 2024
- The Secret About Prescriptive Easement: Top Guide 1 Must Know - December 4, 2023
- About Home Equity Loans In Texas And How Can One Obtain It - November 27, 2023
About My First Texas Home Program
According to Texas A&M University’s Real Estate Research Center, a huge wave of demand has fueled the housing market in Texas, at the start of 2021, the homes were selling in a record 43 days’ time.
The Texas Department of Housing and Community Affairs and other organizations offer numerous ways to help people afford a home especially if they are first-time homebuyers in the state.
For any first-time Texas homebuyer, the first place to visit is TDHCA, which was established in 1991 when the State Legislature administered close to $2 billion in annual services, utilizing mortgage revenue bond financing, federal grants, and federal tax credits.
Let us look at various Texas first-time homebuyer loan programs
1. TDHCA My First Texas Home program
The Texas Department of Housing and Community Affairs (TDHCA) offers the My First Texas Home program for first-time homebuyers, which is a 30-year mortgage with a low interest rate and interest-free down payment assistance of up to 5 percent.
Through this loan program, the borrowers can obtain an FHA, VA, or USDA loan.
When the borrowers sell their home or refinance or pay off their mortgage then the assistance must be repaid. These funds are then reutilized to assist other homebuyers.
A borrower could become eligible for the program even with a low credit score of 620, but they need to also meet the program’s income and purchase price requirements, which could vary depending on the county.
The borrower is supposed to also take a homebuyer education course which is available free of charge through Texas Homebuyer U.
The veterans, Texas first-time buyers, or those who haven’t owned a home in the past three years can take advantage of the My First Texas Home program.
2. TDHCA My Choice Texas Home
TDHCA’s My Choice Texas Home program offers an identical low-rate mortgage and up to 5 percent assistance to help cover the closing costs and down payment for first-time or repeat homebuyers.
This program assistance is a zero-interest and zero monthly payment second mortgage.
Along with the FHA, VA, or USDA loan, a Fannie Mae HFA Preferred conventional loan can also be availed by the borrower through this program.
To qualify, the borrower’s credit score can be as low as 620, but as with the My First Texas Home program, the borrower must meet income and purchase price limits.
3. TSAHC Home Sweet Texas Home Loan Program
The Texas State Affordable Housing Corporation (TSAHC) is providing a 30-year fixed-rate mortgage and up to 5 percent down payment assistance through the Home Sweet Texas Home Loan Program, these assistance are either as a grant or second mortgage.
The second mortgage is no interest and no monthly payments, and after three years they will be forgiven.
But if the borrower sells the home or refinances their mortgage before that, then they will need to repay it back.
This program can be used to get any loan like the Fannie Mae HFA Preferred or Freddie Mac HFA Advantage conventional loan, the FHA loan, VA loan, or USDA loan.
To qualify for this program the borrower doesn’t have to be a first-time homebuyer, but they must have a credit score of at least 620 and qualify for income and purchase price limits based on the county, the size of the household, and if the borrower is buying in a targeted or non-targeted area.
4. TSAHC Homes for Texas Heroes Program
Another program to look for is the Homes for Texas Heroes Program. If the borrower is working in a public service profession like teachers, health faculty members, police officers, or firefighters, if they are eligible military veterans, emergency medical service personnel they could qualify for TSAHC’s Homes for Texas Heroes Program.
A 30-year mortgage along with down payment assistance of up to 5 percent is offered by this program. the assistance can be either a grant or second mortgage like the Home Sweet Texas Home Loan Program.
Even though the borrower doesn’t have to be a first-time homebuyer, but their income and the home’s price can’t exceed income and purchase price limits.
5. Texas down payment assistance
While Texas Department of Housing and Community Affairs TDHCA’s and Texas State Affordable Housing Corporation TSAHC’s programs can provide down payment assistance, certain cities in Texas might also have their own assistance programs, which can be an option when the borrowers are buying a home in the area.
For example, the Dallas Homebuyer Assistance Program is offered by the city of Dallas, this is a zero-percent deferred loan that can help borrowers with their down payment and closing costs.
The other Texas homebuyer assistance programs are:
Mortgage credit certificate (MCC)
A mortgage credit certificate (MCC) is a federal tax credit for a percentage of the borrower’s annual mortgage interest.
Depending on the borrowed amount for a mortgage this credit is equal to either 20 percent or 30 percent of the interest, which is up to $2,000 per annum.
Borrowers can combine the MCC with a My First Texas Home loan, but they are not required to have that type of loan in order to be eligible.
Only first-time homebuyers and veterans who meet income and purchase price limits can qualify for the program.
Other first-time homebuyer loan programs
The borrowers along with Texas state home buying programs can also look at any of the nationally available first-time homebuyer loan programs, such as:
FHA loans: These loans are widely available if a borrower has a lower credit score or limited savings, they can opt for an FHA loan. A minimum credit score of 580 is required and with a down payment of just 3.5 percent they can qualify for the FHA loan.
VA loans: If the borrower is a member of the military or veteran, they can qualify for a VA loan, and this loan doesn’t even require any down payment.
USDA loan: Neither do the USDA loans have any down payment requirement, the loan however is only available to borrowers buying homes in a USDA-eligible rural area. To qualify the borrower needs a credit score of 640 or higher.
Conclusion
To create and carry out programs TDHCA helps people find the right home by working with various communities, nonprofits, the federal government, and others.
It has programs for buyers, and renters, the program also encourages developers to build affordable homes.
Borrowers can visit HUD.gov. for information regarding other Texas homeownership programs, including by city and county.
