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First Time Home Buyers Benefits
If you looking for a home and wanting to know more about First time home benefits, it’s a good idea to consider both federal and state programs when you conduct your mortgage search.
Let us look at first time homebuyers programs with the topic of Texas First Time Home Buyers Benefits 2020
Both, Texas state government and the federal government offer special first-time homebuyers programs.
Even with low down payment and credit score requirements, these programs may allow you to get a loan.
Veterans or school teachers can take benefit of these programs as it is designed specifically for them.
The Federal Housing Administration handles the FHA loans, which many typical lenders include as part of their mortgage portfolio and they offer the lowest down payment options available.
In fact, just a 3.5% down payment is expected when you get one of these loans, while a conventional mortgage calls for a 20% down payment.
The 3.5% down payment only applies to applicants who have a FICO credit score of 580 or higher.
The FHA will require you to pay a 10% down payment if you do not meet the requirements, this too beats what most mortgages in Texas can offer.
Texas First-Time Home Buyer Programs
The Texas Department of Housing and Community Affairs (TDHCA) is not restricted to just the My First Texas Home program but handles all of the state’s first-time homebuyer offers.
With a 30-year fixed-rate loan with comparatively easy-to-meet credit stipulations, and decent interest rates.
It’s also paired with down payment and closing cost assistance that could be worth as much as 5% of your new home’s value.
Though this is definitely preferential for first-time homebuyers, even those who haven’t been a homeowner within the last three years are also eligible.
Benefits:
- A borrower can get up to a 5% loan to help cover your down payment or closing costs.
- Relatively simple credit requirements.
Challenge:
– It has limited applicant standards.
Eligibility:
- Only for first time home buyers or people who haven’t owned a home in the last three years
- Requiring the credit score to be at least 620
Best for:
- This program is ideal for mid to low-income borrowers.
Texas Bootstrap Loan Program
The Texas Bootstrap Loan Program is one of the more distinctive first-time homebuyer programs around the country.
This offer quite literally has you build your own home instead of just helping you purchase a home.
You’re required to be under the supervision of a Nonprofit Owner-Builder Housing Provider, or NOHP, who is certified by Texas, to make sure you know what you’re doing and that you are following all laws.
So if you enter this program, you’re required to do at least 65% of the labor associated with the building, and this gap can be filled in by NOHP, family members, friends, and volunteers.
Your total debt-to-income ratio can’t exceed 45%, and you have to have lived in Texas for at least six months before applying.
The maximum benefit of the program is $45,000, although you are not barred from seeking finances from other places as well.
Benefit:
- A loan to build your own home is available.
Challenges:
- Very labor-intensive and time-consuming.
- Must be under the supervision of a NOHP
Eligibility:
- Cannot have an annual household income higher than 60% of the state/local median family income
- Need a reasonable credit history.
Best for:
- Families who have low income and very little home buying options.
Texas Mortgage Credit Certificate Program
This program can be benefited only if it is being offered in combination with the My First Texas Home program.
Similar to programs that many states offer, the Texas Mortgage Credit Certificate Program allows borrowers to save on their federal income taxes by applying as much as 40% of their mortgage interest payments as a tax credit, and this is limited to a maximum of $2,000 per year.
You only need to have not been a homeowner during the last three years to take advantage of this program.
First-time homebuyers and veterans who meet specific requirements don’t have to abide by this, though.
Benefits:
- Can get a 40% annual mortgage interest payment federal tax credit.
Challenge:
- Tax credits are capped at $2,000
Eligibility:
- Someone who is either a first time home buyer, an eligible veteran, or someone who has not owned a home over the last three years
Best for:
- People who are looking to save a little extra on their federal taxes.
The Texas State Affordable Housing Corporation (TSAHC) provides eligible first- time homebuyers with mortgage loans, down payment assistance grants, and mortgage credit certificates through the following programs:
Homes for Texas Heroes Home Loan Program
Teachers, firefighters and EMS personnel, police and correctional officers, and veterans can avail this first-time homebuyers program.
Home Sweet Texas Home Loan Program
Texas home buyers with low and moderate incomes can take benefit from this first time homebuyers program.
First-time homebuyers program benefits are:
- There are different rates and loan options available in a 30-year fixed interest.
- A grant which never needs to be repaid or forgivable second lien loan is provided as down payment assistance (DPA)
- For up to 5% of the loan amount, DPA is available.
- You can take this benefit even if you are not a first time homebuyer.
- Available statewide through a network of participating lenders. An approved realtor is not required by a borrower, however, TSAHC provides several resources to help find a realtor familiar with their programs.
- Income limits vary by county. In some targeted areas availability of expanded income and purchase price limits.
Conclusion
The TDHCA has a network of lenders who provide access to first time homebuyers program, TDHCA does not directly approve applications or lend money.
The additional requirement about income limits, credit scores, and eligible properties depends on the lender to lender.
You can reach out directly to a lender for more information if interest in these homebuyer assistance programs.
As a first-time homebuyer, we suggest you speak with a financial professional and advisors in your area so you do not feel pushed over into a financial situation.
