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Texas First-Time Homebuyer Programs of 2019  

Buying a first home can be stressful — there’s a lot to know and learn, and it’s challenging for many buyers to come up with the significant costs associated with a house purchase.

There is help available, however. If you’re a first-time homebuyer in Texas, you can take advantage of multiple programs designed to make homeownership more attainable. From providing down payment assistance to extending lenient borrower criteria, these programs aim to address the needs and challenges new homebuyers may face.

In this guide, we will cover:

Texas first-time homebuyer programs

Two agencies offer first-time homebuyer programs in Texas. The Texas Department of Housing and Community Affairs (TDHCA), a state agency, provides programs based on income. The Texas State Affordable Housing Corporation (TSAHC), a nonprofit agency, offers programs that target specific professions and income levels.

Both agencies work with participating lenders to service their programs.

In January 2019, we researched the most current information on first-time homebuyer programs in Texas, which included reviewing program websites and guidelines from the TDHCA and TSAHC. Here’s what first-time homebuyers in Texas need to know.

Eligibility for Texas assistance

To be considered a first-time homebuyer, residents should either be new buyers or buyers who have not owned a home in the past three years.

Borrowers will need to meet income limits depending on the program to which they apply. Buyers purchasing a home in one of the state’s “targeted areas” — designated areas that are economically distressed — will have higher income and purchase price limits.

Note: You can check current mortgage rates for Texas here.

My First Texas Home

Features

  • Down payment assistance
  • Closing cost assistance
  • Low mortgage rates
  • Tax credits (if combined with the Texas mortgage credit certificate)

Eligibility

  • Minimum credit score of 620
  • Income must be at or below established limit, depending on family size and county Maximum limits range as follows:
    • Non-targeted area: $68,800 – $107,410
    • Targeted area: $82,560 – $126,700
  • Purchase price must be within established limit, depending on family size and county Maximum limits range as follows:
    • Single-family unit in non-targeted area: $271,164 – $355,764
    • Single-family unit in targeted area: $331,423 – $434,823
    • Duplex in non-targeted area: $347,178 – $455,432
    • Duplex in targeted area: $424,329 – $556,639
  • Borrowers must complete an approved homebuyer education course
  • Eligible properties include:
    • Single-family units
    • Condos
    • Manufactured housing (FHA loans only)
    • Duplexes (one unit must be owner-occupied, and the duplex must have first been occupied by a resident at least five years prior to the closing date of loan)
  • Borrowers must occupy the home within 60 days of closing (no occupancy requirement beyond the 60 days)
  • Other requirements may apply, depending on lender and loan program

How it works

To apply or get further information, contact a participating TDHCA lender in your area.

My Choice Texas Home

Features

  • Down payment assistance
  • Closing cost assistance
  • Low mortgage rates
  • Cannot be combined with the Texas mortgage credit certificate

Eligibility

  • Minimum credit score of 620
  • Income must be at or below established limit, depending on family size and county Maximum limits range as follows:
    • Non-targeted area: $68,800 – $107,410
    • Targeted area: $82,560 – $126,700
  • Purchase price must be within established limit, depending on family size and county Maximum limits range as follows:
    • Single-family unit in non-targeted area: $271,164 – $355,764
    • Single-family unit in targeted area: $331,423 – $434,823
    • Duplex in non-targeted area: $347,178 – $455,432
    • Duplex in targeted area: $424,329 – $556,639
  • Borrowers must complete an approved homebuyer education course
  • Eligible properties include:
    • Single-family units
    • Condos
    • Manufactured housing (FHA loans only)
    • Duplexes (one unit must be owner-occupied, and the duplex must have  first been occupied by a resident at least five years prior to the closing date of loan)
  • Borrowers must occupy the home within 60 days of closing (no occupancy requirement beyond 60 days)
  • Other requirements may apply, depending on lender and loan program

How it works

To apply or get further information, contact a participating TDHCA lender in your area.

Homes for Texas Heroes

Features

  • Down payment assistance (DPA)
  • Closing cost assistance
  • Low mortgage rates
  • Tax credit (if combined with the Texas mortgage credit certificate)

Eligibility

  • Open to both first-time and non-first-time homebuyers
  • Minimum credit score of 620 (minimum score of 680 may be required for the DPA second loan option)
  • Income must be at or below established limit, depending on family size, county and program option

Maximum limits range as follows:

    • Non-targeted area: $68,800 – $107,410
    • Targeted area: $82,560 – $130,760
  • Purchase price must be within established limit, depending on family size and county Maximum limits range as follows:
    • Non-targeted area: $253,809 – $355,764
    • Targeted area: $310,211 – $434,823
  • No maximum debt-to-income ratio (DTI), depending on credit score (in some cases, the maximum DTI is 43%)
  • Borrowers must be in one of the following professions
    • Teachers
    • Police officers
    • Correctional officers
    • Firefighters and EMS personnel
    • Veterans
  • Other requirements may apply based on lender and loan program

How it works

Depending on the borrower’s eligibility, the DPA is either a grant or a no-payment and interest-free second mortgage, payable upon selling or refinancing the home. Interested applicants should take a brief eligibility quiz before contacting a participating TSAHC lender.

Home Sweet Texas

Features

  • Down payment assistance (DPA)
  • Closing cost assistance
  • Low mortgage rates
  • Tax credit (if combined with the Texas mortgage credit certificate)

Eligibility

  • Homebuyers who do not work within the required professions for the Homes for Texas Heroes program may qualify
  • Minimum credit score of 620 (minimum score of 680 may be required for the DPA second loan option)
  • Income must be at or below established limit, depending on family size, county and program option

Maximum limits range as follows:

    • Non-targeted area: $68,800 – $107,410
    • Targeted area: $82,560 – $130,760
  • Purchase price must be within established limit, depending on family size and county Maximum limits range as follows:
    • Non-targeted area: $253,809 – $355,764
    • Targeted area: $310,211 – $434,823
  • No maximum debt-to-income ratio (DTI), depending on credit score (in some cases, the maximum DTI is 43%)
  • Other requirements may apply based on lender and loan program

How it works

Interested applicants should take a brief eligibility quiz before contacting a participating TSAHC lender.

Texas mortgage credit certificate

Features

  • Tax credit
  • Can be combined with My First Texas Home, Texas Heroes and Home Sweet Texas, as well as TSAHC’s down payment assistance programs

Eligibility

  • No minimum credit score
  • Income must be at or below established limit, depending on family size and county Maximum limits range as follows:
    • Non-targeted area: $68,800 – $107,410
    • Targeted area: $82,560 – $126,700
  • Purchase price must be within established limit, depending on family size and county Maximum limits range as follows:
    • Single-family unit in non-targeted area: $271,164 – $355,764
    • Single-family unit in targeted area: $331,423 – $434,823
    • Duplex in non-targeted area: $347,178 – $455,432
    • Duplex in targeted area: $424,329 – $556,639
  • Borrowers must complete an approved homebuyer education course
  • Eligible properties include new and existing single-family homes, townhouses, condominiums and manufactured housing (with restrictions)
  • Must use the home as primary residence
  • Other requirements may apply based on lender and loan program

How it works

The fee to take advantage of the Texas mortgage credit certificate program is between $700-$725. However, applicants who combine the credit with a My First Texas Home loan or DPA within the Texas Heroes home loan program enjoy a fee reduction of $500.

Interested applicants should contact a participating TDHCA lender or a participating TSAHC lender to apply, depending on if you will be combining the credit with a loan product.

National first-time homebuyer programs

In addition to statewide programs, Texas borrowers can access federal loan programs that target first-time homebuyers. Offered by multiple agencies including the FHA, VA, USDA, Freddie Mac and Fannie Mae, these programs may have lower down payment requirements and more flexible borrower criteria than conventional financing. Review the national first-time homebuyer programs available so you can choose the best loan option for you.

 


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