Home Buyer Assistance Programs
Again, you may purchase a home anywhere in Texas and receive TDHCA’s assistance. However, in the event that you are purchasing a home in a targeted area, you are allowed to have a higher income and purchase price limit. A targeted area is a designated census tract or an area of chronic economic distress.
Yes. Studies show that homebuyers who receive pre-purchase homebuyer education are 33% less likely to fall behind on their mortgage compared to homebuyers who do not take a homebuyer education course. A homebuyer education course is required for all TDHCA homeownership programs, and the requirement can be satisfied through completion of a course provided by a HUD-approved, non-profit organization or government entity, or a HUD-approved online course.
Your monthly mortgage payment includes a payment to the principal balance of your loan, the interest payment, and your escrow payment (monthly payments collected to pay your hazard insurance, mortgage insurance, flood insurance, if applicable, and property taxes.) This is commonly referred to as P.I.T.I. (principal, interest, taxes and insurance). Payments may vary depending on the loan product option. Lenders can talk through all options to determine payment differences and best option for homebuyer/borrower.
As with most mortgage loans, there are fees (closing costs) associated with this program. TDHCA does, however, limit the fees participating lenders may charge to help minimize your costs of closing the loan. TDHCA is committed to making their loan programs affordable, and offer low program fees in comparison to other loan program options
How do I know if I qualify for a mortgage loan through My First Texas Home and/or a certificate through the Texas MCC?
A participating lender will determine your ability to repay a 30-year mortgage loan by reviewing your employment and income information, total monthly debt obligations and your past experience with credit along with information about the value of the property you want to buy. These lenders will pre-qualify you so that you will know the approximate price range of homes to shop for. The lender will complete all necessary paperwork for loan approval and assist in the coordination of loan closing with your real estate professional and closing agent. It’s a good idea to get pre-qualified by one of the participating lenders prior to shopping for a home. If you do not qualify for a loan due to credit problems, visit Help for Texans to locate a certified consumer credit counseling provider in your area.
TDHCA does not actually loan you the money. The mortgage loan funds are available through a network of participating lender partners located throughout the state. If you experience difficulty with one of the participating lenders, please contact us at 1-800-792-1119.
Yes. The loan options available through My First Texas Home have a minimum credit score requirement of 640 for all Government loans (FHA, VA, USDA); minimum credit score requirement of 680 for the HFA Preferred conventional loan option (may be lower if LTV is below 95%).
TDHCA’s homeownership programs are available statewide to any profession or individual/family who meet the program guidelines. Income limits are set at up to 115% of the area median family income (AMFI) and vary based on the county the home is purchased in. View the income/purchase price limit table (PDF). If you do not see your county listed, please reference the “balance of state” row at the bottom of the chart
Can the low-interest rate mortgage loan and assistance provided through My First Texas Home be combined with the Texas Mortgage Credit Certificate?
Absolutely! TDHCA makes it easy to combine the benefits of both programs. The same guidelines apply to both programs; one-step process for the lender; and low-cost to the borrower. It’s a great opportunity to access the immediate benefit of the assistance to get into the home, and the long-term benefit of tax savings to sustain homeownership. The programs are also available individually.
In an effort to create responsible sustainable homeownership, TDHCA does require the assistance provided to be repaid if the home is sold, refinanced or paid off. By recycling funds, other future homebuyers can be assisted through the program. The assistance is provided to the borrower through a no interest, no monthly payment 2nd lien. The 2nd lien is not considered in loan qualifying for the mortgage loan.
TDHCA’s homeownership programs are designed for first time homebuyers or homebuyers who have not owned a home as their primary residence within the past three years. Potential homebuyers must also meet program income guidelines and program purchase price limits. Additional credit and underwriting guidelines may apply.
TDHCA Texas Homeownership Division offers two types of assistance:
30-year fixed low interest rate mortgage loans with up to 5% of loan amount to assist with down-payment and/or closing cost. Mortgage Credit Certificates that provide the home buyer with up to $2,000 every year as a special federal income tax credit based on the interest paid on the mortgage loan.
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