First Time Home Buyer Government Programs Texas

Southeast Texas Housing Finance Corporations Programs

Southeast Texas Housing Finance offers three programs covering large regions of the state: The HomeStar program, the 5 Star Texas Advantage Program, and the Homeownership Across Texas program. The first program is truly statewide, while the other two are available in all but a handful of locations, which are the city limits of El Paso, Grand Prairie, McKinney, and Travis County.

Types Of Down Payment Assistance Programs In Texas

The Texas Department of Housing and Community Affairs and the Texas State Affordable Housing Corporation are two organizations that offer educational resources and financial assistance services to hopeful Texas homebuyers.

Each program offered by these agencies has its own benefits, requirements, and specifications. The programs are designed to lessen the burden of down payments and closing costs, making it easier for applicants to earn a seat at the closing table without emptying their life savings.

Some programs can even be combined with federal assistance opportunities to further reduce the financial burden first-time homebuyers may face.

Native American Direct Loan Program

The Native American Direct Loan program was created to help eligible Native American veterans pay for the construction of a new or improved home on federal trust land.

This loan is like a Purchase Loan offered to eligible service members and veterans through the Department of Veterans Affairs . However, not all lenders can make loans for properties on federal trust land. Ask before selecting a lender.

For more information, visit benefits.va.gov.

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My First Texas Home Program

My First Texas Home Program is an excellent option for first-time home buyers, although youre also eligible if you havent been a homeowner within the last three years. Perfect for low-income borrowers, it provides a 30-year fixed-rate loan with good interest rates and forgiving credit stipulations.

Other characteristics:

• You can get a loan, worth up to 5% of the homes value, to help with your down payment and closing costs.
• A minimum credit score of 620 is required.
• Its available to qualified home buyers from all professions through a network of participating lenders.
• Theres a bonus option of dollar-for-dollar reduction on federal tax liability through the TDHCAs Texas Mortgage Credit Certificate Program.

Which Loan Is Best For First

The majority of first-time home buyers use 30-year fixed-rate mortgages backed by Fannie Mae or Freddie Mac to purchase their first home but that doesnt make it the best loan for first-time buyers. Mortgages are not one-size-fits-all. Get pre-approved and let your lender advise you on which mortgage loan is best for you.

Read more of our other first-time home buyer tips.

Get pre-approved for a mortgage today.

Dan Green

Dan Green is a former mortgage loan officer and an industry expert. He’s appeared on NPR and CNBC, and in The Wall Street Journal, Bloomberg, and dozens of local newspapers. Dan has helped millions of first-time home buyers get educated on mortgages, real estate, and personal finance. Have mortgage questions? Ask Dan in the chat.

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How To Get Started

To find out if youre eligible for the Texas programs, take the Texas Homebuyer Programs readiness quiz. If it gives you the green light, your next move is to meet with a lender who participates in the program.

I typically meet with clients right away to assess the application and confirm the info from the readiness calculator, says Michael Peña, sales manager and loan officer at Academy Mortgage, a participating lender in the program.

If everything jibes after the initial meeting, Peña asks for a potential borrowers pay stubs from the past 30 days, two years of tax returns, bank statements from the previous two months, and a copy of identification to confirm the information on the application.

Low Down Payment Conventional Mortgages

These four programs from Fannie Mae and/or Freddie Mac are available for first-time home buyers and offer low down payments and low credit score requirements.

HomeReady: Backed by Fannie Mae, this 3 percent down payment mortgage has a 620 minimum FICO score requirement. Buyers using a HomeReady loan to purchase a HomePath property also receive a $500 closing cost credit. The HomePath Ready Buyer program enables buyers to qualify for a 3% cash contribution toward the mortgage or closing costs.

Home Possible: This 3 percent down payment mortgage has a 660 minimum FICO score. Freddie Mac backs Home Possible.

Conventional 97: Backed by Fannie Mae and Freddie Mac, the Conventional 97 mortgage requires 3 percent down and a 620 minimum FICO score.

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Homeownership Across Texas Program

The HAT program provides grants to help qualified homebuyers reduce the amount of money they must pay out of pocket to purchase a home. Grants for the HAT program range from 1%-5% of the amount of the loan and can be applied to the down payment or closing cost fees. HAT grants are not loans, so they never have to be repaid. Also, there are no other closing costs tied into the HAT grant program.

• Eligibility To be eligible for this program, the new or existing single-family home that you are planning to buy must be occupied by you and it must be your primary residence. Of course, these houses must be in Texas to be eligible. However, houses in Travis County and the cities of El Paso, Grand Prairie and McKinney are not eligible for this program.
• Income limit Your income must fall at or below certain limits depending on the county that you live in in Texas. Those limits vary greatly, often depending on whether you live in an urban or rural area.
• Purchase price limit The purchase price for a home under this plan must not exceed $548,250 for a Conventional, VA or USDA HAT loan.
• To be eligible for this assistance program, the lender requires that all borrowers listed on the note must have minimum credit scores of 620.
• Homebuyer education You must complete this educational course online or in person and be able to present documentation before the loan closing is finalized.

Good Neighbor Next Door Program

The Good Neighbor Next Door Program was specifically put in place to attract pre-K through 12th-grade teachers and emergency personnel to areas around the U.S where there is a need for such professionals. The federal government has identified these various places and deemed them revitalization areas. So if youre a police officer, firefighter, emergency medical technician or school teacher, you can use this program to get a house in one of these areas for 50% off.

While this program is obviously beneficial, you dont physically obtain your mortgage through it. Instead your discount will apply through the program, and you can pay cash or get a conventional, FHA or VA mortgage to cover the balance. You will, however, be required by law to leave this home as your primary residence for no less than three years, at which point you can sell it and keep the profits.

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Buying A Home In Texass Big Cities

In many cases, the cost of a home in a major city is significantly higher than the cost of buying a home in a rural area or small town. Even in metropolitan real estate markets, its possible that competition will be even more intense. The following information will help you understand what to expect if you want to purchase a home in one of Texas largest cities. This section gives you a high-level summary.

Houston First-time Homebuyers

Home prices in Houston were $320,000 on average in April 2021, according to the most recent available data. According to Realtor.com, this represents a 14.3 percent increase year-over-year. Those with a household income at or below 80 percent of the areas median income can apply for one of the DPA programs, which provides up to $30,000.

An interest-free, forgiven loan backed by a lien is provided as part of the aid. If the buyer stays in the home for five years, the loan is considered paid off. A portion of the original loan amount will be repaid to the City if the buyer sells or moves out of the home before the end-of-five-years period has expired.

San Antonio First-time Home Buyers

Home prices in San Antonio were $250,000 on average in April 2021, according to the most recently available information. According to Realtor.com, this was an increase from 7.8 percent year-over-year.

Dallas First-time Homebuyers

Federal Programs For First

Several federal government programs are designed for people who have low credit scores or limited cash for a down payment. Although most of these programs are available to repeat homeowners, like state programs, they can be especially helpful to people who are buying a first home or who havent owned a home in several years.

The mortgages are generally for single-family homes, two- to four-unit properties that will be owner occupied, approved condos, townhomes, planned unit developments, and some manufactured homes.

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What Is The Average Age Of First

First-time buyers between the ages of 25 and 34 account for 46% of homebuyers. Thats in line with the national statistic of 51% of first-time buyers in that age range.

Photo credit: iStock/ivanastarSoFi Loan Products SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 , and by SoFi Lending Corp. NMLS #1121636 , a lender licensed by the Department of Financial Protection and Innovation under the California Financing Law and by other states. For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.SoFi Mortgages Terms, conditions, and state restrictions apply. Not all products are available in all states. See SoFi.com/eligibility for more information.Third-Party Brand Mentions: No brands or products mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.External Websites: The information and analysis provided through hyperlinks to third-party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances. SOHL0422008

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Homebuyer Residence Incentive Program

Sponsored by the city of San Marcos, this program offers $5,000 in down payment and closing cost assistance to city employees, San Marcos Consolidated Independent School District employees and Texas State University professors. The help is in the form of a zero-interest loan, which is forgiven after five years as long as the borrower continues to own and occupy the home. The property must be within the San Marcos city limits, but there are no income restrictions.

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How To Apply To Texas Programs For First

You can find information about qualifications, applications, and requirements for loan programs at the websites for both the Texas Department of Housing and Community Affairs and the Texas State Affordable Housing Corporation.

Neither organization lends directly, but you can find a list of their approved participating lenders on their websites. They also provide a list of recommended real estate professionals. Its especially important for first-time buyers, who may be unfamiliar with the mortgage lending process, to compare interest rates, fees, and other costs among lenders to find the most affordable loan.

Texas Mortgage Credit Certificate Program

This program is only being offered in combination with the My First Texas Home program. Similar to programs 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. However, this is limited to a maximum of $2,000 per year.

To get in on this beneficial program, you only need to have not been a homeowner during the last three years. First-time home buyers and veterans who meet specific requirements dont have to abide by this, though.

Other initiatives available to first-time home buyers are the Home Sweet Texas Home program and the Homes for Texas Heroes program.

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Eligibility For Tdhca Homebuyer Assistance

Specific income and house price limits vary across the state, but heres what a typical Texas borrower needs to qualify for assistance.

• Borrowers must have a minimum credit score of 620.
• Borrowers must meet income and loan requirements.
• The property for sale must be located in Texas and not exceed purchase price limits.
• Eligible properties include new or existing single-family homes, condos, manufactured homes, and duplexes .
• Buyers must be approved for a mortgage with a lender participating in The Texas Homebuyer Program.

Closing Cost Assistance Programs For Home Buyers

Closing cost assistance programs are home buyer stimulus plans that pay up to 100% of a buyers purchase closing costs, including title expenses, transfer taxes, and mortgage fees.

Typically, home buyers apply for closing cost assistance through their local housing agency, separate from their lender. You can look up your states housing agency on the National Council of State Housing Agencies website. The buyer and the home must meet the agencys minimum quality standards.

Closing cost assistance programs target lower-income home buyers with average credit scores, at least.

The first step towards getting closing cost assistance is getting pre-approved.

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Texas State Affordable Housing Corporation Programs

The TSAHC was created in 1994 and it is set up to help lowto-moderate income Texas families find options for home ownership in underserved sections where affordable housing is not available.

This plan offers fixed-rate mortgage loans, down payment assistance and mortgage interest tax credits for prospective homebuyers. The TSAHC also offers assistance of 5% of the loan so new homebuyers can cover the cost of the down payment and any closing costs. Also, if you are a first-time homebuyer, you can receive a tax credit known as a Mortgage Credit Certificate that can save you up to $2,000 every year on your income taxes. TSAHC works with reputable lenders from all over Texas to give prospective buyers plenty of options.

Freddie Mac Home Possible Mortgages

Very low- and low-income borrowers may make a 3% down payment on a Home Possible® mortgage. These loans allow various sources for down payments, including co-borrowers, family gifts, employer assistance, secondary financing, and sweat equity.

The Home Possible mortgage is for buyers who have a credit score of at least 660.

Once you pay 20% of your loan, the Home Possible mortgage insurance will be canceled, which will lower your mortgage payments.

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City Employee Loan Assistance

The citys program offers up to $25,000 as a no-interest, forgivable loan to help city employees buy a home in Waco. The loan is forgiven incrementally over 10 years, as long as the borrower continues to own the home and work for the city. Employees must have worked for the city of Waco for at least 12 months to be eligible.

Home Sweet Texas Home Loan Program

Though the income limits for the Home Sweet Texas Home Loan Programaimed at first-time borrowersvary by county, it typically amounts to a gross household income of $97,000 or less.

If approved for the program, youll get a 30-year fixed-rate mortgage. In addition, you can choose down payment assistance as a grant, which you do not have to repay. Or you can choose a deferred forgivable second mortgage, which you have to repay only if you sell or refinance within three years. Down payment assistance is available for up to 5% of the total loan amount.

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Two Home Buyer Programs: Which Is Right For You

TSAHCs mortgage loans with down payment assistance are offered through the following programs. You dont have to be a first-time home buyer to use either program!

Homes for Texas Heroes Program

If youre in a hero profession, this is the home loan program for you. Hero professions include:

• Professional educators, which includes the following full-time positions in a public school district: school teachers, teacher aides, school librarians, school counselors, and school nurses
• Police officers and public security officers
• Firefighters and EMS personnel
• Correction officers and juvenile corrections officers
• Nursing faculty and allied health faculty

Home Sweet Texas Home Loan Program

If you dont qualify under one of the professions listed above, this is the best program for you.

Frisco Down Payment Assistance Program

The City of Frisco now maintains a Down Payment Assistance Program to assist low and moderate-income families that work for the City of Frisco or the Frisco Independent School District in purchasing a property in Frisco.

Families with at least one adult working full-time for the City of Frisco for at least six months may be eligible for assistance in purchasing a Frisco property. The program offers qualified homebuyers forgiving loans of up to $10,000 for the downpayment and closing cost assistance. You can visit their website to learn more about how to get a grant for a house.

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