Last Updated on August 7, 2022 by Danielle McDonald
Mortgage Assistance for Homebuyers in Texas
The City of El Paso First Time Homebuyers Program assists people who are planning to purchase a home in the city. It offers low-interest mortgages that can help them afford the costs of purchasing a home.
The program provides 0% to 3% deferred loans for first-time homebuyers who are purchasing a home in El Paso. Additionally, the City of El Paso underwrites the loan according to the commitment of the first mortgage lender. The city also only accepts applications from participating lenders, and they are processed on a first-come-first-served basis.
Applicants must have completed a “Guide to Homeownership Course” prepared by The El Paso Credit Union Affordable Housing and Project Bravo to qualify for The City of El Paso’s First Time Homebuyer Program. Moreover, their household’s gross annual income must not exceed 60% to 80% of the City of El Paso’s median income.
Properties bought using the provided funds from The City of El Paso’s First Time Homebuyer program need to be within the city limits. Its maximum sale price is $121,000. This figure is based 95% of the area’s median purchase price, and it is adjusted every year. Furthermore, the property types include single-family, one unit in a 2-4 unit property, condominium, or manufactured homes permanently attached to the ground.
60% -80% AMI
- 1-person household: $24,660 – $32,900
- 2-person household: $28,200 – $37,600
- 3-person household: $31,740 – $42,300
- 4-person household: $35,220 – $46,950
- 5-person household: $38,040 – $50,750
The City of Plano’s First Time Homebuyers Assistance and Educational Program (FTHB) is funded by HUD. It then helps potential homebuyers offset upfront mortgage costs with closing cost and down payment assistance.
The City of Plano’s First Time Homebuyers Assistance and Educational Program (FTBH) is available to eligible low- and medium-income people who are looking to buy a home in Plano. This program provides assistance with closing costs and down payments through deferred-payment loans.
Two options of assistance are available to applicants:
1. Community Development Block Grant (CDBG) funding does not exceed $10,000. Moreover, this is a zero-interest, zero-APR, deferred loan. It also comes with a second lien position with a 5-year period of affordability.
2. HOME Investment Partnerships Program (HOME) funding does not exceed $55,000. It also comes with a 30-year equity agreement, and a zero-interest, zero APR, deferred loan.
FTHB is only available to first-time homebuyers. Therefore, those who have owned a property in the past three years are not eligible. All applicants must be U.S citizens or permanent residents immigrants, with a household income of at least or less than 80% of the area median income (limits provided below). Their cash assets must not exceed the determined limit of $30,000.
Moreover, both the borrower and their spouse need to have at least a credit score of 620. They must also contribute a minimum of $1,000 for down payment or pay for closing costs. Gift funds can meet this requirement, but the borrower must contribute at least $500.
The primary borrower must also be employed for at most one year. However, applicants who have less than six months’ experience with their current employer may show that they worked in the 12 months prior to applying. In addition, all borrowers must attend an 8-hour First Time Homebuyer class, which is offered by the City of Plano. They also need to receive housing counseling from a HUD-approved agency.
A home bought with funds from FTHB must be a single-family home, townhome, or condominium within the city limits of Plano. It must also be insured, free of hazardous living conditions, and comply with federal EPA regulations including lead-based paint testing, and federal relocation regulations. Moreover, the property must meet the HUD value limits:
- 1-unit: $273,000
- 2-unit: $349,000
- 3-unit: $423,000
- 4-unit: $523,000
- 1-person household: $46,550
- 2-person household: $53,200
- 3-person household: $59,850
- 4-person household: $66,500
- 5-person household: $71,850
- 6-person household: $77,150
- 7-person household: $82,500
- 8-person household: $87,800
5 Star Texas Advantage Program
Southeast Texas Housing Finance Corporation offers Texas residents the 5 Star Texas Advantage Program. This program assists eligible applicants with closing costs assistance and down payment. So, qualifying applicants can receive up to 6 percent of the loan amount in grant money. From the many options, they can choose the loan option and amount of assistance that best suits their needs. Additionally, borrowers who finance with the Freddie Mac/conventional loan option and meet the Affordable Income Subsidy limits may be eligible for an additional 2 percent.
The 5 Star Texas Advantage Program is truly a gift because there is no repayment period or recapture period and there is no second lien on the property. The program also doesn’t have the typical first-time homebuyer requirement.
- Buyers must have income eligibility
- They must buy a home within the program’s boundaries (all of Texas, except for the cities of El Paso, Grand Prairie and Travis County).
- All mortgage buyers must take the SETH Homebuyer Education Course online.
This program provides financial assistance to qualified applicants who are interested in purchasing a home, but cannot afford the down payment or closing costs. These costs can be significant, and eventually some people might find themselves stuck in a renters’ trap if they are unable to pay them.
Austin Down Payment Assistance Program
Many potential homebuyers are left out of the market due to inability to save enough money for a down payment. The Austin Down Payment Assistance Program is also available to eligible applicants with low income.
Austin Down Payment Assistance Program can provide assistance funds up to $40,000 to eligible applicants to help with their down payment, closing costs, or prepaid expenses related to buying a house.
First-time homebuyers can apply for the program if they haven’t owned a home in three years or have been displaced. However, they must be buying single-family homes and condominiums within Austin’s Full Purpose City limits. The low-income limit is defined as a person with a median family income of less than 80%. The applicant must also be approved by a participating lender for a mortgage loan and have received a certificate from the Homebuyer Education Course. Additionally, The home must not exceed $295,000.
- 1-person household: $54,700
- 2-person household: $62,500
- 3-person household: $70,300
- 4-person household: $78,100
- 5-person household: $84,350
Harris County Community Services Department DPA Program
The Community Services Department offers assistance to eligible applicants in order to assist them with their down payment assistance program. The creation of this program is an effort to help more people buy their first home in Harris County.
DAP assistance is available for both new and pre-existing properties up to $23,800. This also includes the down payment and customary closing costs. It also covers owner’s title, a 3-year Home Warranty of up to $500 per year on pre-existing properties, as well as a 1-year Flood Insurance Policy of up to $500.
- A first-time homebuyer who has not owned a house for three years before applying for assistance
- Minimum 580 credit score is required for buyers.
- The buyer must have credit approval from one of the participating mortgage lenders.
- The Buyer’s front-end ratio (debt), cannot exceed 39%, and the Back-end ratio, or Debt-to Income ratio (DTI), cannot exceed 42%.
- Before applying for DAP assistance, the buyer must complete an 8-hour course in homeownership education. The course must be offered by a HUD-approved provider of homebuyer education, conducted by a Certified Counselor. Buyer is also required to submit a signed final household budget from the HUD approved provider.
- The buyer must contribute at least $1000 toward the purchase of the house.
- A buyer cannot have more liquid assets than $15,000, including stocks, cash and bonds.
Income Limits (80% AMI)
- 1-person household: $44,350
- 2-person household: $50,700
- 3-person household: $57,050
- 4-person household: $63,350
- 5-person household: $68,450
- 6-person household: $73,500
- 7-person household: $78,600
- 8-person household: $83,650
Homeownership Across Texas
The Southeast Texas Housing Finance Corporation, (SETH), recognizes that while many potential homebuyers are able to afford monthly mortgage payments for a new house they do not have enough money saved up to pay the down payment. SETH created the Homeownership in Texas (HAT Program) to help eligible homebuyers pay their down payment and close cost expenses.
This program provides financial assistance to qualified applicants who are interested to purchase a home, but cannot afford the upfront costs. It also includes the down payment and closing costs. These costs can be significant and people might find themselves stuck in a renter’s trap if they are unable to pay them.
The program grants 5 percent to homebuyers who finance with FHA, VA or USDA loans. Additionally, Borrowers who finance with conventional loans receive 3 percent. Then, there is no repayment or recapture period and there is no requirement for first-time homebuyers.
- Borrowers must be within the established income limits, which can vary from one county to another.
- All borrowers must also be eligible for a mortgage loan from a participating lender. They accept FHA, VA and USDA mortgages, provided they have a fixed rate. Adjustable rate mortgages cannot be eligible under the HAT Program.
- The property must be in Texas, outside of the boundaries of El Paso, Grand Prairie and McKinney and Travis County.
- Although there is no requirement for first-time homebuyers, the property must be the applicant’s primary residence. The program des not allow second or investment properties.
All mortgage borrowers must take the online SETH Homebuyer Education Course.
Homes for Texas Heroes Program
The Texas State Affordable Housing Corporation created the Homes for Texas Heroes Program to assist some of Texas’ hard working citizens in achieving their homeownership dreams. Teachers, correctional officers, firefighters, EMS personnel and veterans can receive down payment assistance, a 30-year fixed-rate mortgage with multiple rates and loan options, as well as a 30-year fixed-rate mortgage.
The program provides funds to applicants for a down payment or closing costs. It ranges from 3 to 5 percent of total loan amount. The money is a gift and there are no repayment terms. You don’t even have to live in your home for a minimum period.
Through a network of lenders, the Homes for Texas Heroes Program is open to all homebuyers in Texas. Although there is no requirement for first-time homebuyers, applicants who are buying their first home may apply for a Mortgage Credit Certificate. Texas Heroes who combine the MCC assistance and the down payment will get their MCC free of charge, and therefore, will save $500.
- Allied Health Faculty Member
- Corrections Officer
- County Jailers
- Emergency Medical Services Personnel
- Fire Fighters
- Juvenile Corrections Officers
- Military Veteran
- Nursing Faculty Member
- Peace Officer
- Professional Educator
- Public Security Officer
This program provides financial assistance to those who qualify and have interests in purchasing a home, but cannot afford the upfront costs. It also includes the down payment and closing costs. These costs can be significant and people might find themselves stuck in a renters’ trap if they are unable to pay them.
My First Texas Home
The Texas Department of Housing and Community Affairs’ My First Texas Home’s Taxable Mortgage Program (TMP), offers a 30-year fixed-interest, competitive mortgage loan with no interest. It also provides closing cost assistance up to 5% of the mortgage loan.
Qualifying homebuyers have access to a variety of features offered by the Department’s mortgage credit certification program. This also includes the ability to combine it with TMP funds. Eventually, this will increase the home’s affordability. Then, the annual tax credit is 40% of the annual mortgage loan interest, up to $2,000 annually. They can carry forward MCC credits that aren’t available in the current year to use in the next three years.
To be eligible for the My First Home Program, you must meet these eligibility requirements:
- The applicant must be either a first-time buyer or someone who hasn’t owned a primary residence for three years.
- The income of the applicant should not exceed guidelines for income limits.
- The maximum purchase price for the property must not exceed the program’s limits.
- For USDA, VA, or FHA loans, the minimum credit score is 640. Maximum debt-to-income ratios are 45%.
- Fannie Mae HFA preferred loans require a minimum credit score of 640 to be eligible for loan-to values between 95.01%-97%. 680 is required for loan-to values between 95.01%-97%. Maximum debt-to-income ratios are at 45%
These properties are eligible to receive loans through the My First Texas Home Program.
- One family unit.
- Condominium developments with single units and planned unit developments.
- Duplexes (exceptions may apply).
My First Texas Home funds are set aside to help families whose incomes are less than 80 percent of the AMI (statewide area median income) or in areas of economic distress.
Travis County – Hill Country Home Down Payment Assistance
The Travis County Housing Finance Corporation offers Hill Country Home Down payment Assistance (DPA), that assists homebuyers in obtaining government-backed FHA or VA loan financing. This program is for homebuyers who want to buy a home in Travis County. It also includes the City of Austin.
Hill Country Home Down payment Assistance (DPA Program) allows qualified applicants to receive a 30-year fixed-rate loan with a competitive interest rate. Those who can receive the loan amount can use it for closing costs assistance or down payment assistance. This assistance comes in the form of a 10-year, 0% interest second mortgage loan that is forgivable.
All borrowers must meet these criteria to be eligible for this program:
- Buyers need to have a minimum FICO credit score (640) and a maximum of 45 debt-to income (DTI).
- For qualification, there are standard loan guidelines (e.g., sufficient income, acceptable credit and down payment requirement).
- First-time home buyers need to complete a HUD approved education course.
- Maximum credit qualifying income cannot exceed 140% of the area median income (currently $138,460).
You can use the program funds only to buy a home, not to refinance. The funds must also be located in Travis County, which includes the City of Austin. However, buyers must live in the home as their primary residence (No minimum residence). The lender will determine the maximum purchase price based on creditworthiness, income, debt to income ratio, and other factors. Program purchase price limit is $364,452.
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