Down-payment assistance …when we hear those words, most of us think of the individuals in the poverty-level who may be scraping by at $35,000 per year. This is just not the case. There are a multitude of rarely spoken of programs which even a person or household making under $98k per year could benefit from. As you have guessed it, if you make over this amount, there is not a down-payment assistance program available for you 😉 Let’s face it–in a market like ours in North Texas, where buyers are competing with other buyers who are willing to pay over appraised value (out of pocket!) just to get into a home and buyers digging into the funds that would otherwise be for closing costs or down-payment…well, down-payment assistance may come in handy.
There are definitely varying views on the topic of down-payment assistance and what it means for our economy. Some feel that if a person can not afford all of the fees associated with buying a home, then they should not venture out into the process in the first place. I have a different view. The down payment assistance programs are there for buyers who need them (and if it also gives you an edge in the drastic environment in North Texas that we are currently enduring, then what do you have to lose?). Not everyone has the ability to put $20,000 down + pay closing costs on a home, while most “do” want to own a home. Embarrassment or lack of knowledge could prevent a buyer from inquiring about government funds for buying a home. Let’s explore a few options to see if any of them are right for “you”:
All of the programs vary to some degree, but you do have to know what to search for. Some require you to be within a specific area, some with a specific lender, and most will require you to take some sort of housing class to qualify for the assistance and / or credit.
USDA Home Loan – Most are familiar with this home loan for rural areas. This program allows you to buy a home with no down-payment if you qualify. You must make under a certain amount (each county is different). To see if you qualify: http://eligibility.sc.egov.usda.gov/eligibility/incomeEligibilityAction.do From here you will also want to make sure that you are searching for homes in an area that allows for a USDA Home Loan: http://eligibility.sc.egov.usda.gov/eligibility/welcomeAction.do. At this time, rural areas such as Celina, Pilot Point, Anna, Melissa, Van Alstyne, etc…all qualify. While there is no stipulation of which lender to work with, you will want someone familiar with how to navigate this type of home loan.
The SETH Program – Otherwise known as the 5-Star Texas Advantage Program. This home-ownership program allows for a “gift” that can be used for down-payment assistance OR closing costs. There is no first-time home-buyers requirement, but there IS a specific lender requirement and an income-limit. http://sethfc.com/option-1/ Under this same Umbrella is the HAT Program. The Hat program requires a credit score of at least 660 and the borrower must contribute 50% of their own funds. An on-line home-buyer class is required.
TSAHC- Texas State Affordable Housing Corporation – This program provides first-time home-buyer grants as well as down-payment assistance. This program can be used to buy a home or refinance an existing home. See if you qualify: http://www.tsahc.org/homebuyers-renters/first-time-home-buyer-grants
Homes for Texas Heroes – This program provides home-buying benefits for teachers, police officers, correction officers, fire-fighters and EMT personnel, and Veterans. Homes for Heros provides a 3-5% down-payment grant to qualifying individuals. There is no stipulation of how long you have to live in the home. You need to have at least a 640 Fico score and there are debt-to-income requirements. http://www.tsahc.org/homebuyers-renters/loans-down-payment-assistance
My First Texas Home – This program is specifically for first-time home-buyers in Texas and provides up to 8,000 in down-payment assistance. There is a specific lender requirement as well as income limitations. http://www.tdhca.state.tx.us/homeownership/fthb/down-payment-assistance.htm
Bond Program 77 – This program is for first-time home buyers or those who have not owned a home in 3 years. Household income must be under $110k and the sales price of the home can not exceed $370,379. The property can be located anywhere in the state of Texas but you must occupy the home for a set period of time. The grant is set up as a deferred 2nd lien and will become payable should you move. The maximum “loan” is currently 5% of the purchase price and can be used for down-payment or closing costs. http://www.txhomeprograms.org/program/programdetail.php?id=164
Haven’t found exactly what you are looking for or still haven’t found a program that you qualify for? Are you aware that certain cities offer down-payment programs just to live within that city? Find a qualifying program for your city here: http://www.txhomeprograms.org/program/all_programs.php
Amy S. Arey, Realtor | Halo Group Realty, LLC | 214.901.1341-Cell