It is important to know all the options when you are buying a home. Many people don’t know that down payment assistance programs are available to help with a down payment and/or closing costs—the biggest hurdle for most homebuyers!
Contrary to popular belief, you do not always need to be a first-time buyer to qualify, although you must be purchasing your primary residence. And the income limits are higher than you might expect!
The grant programs do not require you to pay the funds back over time, but the lien programs require you to pay them back—usually when you sell or refinance. A knowledgeable lender can help you figure out if you’re eligible and which option is right for you.
Here is a quick summary of some of the programs offered in Central Texas.
Homes for Texas Heroes
This grant program is open to buyers who work in certain jobs, including teachers, fire fighters, police, correctional officers, and veterans. There is no first time buyer requirement. The Homes for Texas Heroes program provides up to 5% of the total loan amount to cover down payment and closing costs in connection with FHA, VA, USDA, and FNMA HFA Preferred Conventional mortgages.
Home Sweet Texas Home
This grant program benefits low- to moderate-income families. You do not need to be a first time homebuyer, but you must meet certain income guidelines that are county specific – for example, someone in Travis County must have an income of not more than $93,610. The Home Sweet Texas Home program provides 2% – 5% of the total loan amount for down payment and closing costs in connection with FHA, VA, USDA, and FNMA HFA Preferred Conventional mortgages.
Hill Country Home Down Payment Assistance Program
This grant program is earmarked for homes in Travis County. You do not have to be a first time homebuyer and the current annual income limit is $108,920. This program provides 4% – 6% of the total loan amount to be used for down payment and closing costs in connection with FHA, VA, or USDA mortgages.
SETH- 5 Star Texas Advantage Program
A grant program to assist in the purchase of a home not located within Travis County. There is no first time homebuyer requirement. The annual income limits for a FHA or VA loan is $93,610, a 1-4 family using a USDA loan is $89,500 and Freddie Mac HFA Advantage program goes up to $113,960. The SETH program provides 3% – 6% of the total loan amount to be used for down payment and closing costs in connection with FHA, VA, USDA, or Freddie Mac HFA Advantage Conventional mortgages.
My First Texas Home
This first time buyer* program provides down payment and closing cost assistance in the form of a no-interest loan of up to 5% of the mortgage loan amount. For families in Bastrop, Caldwell, Hays, Travis, and Williamson Counties, the income limit for a family of 1 or 2 is $81,400 (although a higher income of $97,680 applies in some targeted areas). You must repay the amount of the assistance when you sell, refinance, or pay off your mortgage. The assistance can be used for down payment and/or closing costs in connection with FHA, VA, USDA, or FNMA HFA Preferred Conventional mortgages.
Bcl NeighborhoodLIFT Program
This 0% interest grant program benefits low- to moderate-income families. After living in your home for 3 years this grant is forgiven, meaning you do not have to pay it back. You do not need to be a first time homebuyer. This program applies to Bastrop, Hays and Travis counties. Assistance goes up to a maximum of $7500 that can be used for down payment and closing costs in connection with FHA, VA, USDA, and Conventional mortgages. Program has income limits that depends on loan type and family size. A 1-4 member non-military family has a $65,100 income limit and a 1-4 member military family has an income limit of $81,400. This program can be combined with other approved down payment assistance programs.
Mortgage Credit Certificate (MCC)
This is a first time buyer* program that allows homebuyers to claim an additional $2000 tax credit on their Tax Returns for every year the buyer lives in their home.
About Sarah: Sarah Morris is a Mortgage Banker with Sente Mortgage. She comes from a previous career in education which is why educating clients on the loan process and their best loan options is important to her. She has a passion for helping people, while assisting them through what can be one of the largest milestones of their life. Her interest was sparked after her own home buying experience which had provided little guidance through the loan process. As a mortgage banker, Sarah commits herself to always listening and working with her clients to help them find the best mortgage solution to fit their needs. She is an army wife and mother of two who enjoys playing tennis, painting and reading.