What are the loan options and assistance available to help an individual purchase a home in Texas?
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.
Who is eligible for the homeownership programs?
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.
Is there a requirement to repay the assistance provided for down-payment / closing cost?
In an effort to create responsible sustainable homeownership, there is no requirement to repay the assistance even if the home is sold, refinanced or paid off.
Can the low-interest rate mortgage loan and assistance provided through My First Texas Home be combined with the Texas Mortgage Credit Certificate?
Yes!! 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.
Are there restrictions to income or type of profession?
Homeownership programs are available statewide to any profession or individual/family who meet the program guidelines.
What type of home can I buy?
Any new or existing home in the state of Texas that does not exceed the maximum purchase price limits of the program. All homes purchased under this program must meet certain quality standards.
Are there credit and debt requirements?
Yes. It's a minimum credit score requirement of 620 for most programs, it’s a limited number of programs for credit score under 620.
The DTI shows how much of your gross monthly income is needed to cover all your debt obligations. There is no minimum credit score/DIT requirement to use theMCC program as a stand-alone option.
How do I apply for the funds?
The mortgage loan funds are available through a network of participating lender partners located throughout the state. You apply through a mortgage lender to apply for funds.
How do I know if I qualify for a mortgage loan 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.
How long does the mortgage process typically take?
In general, the mortgage process takes between 45 to 60 days from the time of application to closing. This time frame is dependent upon a number of factors including the individual lender's process and any potential qualifying issues.
What comprises a monthly mortgage payment?
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).
Is homebuyer education required?
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 homeownership programs, and the requirement can be satisfied through completion of a course provided by a HUD-approved, non-profit organization or government entity.
Can I rent my home obtained under this program?
No, you may not rent a home obtained under this program. The home must be your primary residence.