TDHCA Down Payment Assistance Programs No Longer Accepting Applications
September 25, 2009
Written By Jason Buch – Express-News
Texas this week halted a loan program that has successfully facilitated hundreds of home purchases by first-time buyers, leaving some people scrambling to pay their down payments and closing fees.
The Texas Department of Housing and Community Affairs no longer is accepting applications for two short-term lending programs to home buyers eligible for the up-to-$8,000 federal tax credit.
The decision does not affect the federal program, which has a Dec. 1 deadline.
In a letter sent to lenders Friday, Eric Pike, TDHCA Texas Homeownership Division director, wrote that the department was still processing many of the approximately 700 applications it had received.
“In order to ensure there is sufficient staff capacity, funding and time to process the remaining inventory of files, effective Wednesday, September 23, 2009, at 5:00 p.m., TDHCA will no longer be accepting loan application packages,” Pike wrote.
The department received more than 300 loan applications over the final two days of the program for a total of about 1,225 said Gordon Anderson, a TDHCA spokesman. It was the issue of being able to serve all the applicants rather than a funding problem that prompted the department to stop taking applications, he said.
“We still have the staff resources and the time and the funds to process the applications received up to that point,” Anderson said. “If you’re in the pipeline, that’s not an issue. But we’re no longer accepting any more applications.”
There are 545 applications for the short-term loans at various stages of approval, he said.
Rochelle Stevenson recently learned she was likely eligible for the loan and decided to use it to put a down payment on a three-bedroom house with a backyard large enough for her 3-year-old son. On Monday, Stevenson’s loan officer said she wouldn’t be able to get her application to TDHCA before the deadline.
“My first reaction was, ‘Will I be able to afford everything? Is this the time for me to buy a house?’” she said.
Now, Stevenson said, she’s trying to borrow money from family members to make the purchase.
“I just feel like they could have given some kind of more of a warning than one week, or a few days actually, before they just pulled their plug on it, because people do have their hopes up,” she said.
TDHCA in July began offering the loans to first-time home buyers who qualify for the federal tax credit. The state set aside $7.5 million for the loans.
Buyers can use the loans to defray closing costs or down payments, and the state is reimbursed when the buyers receive their tax credits.
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