TDHCA Releases Two Down Payment Assistance Programs

June 25, 2009

Updated: TDHCA Down Payment Assistance Programs No Longer Accepting Applications

The Texas Department of Housing and Community Affairs announced today a short-term loan program that allows people to get a slice of the $8,000 upfront, then pay it back to the state when their federal tax credit money rolls in.

The program should help people who want to become home buyers and who qualify to receive the $8,000 from the IRS, but need that money to get to the closing table in the first place.

Now Texas is one of at least 13 states with a program to advance the $8,000 to home buyers, according to the National Association of Home Builders.

The TDHCA loan is interest-free, but home buyers have to pay it back to the state quickly. And there’s a limited pool of money available — enough for around 700 home buyers statewide to tap at once.

“Our hope is that Texans will use these programs and repay the department very quickly so we can give other Texans the opportunity to tap into it,” said Michael Gerber, executive director of TDHCA.

No exotic mortgage loans are allowed. Buyers must take out a conventional, FHA, VA or USDA mortgage loan and take a home buyer education class.

And buyers don’t apply directly to the TDHCA. They must go through an approved mortgage lender, of which there are hundreds, who will walk them through the process.

Two programs are available. One provides 5 percent of the mortgage amount, up to $7,000, and must be paid back within 90 days or the state will start charging 10 percent interest.

It is available to all who qualify for the federal tax credit, as long as no exotic mortgage loans such as adjustable-rate loans or 40-year loans are used.

The second TDHCA program provides 5 percent of the mortgage loan amount, up to $6,000, and must be paid back within 120 days to avoid paying interest. That program is available only to people who already are using one of the state agency’s home buyer programs, geared toward lower-income residents.

The funds are available only on qualifying purchases made by December 1, 2009 to eligible borrowers on a first come, first serve basis.

Now if you are thinking of purchasing a home in the San Antonio area and would like to take full advantage of the new down payment assistance programs offered by TDHCA register below to get started:

Posted by Daniel Gaitan | Filed Under San Antonio Real Estate News