The housing market in Texas is booming, and millions of people want to buy a home in this state. The problem is many people, perhaps like you as a first time home buyer in Texas, don’t know where to start. All they need is to make sure they follow the laws and regulations. And they don’t see what assistance programs are available to them or how they can qualify for a mortgage loan. Thus, Hanfincal will gather everything in a row in this blog. Let’s discover the homebuyer programs that you can avail of!
1. 6 Best First-Time Home Buyer Programs Texas
1.1. 1st-Time Homebuyer Programs
‘1st-Time Homebuyer Programs’ is a consultant service that finds the best first-time homebuyer programs for you and guides you through the home buying process.
They work with you to ensure you have all of your bases covered and help if something goes wrong. Besides, they will ensure that your finances are ready when you take out a mortgage and that you know all your options.
Their team of experts has access to all of the best first-time homebuyer programs in Texas. Therefore, they can help you decide which one is right for your situation. They don’t just want to sell you on a program — they want to ensure it’s right for you!
Get a new home in Texas is very easy with a free consultant here!
1.2. Texas Department of Housing and Community Affairs – TDHCA
TDHCA targets middle- and low-income households. It helps them get home ownership in Texas.
If you have not owned a home in the past three years, you are counted as a first-time homebuyer. If you are an honorary speech veteran living in Texas, you automatically qualify for this program.
TDHCA offers several benefits, such as:
- Mortgage tax credit;
- Closing cost and down payment assistance;
- Higher home price and income cap than many other similar programs in the state;
- Manufactured homes can be eligible, yet only for some.
Here are the critical requirements of TDHCA:
- Your credit score must be at least 620.
- You must comply with the purchase price and income limits (varying by area and specific program)
- The program is applicable for the purchase of a single-unit condo or single-family property.
- The program only serves homebuying for the primary residence.
You’ll find two specific programs in TDHCA – they are listed below.
- My First Texas Home Program: This program offers a 30-year low-interest mortgage for first-time homebuyers. Support interest-free prepayment of up to 5%. You can also get an FHA, VA, or USDA loan.
- My Choice Texas Home Program: This provides a second mortgage (5% down payment assistance) with no interest and no monthly payments on closing costs and down payment. The program is appropriate for all homebuyers, whether first-time or repeated buyers. You can use it to obtain an FHA, VA, USDA, or Fannie Mae HFA Preferred conventional loan.
1.3. Texas State Affordable Housing Corporation – TSAHC
TSAHC is accessible from anywhere in the state. With it, you can set up a loan with specific conditions. The lowest credit score accepted must be 620 with this program. Like other programs, it also has income and home purchase price limits.
The TSAHC offers two specific Texas first time home buyer programs:
- Homes for Texas Heroes Home Loan Program: It offers fixed-rate mortgages for firefighters, police officers, veterans, correctional officers, EMS workers, and teachers.
- Homes Sweet Texas Home Loan Program: It offers fixed-rate mortgages to people planning to buy a new home in Texas with below-average incomes.
After contacting the program, you will receive a test to measure your eligibility. If you pass, it means you have successfully qualified. Next, you can browse through a list of lenders in the program’s partners network. You can only choose one lender for assistance from TSAHC.
1.4. Texas Down Payment Assistance
Some cities in Texas also have their own down payment assistance to help first-time home buyers within their areas.
In fact, the city of Houston is one of the most affordable places in Texas to buy a home. The median home price for buyers in Houston is $181,000, which is lower than other Texas cities like Dallas-Fort Worth ($192,000), San Antonio ($179,000), and Austin ($237,000).
The city of Houston also has a lot of programs available for first time home buyers. They offer grants to help you pay off your closing costs and make an offer on your dream home. You may want to consider:
- Federal Housing Administration (FHA) Home Mortgage Program,
- FHA Home Equity Conversion Mortgage (HECM) Program,
- Houston Community Development Department (HCDD) Homebuyer Assistance Program.
1.5. Mortgage Credit Certificate – MCC
A mortgage credit certificate (MCC) is a tax credit that can be used to offset the interest you pay on your mortgage. The MCC is a grant, not a loan. It’s not taxable but must be claimed on your taxes as an income-based credit. Based on the amount borrowed (up to $2,000 per year), the credit is 20% or 30% off the interest.
1.6. Other First-time Homebuyer Loan Programs
Apart from those first time home buyer programs in Texas, once you live in the United States, consider these government-backed loans as well.
- FHA loans — The minimum down payment for an FHA loan is 3.5% of the home’s value, which is much less than the 10% required with conventional mortgages. Also, the maximum down payment on an FHA loan is 5% of the home’s value, which means you don’t have to pay extra closing costs or put as much money toward your loan as you would with a conventional one.
- USDA loans — USDA loans do not demand a down payment, but are exclusively accessible to buyers in USDA-eligible rural areas. To qualify, you need a credit score of 640 or above.
- VA loans — If you are a US veteran or a military member, you could be eligible for a VA loan, which doesn’t need a down payment.
2. First-Time Homebuyer In Texas Stats for 2022
Texas home prices ($325,000) are lower than the national average ($400,000), according to the 2022 Quarterly Housing Report. This demonstrates that Texas homebuyers had a better start than many other homebuyers around the country.
With that said, the home sale price is not fixed in any State, though. Likewise, in Texas, down payments and housing prices can differ based on the county where you live and your personal financial status.
Here is an overall picture of stats for first-time home buyers in Texas.
- Average Home Sale Price in TX: $325,000 (Q1 2022)
- Minimum Down Payment in TX (3%): $9,750
- 20% Down Payment in TX: $65,000
- Average Credit Score in TX: 692
- Maximum TX Home Buyer Grant: $40,000+ in Dallas or 5% of the loan amount statewide.
As a first time home buyer in Texas, you want to get involved in an assistance program that you can benefit from the most. In fact, there are many, but picking will get hard unless you work with the right consultant.
Therefore, ‘1st-Time Homebuyer Programs’ offers the home buying consultant service that you may want to have a look at. Its team of housing experts will first help you verify your eligibility for all possible programs and then guide you through the whole process along with constant support.
Finding a new home anywhere in the United States can be difficult in the 2020s. With a bad credit score and low savings for a down payment, you must be exhausted. But it doesn’t mean the end. As we have introduced in this blog, many financial assistance programs have your back to help you achieve your dream of having a new home and new life. As a first time home buyer in Texas, you can benefit a lot from any of them, as long as you qualify. Hanfincal hopes this article has provided you with valuable information and wishes you good luck!