Down Payment Assistance
Down payment assistance programs provide qualified homebuyers with funds to cover the down payment, eligible closing costs, and pre-paid expenses associated with buying a home.
The assistance typically is in the form of a grant or a deferred, forgivable second lien. The loan is forgiven if the you remain in the home for a specified length of time without transferring title. The loan is due and payable if you sell, lease, or transfer title to your home, or you refinance the loan within that time.
These programs are available only for the purchase of a primary residence. Most target low-to-moderate income homebuyers with limits on family income. Programs are available for both first-time homebuyers and those who've owned a home before.
The remainder of this page describes the programs offered by the Texas State Affordable Housing Corporation (TSAHC).
How much assistance can I receive?
You can choose an amount up to 5% of the first lien loan amount.
What are the terms?
TSAHC offers assistance in the form of a grant or a 3-year forgivable second lien. Your first mortgage must be a 30-year, fixed-rate conventional or government (FHA, VA, USDA) loan.
You do not have to repay the grant as long as you're still in your home six months after your closing date.
Forgivable second lien
The second lien accrues no interest and has no required payments, and it's forgiven if you remain in your home for three years after your closing date. The loan is repayable in full if you sell, lease, or transfer title to your home, or you refinance the loan within that time.
How is the program funded?
Funding for down payment assistance typically comes from two sources, and the source affects the loan terms and determines the eligibility requirements.
Periodically, the state may sell mortgage revenue bonds that provide funding. A mortgage with bond-based assistance will have a lower interest rate. However, bond programs also have lower income limits, and they are available on a limited basis and only to first-time homebuyers.
Non-bond programs use income generated from mortgage payments to fund the assistance by offering the assistance in exchange for a higher interest rate. As such, these programs always are available.
Who is eligible for the program?
TSAHC has programs for both first-time homebuyers and those who've owned a home before. The minimum credit score is 620, and you must be able to qualify for a conventional or government loan.
The programs have income limits, which you can view here. The limits vary by county and range from about $68,000 to over $90,000 for bond programs and from about $106,000 to almost $140,000 for non-bond programs. (The limits are higher in certain economically distressed areas of the state for non-bond programs.)
Your income is your current, gross, annual income. If you need help calculating your annual income, give us a call.
What homes are eligible for the program?
The programs are available for any new or existing single family home, condo, or townhome in Texas as well as some manufactured homes that are "real property" (permanently affixed to land). Bond programs have home price limits that you can view here.
You must occupy the home as your primary residence within 60 days of closing.
How do I qualify?
You start the process by completing a standard mortgage application. You can do that by clicking the green checkmark above (labeled "Apply Online") or by giving us a call.
Prior to closing, you will need to complete an approved homebuyer education course, some of which are offered online. Click here to view a list of options.