Texas First Time Home Buyer Programs: Know Your Options Part 2

Are you looking for other options to fund your new home in Austin? Please review Part Two of our Texas First Time Home Buyer Programs guide. You can check out Part One here.

Real Estate Market Watch for Austin, TX

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Besides the programs mentioned in part one, here are some other Texas first-time homebuyer programs to consider:

Texas First Time Home Buyer Programs

Texas Bootstrap Loan Program

This program offers a loan for down payment and closing cost assistance to eligible veterans and their spouses. Minimum wage earners and those who want to repair their homes can also get this type of loan. Participants will be granted a loan of up to $45,000, repayable over a 30-year term with no interest. In return, participants must provide at least 65% of the labor.

Requirements:

– Your income must not exceed 80% of the area median family income or the state income limit.

You are required to contribute at least 65% of the labor and collaborate with a certified administrator.

– You must have resided in the state for at least six months before applying.

Pros:

– Interest-free loan

– 30-year term

– Eligible for up to $45,000 in assistance

Cons:

– Income limits are applicable

– Mandatory labor contribution

Fannie Mae HFA Preferred Conventional Loan

This load is available to lenders approved by the Texas Department of Housing and Community Affairs (TDHCA). It allows for a lower down payment (as low as 3%) on a conventional mortgage for qualified first-time homebuyers.

HFA loan programs collaborate with state Housing Authorities and Fannie Mae. These loans help individuals with low-to-moderate incomes afford a home. Unlike conventional mortgage programs, borrowers have reduced upfront closing costs and lower monthly payments.

Benefits of HFA loans include:

– A down payment requirement as low as 3% of the purchase price

– Access to down payment assistance in the form of loans or grants

– Lower monthly mortgage insurance premiums compared to some alternative loans

– Ability to cancel private mortgage insurance (PMI) after a few years, unlike with FHA loans

While borrowers typically need to work with a lender approved by their HFA, they still have plenty of options. The HFA and the selected lender should also provide support throughout the homebuying process.

The HFA loan program aims to increase affordability and accessibility for qualifying first-time homebuyers.

We recommend checking with local and regional organizations for additional first-time homebuyer programs in your area.

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