Down Payment Assistance
Home Mortgage Loan Special Programs
Saving for a down payment is difficult, and many would-be homebuyers have found themselves blocked out of the market because of their lack of savings. Fortunately, Texas is home to several programs that can offset down payment and closing costs and help more Americans achieve their dream of homeownership.
What to Know
There are typically two types of down payment assistance programs: those that offer aid in the form of grants and those that use second liens. Considered gifts, grants do not have to be repaid by the buyer at any point. Second liens must be paid back in full when the home is sold or refinanced. Interest rates on second liens are fixed for 30 years.
In order to be eligible for down payment assistance, you will have to meet certain requirements regarding income, family size, and location.
Heroes and Educators
Homes for Texas Heroes offers an FHA loan to buyers who are public servants or educators. In addition to a fixed interest rate, the program offers down payment and closing cost assistance, up to 5 percent of the mortgage loan amount, in the form of a grant.
To be eligible, you must be a full-time paid:
- Police officer
- EMS employee
- Public security officer
- County jailer
- Juvenile corrections officer
- Allied health or nursing faculty member
- K-12 educator
- Teacher’s aide
- School librarian
- School nurse
- School counselor
Learn more about the Homes for Texas Heroes program at TSAHC.org.
Current, Previous, and First-Time Homebuyers
There are also several home loan programs that offer competitive interest rates to eligible homebuyers. In addition to a fixed interest rate, these programs offer down payment and closing cost assistance in amounts ranging from 4 to 5 percent of the mortgage loan in the form of either a second lien or a grant. Contact a Premier loan officer to see if you’re eligible for one of these programs.
Mortgage Credit Certificate
A Mortgage Credit Certificate, or MCC, gives eligible homebuyers a tax credit for a portion of their annual mortgage interest. This is capped at $2,000 per year and is available for every year you occupy the home as your principal residence. An MCC could save you thousands of dollars over the life of your loan.
The program may be right for you if you:
- Meet certain income and home purchase requirements
- Have not owned a home as a primary residence in the past three years
- Meet the qualifying requirements of the mortgage loan
- Plan to use the home as your principal/primary residence
The MCC is a nonrefundable tax credit, so you must have a tax liability in order to take advantage of it. For more information on special loan and down payment assistance programs, get in touch with a Premier Nationwide Lending loan expert now.