State program broadens eligibility for buyer assistance - Brownsville Herald: Business

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State program broadens eligibility for buyer assistance

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Posted: Thursday, October 4, 2012 10:26 pm

A little more help is available to aspiring Texas homeowners with the expansion of the Texas State Affordable Housing Corporation’s down payment assistance program.

The program, which offers a low, fixed-mortgage interest rate and a down payment assistance grant of 5 percent of a borrower’s loan amount, has been extended to current homeowners and people who have previously owned a home in addition to first-time homebuyers. In the past, the program was open only to first-time homebuyers.

The non-profit TSAHC, created by the Texas Legislature in 1994 to make decent, affordable housing available to more homebuyers and renters across the state, features three homebuyer programs. The first is the Professional Educators Home Loan Program, which targets public school classroom teachers, teacher’s aides, school librarians, nurses and counselors, and full-time faculty members of undergraduate or graduate professional nursing or allied health programs in Texas. This program was created by legislation introduced by Sen. Eddie Lucio in 2001.

Another is the Homes for Texas Heroes Home Loan Program, which is for full-time, paid firefighters, emergency medical services personnel, peace officers, corrections and juvenile corrections officers, county jailers and public security officers working in the state. When it first started, the program was for firefighters only. Finally, the Home Sweet Texas Home Loan Program is for families or individuals whose annual household income is at or below 80 percent of the area median family income.

David Long, TSAHC’s president, said all three programs stipulate a 30-year, fixed interest rate, which recently dropped to 3.5 percent from 3.75 percent. The 5 percent down payment assistance is a grant and doesn’t have to be paid back, he said.

“I think we have one of the best programs around,” Long said. “With our 5 percent assistance it makes it very attractive for borrowers. Often the biggest hurdle is the down payment requirement. We want to make sure we help them with that hurdle.”

Participants in the program must be Texas residents and meet minimum credit requirements, and income and home purchase price limits; must occupy the purchased home as their primary residence; and must complete a HUD-approved homebuyer education course prior to closing on the home loan.

The TSAHC also has a Mortgage Credit Certificate Program, which provides homebuyers with an annual federal tax credit of up to $2,000 a year, based on mortgage interest paid annually, though the MCC program is only available to first-time homebuyers. For eligible first-time buyers it’s a “terrific opportunity,” Long said.

“They can take advantage of the down payment assistance when they purchase their first home and benefit from the annual tax credit with TSAHC’s MCC program,” he said.

To be eligible for the Sweet Texas Home Loan program, a family’s annual income can be no more than $48,240. With the Professional Educator and Texas Heroes programs, a one- or two-person household can make no more than $60,300, and a family of three no more than $69,345. That’s for “non-targeted” areas of the state. In the TSAHC’s special “targeted areas,” which includes many portions of Cameron County, the income limits are $72,360 and $84,420, respectively. Purchase price limits for borrowers in all three programs are $250,200 in non-targeted areas and $305,800 in targeted areas.

While the TSAHC was created by an act of the Legislature, its employees are not state employees and the organization receives no state funding, though the TSAHC board is appointed by the governor. In 2001 the Legislature granted the organization authority to issue bonds to funds its program. However, since the softening of the bond market, the TSAHC has turned to selling mortgage-backed securities on the investment market, as have many state entities, Long said.

He said the TSAHC decided to extend its programs to other than first-time homebuyers partly to make it possible for families to move to different communities within the state, particularly for professional reasons.

“The state of Texas so large,” Long said. “If we’ve got a teacher living in, say, Dallas, and if they need to move for job purposes and relocate to Brownsville, we didn’t feel that teacher should be prohibited from owning a home in the Valley.”

For more information, visit www.tsahc.org or call (888) 638-3555.

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