You wish to have a house of your own but the down payment is holding you back. Maybe you have a hard time saving for a full down payment or your credit score is not in great shape. Whatever your reason, you must know that both the Texas state government and the US federal government design special programs for first-time homebuyers.
These special programs are offered to those who are struggling to gather a down payment. Depending on your needs, you may be able to find a loan with cheap down payment requirements or low credit score minimums. To help you get started, here are the programs you can consider:
• FHA (Federal Housing Administration) loans: this is one of the most popular loans across the country, which is handled by the FHA. This loan offers some of the lowest down payment options at 3.5%. However, this only applies to homebuyers who have FICO credit score of 580 or higher. If you fall below, the FHA will require a 10% down payment.
- VA (Veterans Affairs) loans: for current members of the US military and their eligible beneficiaries, they can apply for VA loan. The best thing about this loan is as long as the value of your new home does not fall within the standards, you can have as much as 100% of the price covered by your loan.
- NADL (Native American Direct Loan): this is an alternative to VA loans. The NADL is created for Native American servicemen and their spouses. The best thing about this program is the 0% down payment requirement plus it does not call for private mortgage insurance. On top of that, homebuyers will receive lower closing costs.
- My First Texas Home: this program is handled by the TDHCA (Texas Department of Housing and Community Affairs). It is a 30-year fixed-rate loan with easy stipulations and decent interest rates. If it is paired with down payment assistance, it could be worth as much as 5% of your home’s value.
- Texas Bootstrap Loan Program: this program is actually considered one of the most distinctive first-time homebuyer programs in the country. Instead of purchasing a new home, this program is designed to help you build your own home. As an “owner-builder”, you will be under the supervision of NOHP (Nonprofit Owner-Builder Housing Provider). If you want this program, you should at least provide 65% of labor associated in the building. The program can give a max of $45,000.
• Texas Mortgage Credit Certificate Program: this is actually similar to programs that other states offer. The program allows the borrowers to apply as much as 40% of their mortgage interest payments as a tax credit. However, there is a limitation to this – $2,000 per year. To qualify, you must be a first-time homebuyer. This means that you should not have owned a home in the past three years.
As a first-time buyer, things are new to you but it does not mean that you prematurely choose a mortgage because it could put you in a bad place later. If you are still confused, you should not hesitate to talk to experts. You can also consider https://onqfinancial.com/down-payment-assistance/texas-programs.