Frequently Asked Questions for Potential Homebuyers
Who is eligible for the programs?
The programs were created to provide affordable mortgage loans exclusively
for Texas Professional Educators, Texas "Heroes", and low income Texans.
The definition of a Professional Educator is a public full-time classroom teacher, public full-time paid teacher's aide, public full-time librarian, public full-time counselor, or public full-time school nurse,
or effective September 1, 2007, an allied health or professional nursing program faculty member .
For detailed definitions of "Heroes", please click here.
Low income is defined as those individuals or families whose annual incomes do not exceed 80% Area Median Family Income. Incomes vary by county. To view incomes in your county click here .
What is the definition of a first time homebuyer?
For purposes of this program, a first-time homebuyer is an individual
or family that has not owned or had an ownership interest in any
residence during the last three years. An exception to this requirement
exists if the home to be purchased is in a targeted area.
I just moved to Texas two months ago. Will I qualify
for this program?
Yes, there is no residency requirement under this program, except
that you currently reside in the state of Texas, and the home you
are purchasing is intended as your principal residence.
What is meant by primary, or principal, residence?
The primary residence is the home in which you intend to live on
a permanent basis.
I’ve heard that only homes in economically distressed
areas qualify under these state programs. Is that true?
The property does not have to be in an economically distressed
area (targeted area). Any new or existing home in the state of Texas
that does not exceed the maximum purchase price limits is eligible.
However, maximum
home purchase price limits are higher if the home is purchased in
a targeted area, including some rural areas. Your lender can help
you determine if you and your home qualify.
How do I apply for a mortgage loan under the program?
Eligible borrowers need to contact one of the program’s participating
lenders to assist with
the application and qualifying process.
Why are some programs limited to specific professionals?
The Texas Legislature recognizes that people working in these professions
are often paid public service salaries that could present a barrier
to owning a home in their communities.
These programs are designed to reward these individuals for their dedication and commitment
to jobs that are necessary to the health, welfare, and future of
our state, as well as provide incentives to them so that they will
be able to continue in these professions.
Are townhomes or condominiums eligible?
Townhomes and condominiums are eligible (up to four-unit dwellings)
as long as the buyer resides in one of the units.
Can I buy a second home using this financing?
No, this program is restricted to those persons who have not owned
a home in the past three years. Additionally, to qualify for purchase
under this program, the home must be your primary residence. Therefore,
vacation homes would not qualify under this program.
In the event I am no longer employed as an Educator/ Hero or sell the home, do I have to pay back any portion of the grant?
The only time you might have to pay back a portion of the assistance, would be if you sell the home within nine years of buying the home. This is called recapture tax.
Recapture tax is owed only when ALL three of the following events occur:
- You sell your home within nine years,
- Earning significantly more income than when you bought the home, and
- Have a gain from the sale of your home.
Recapture tax is a federal tax that a borrower may be required to pay from the net profit they receive from the sale of their home. If they have to pay recapture tax, it would be due when they file their federal income tax for the year in which they sell their home. The maximum recapture tax is 6.25% of the original principal balance of the loan or 50% of the gain on the sale of the home, whichever is less. For more information , please click here .
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