Homebuyers & Renters

When you buy a house, you usually have to also make a down payment. The down payment requirement is equal to a percentage of the cost of the property and can vary based on the type of loan you receive. For example, if a home costs $100,000 and a down payment of 5% is required, you must pay $5,000 at the time of purchase.

Typical down payment requirements:

• FHA= 3.5%
• USDA=0%
• VA=0%
• Conventional= 3-5%

Keep in mind that there will also be closing costs associated with your home purchase. Closing costs are the fees and expenses paid when the home sale is finalized (“closing”). These are separate from the down payment. Common closing costs include:

• Loan origination fees
• Appraisal fee
• Title insurance
• Home inspection
• Attorney or escrow fees
• Property taxes and insurance prepayments
• Recording fees

Typical closing costs are usually about 2%–5% of the home purchase price. A quick way to think about it:

• Down payment = equity in your home
• Closing costs = transaction and loan fees to complete the purchase

Buying a home can feel overwhelming, especially when it comes to saving enough money upfront. That’s where Down Payment Assistance (DPA) can help.

If you qualify for TSAHC programs, you may be able to receive up to 5% of your loan amount to help pay for your down payment and/or closing costs through a participating lender.

You can choose between:

• A grant — free money that never has to be repaid, or
• A deferred forgivable second lien loan — a loan that is forgiven after three years as long as you don’t sell, refinance, or move out of the home during that time.
• A deferred repayable second lien loan – a loan that is repayable upon the sale, transfer, payoff or refinance of the first lien mortgage loan.

For many first-time home buyers, this assistance can make buying a home more affordable and help reduce the amount of cash needed upfront.

“Homes for Texas Heroes” Program
If you’re in a hero profession, this is the home loan program for you. Hero professions include:

• Professional educators, which includes the following full-time positions in a public school district: school teachers, teacher aides, school librarians, school counselors, and school nurses
• Police officers and public security officers
• Firefighters and EMS personnel
• Veterans or active military
• Correction officers and juvenile corrections officers
• Nursing faculty and allied health faculty

“Home Sweet Texas” Home Loan Program
If you don’t qualify under one of the professions listed above, this is the best program for you.

If you are buying your first home, you can also apply for a mortgage interest tax credit known as a Mortgage Credit Certificate (MCC). To qualify, you must meet certain income requirements and the home must meet certain sales price restrictions.