The Home Sweet Texas Home Loan Program: A Helpful Guide for First-Time Homebuyers in Texas

Buying your first home is an exciting milestone but it can also feel overwhelming navigating the homebuying process. That’s why programs like the Home Sweet Texas Home Loan Program exist to help make homeownership attainable for first-time homebuyers in Texas. As experienced home lending professionals we want to empower you with the knowledge you need to utilize this program and buy a home with confidence.

In this comprehensive guide, we’ll explain what the Home Sweet Texas Program is who qualifies the types of assistance offered, and step-by-step instructions for getting started. Whether you’re just beginning your homebuying journey or ready to take the plunge, read on to see if this program is right for you!

What is the Home Sweet Texas Home Loan Program?

The Home Sweet Texas Home Loan Program is administered by the Texas State Affordable Housing Corporation (TSAHC), a nonprofit organization created by the Texas Legislature Their mission is to help creditworthy, low-to-moderate income Texans achieve homeownership

This program provides 30-year, fixed-interest rate mortgage loans along with down payment and closing cost assistance. Borrowers work with TSAHC-approved lenders to access the program. Funds are limited, so it operates on a first-come, first-served basis.

Who Qualifies for the Home Sweet Texas Program?

To qualify for Home Sweet Texas assistance, you must meet certain income limits based on your household size and location. Your income cannot exceed 115% of the area median income. For example, the current income limit for a family of four in Austin is $99,900.

You’ll also need a minimum credit score of 620. The program allows for some flexibility on debt-to-income ratios, but your lender will determine if you meet approval criteria.

First-time homebuyers receive priority, but the program is also open to repeat buyers provided you haven’t owned a home in the past three years. Homebuyer education is required.

And you must purchase a home in Texas to use the program. The home’s purchase price cannot exceed current limits.

Home Sweet Texas Program Benefits and Options

The Home Sweet Texas Program offers several types of down payment and closing cost assistance.

Down Payment Assistance Loans

You can receive a 3% or 4% loan based on your income. This loan is deferred and forgiven after 36 monthly payments. It essentially acts as a grant after three years.

Down Payment Assistance Grants
These do not have to be repaid. The grant amount options are 3%, 4%, or 5% of the home’s purchase price.

Closing Cost Assistance
You may also receive assistance equal to 2% or 3% of the mortgage loan amount to pay for closing costs. This is a grant.

Mortgage Credit Certificate
The MCC provides an annual federal tax credit. First-time buyers may be eligible for an MCC worth 20% of the mortgage interest paid per year. Home Sweet Texas buyers get priority access to MCCs.

Step-by-Step Guide to the Home Sweet Texas Home Loan Program

Follow these steps to purchase a home using the Home Sweet Texas Program:

1. Take the Eligibility Quiz

Go to TSAHC’s website and take the quick eligibility quiz. This will tell you which programs you prequalify for before you apply.

2. Choose a Participating Lender

Work with a TSAHC-approved lender. They will guide you through the application process and loan options. Use the lender search tool to find one near you.

3. Get Pre-Approved

After applying, your lender will let you know if you are pre-approved. Pre-approval letters help strengthen offers.

4. Complete Homebuyer Education

You must finish an approved 8-hour homebuyer education course before closing. Some lenders provide classes.

5. Make an Offer and Negotiate Contract

Once pre-approved, you can start making offers! Have your agent submit offers on homes you like.

6. Finalize Mortgage and Close on Your Home

Provide all required documentation to your lender to finalize mortgage approval. Then set a closing date with your agent!

7. Celebrate Homeownership!

At closing, you’ll receive the keys to your new home! Time to celebrate achieving your dream of homeownership.

The Home Sweet Texas loan program makes buying a home affordable by providing down payment help. To start the process, take the eligibility quiz today to see if you qualify. With our guidance as your home lending experts, you’ll gain the financial assistance and knowledge needed to buy your first home with confidence. We can’t wait to help you say hello to homeownership!