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  • Texas Mortgage Help Programs

    Today, there is more need for families to refinance their mortgages for financial reasons, and it is harder for younger buyers to secure enough cash for the down-payment of their first home than a couple decades ago.  There are some federal programs that can assist first-time buyers such as The American Dream Act, Home Owners Emergency Loan Program, FREE HUD (department of Housing and Urban Development) Counseling and websites like FindHelp.org.

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    Many states have also implemented their own programs to help people buy affordable homes in their communities, and refinance to lower interest rates, which also strengthens their economies and improves the quality of life.  In the third quarter of 2012, the percentage of Americans that did not own their own home decreased 7% nationwide from just a month ago, and 16% from one year ago.  These sizable decreases are attributed mostly to five states: California, Georgia, Texas, Arizona and Michigan.


    texasThe Texas Mortgage Credit Program was created especially for first-time Texas homebuyers of low and moderate income to assist them to become homeowners of new or existing homes.

    If you are a first-time homebuyer, that is to say that for the last 3 years you have not owned a home as your primary residence. If your income and the purchase price of the property is within the maximum allowed by the program and you are going to use the home as your primary residence then you are eligible to receive a Mortgage Credit Certificate (MCC).An MCC qualifies homebuyers to claim a dollar for dollar reduction on their federal tax liability for mortgage interest paid each year.

    The size of the yearly tax credit will be 30% of the annual interest paid on the mortgage loan. The maximum amount of tax credit can not be more than $2,000.00 dollars per year. For example a person with a $121,000.00 mortgage and a 6.0% interest rate would normally pay $7,260.00 interest for the first year. But with the 30% reduction rate of the MCC which comes to $2,178.00 the buyer would get a $2000 (the maximum) mortgage credit which means that instead of paying $7,260.00 interest he or she would pay $5,260.00 A saving of $2,000.00 every year.

    This will last as long as the mortgage is outstanding and the borrower uses the home as the primary residence. The homebuyer must adjust the W-4 form with their employer and file the IRS form 8396 when they do their income tax return. The forms are available on the IRS website. It must be noted however that the MCC does not apply to the refinancing of an existing loan with the exception of the Qualified
    Subprime loan originally financed through an Adjustable Rate Mortgage (a mortgage loan that stipulates the interest rate will be adjusted at a future date, usually 1,3 or 5 years)and that was financed after 2001 and before 2008 and the borrower must meet the Federal Housing Administration Hope for Homeowners Guidelines. The Texas Mortgage Credit Program has higher income and purchase price limits in certain cases and the first time homeowner requirement can be waived too if for example the new property is located in a targeted area.

    A targeted area is an area of chronic economic distress. To check whether or not your new residence falls in a targeted area you can look at the list of targeted areas on the website by county under Targeted Areas Census Tracts. Disaster areas benefit from these exceptions too. In any case, prior to the purchase buyers are required to complete the homebuyers education course by certified providers. Lists of providers are available on the website also.

    The State of Texas hopes that this program will help many citizens of Texas become homeowners, in this
    way strengthening the community.

    texasThis program was started in May 2010 when The Texas Department of Housing and Community Affairs (TDHCA) made public the amount available to help fund first-time homeowners. The amount was $500 million and the aim is to help moderate or low income homebuyers to finance their first home purchase.

    They made two different loan types available “assisted Loans” and “Unassisted Loans”. Assisted Loans are mortgage loans offered with an interest rate which is slightly more than the current market interest rate and the borrower receives help with both the down payment and the closing costs in the form of a second loan which is 5% of the total mortgage and is loaned at 0% interest over 30 years. No monthly payments are payable but this assistance for down payment and closing cost is to be paid in full should the property be sold refinanced or the mortgage loan repaid. Low and moderate income homebuyers include homebuyers who earn up to 115% of the average family income for the area depending on the size of the family.

    However some areas known as targeted areas are economically distressed and anyone wishing to buy in these areas is allowed to earn up to 140% of the average family income for the area, again depending on the size of the family.

    More information can be obtained by checking the “Combined Income and Purchase Price Limits Table”. Unassisted Loans are loans that do not include down payment or closing cost assistance. However the interest rate applied is slightly less than the current interest rate. All mortgage loans are at a 30 year fixed rate. This program may change the interest rate periodically according to industry market interest rates at the time the borrower takes out the loan. The Texas First-Time Homebuyer Program requires all those who wish to receive a loan to take a Homebuyer Education Course.

    These are pre-purchase homebuyer education counseling courses made available through Texas Statewide Homebuyer Education Providers (TSHEP), certified by the Department of Housing and Community Affairs or the programs participating lender network available on-line. The TSHEP was created in order to provide information and counseling for prospective homebuyers so that the borrower can be aware of the details of the home buying process. The TDHCA, wishing to ensure that the quality of homebuyer education throughout the State of Texas is uniform, made a contract with Neighbor Works America to teach local nonprofit organizations the principles and applications of homebuyer education for both pre and post purchase and to certify these  organizations as providers.

    There are about 400 certified providers to date. A list will be provided for homebuyers upon request –call 1-800,792-1119.Don’t hesitate to contact the TDHCA it may help you to have the pleasure of owning you own home.

    Texas Flag

    Texas Flag

    Losing your home can be one of the most despairing situations a family goes through. It ranks up there with losing a loved one and divorce because it combines two things we find stressful: changing homes and financial difficulties. If you are at risk of losing your home it is important you act now. Texan residents can apply for free legal and financial help.

    The U.S. Department of Housing and Urban Development provides up-to-date lists of approved agencies in Texas you can contact either for free for a nominal (i.e. very cheap) fee. Unfortunately, many of us delay asking for help till it is too late.

    Why call a counselor?

    Mortgages and foreclosure proceedings are not always easy to understand. They often require a good understanding of financial and legal matters most of us simply do not have. A qualified professional understands the financial and legal implications of mortgages and foreclosures and can provide you with practical help. For instance, a professional counselor can help you prepare a budget, explain what refinancing or mortgage modification options you have, and put you in touch with local housing programs and resources.

    And you can get all that for free. Call 1-888-995-HOPE (4673) or visit HUD’s current list of approved counseling agencies in Texas to find which one is closest to you.

    Why call a lawyer?

    Foreclosure and bankruptcy law can be complicated and difficult to understand. Each state has its own laws and even counties can have varying rules on how foreclosures are carried out. It pays (especially if it’s free) to contact a lawyer who will be able to provide personalized help on your legal situation. Sometimes the best option for your particular financial situation might not be obvious. For instance in some cases foreclosure might be unavoidable and filing for bankruptcy could be your best option. You will have to decide under which chapter to file bankruptcy. A good bankruptcy lawyer can provide you with advice on the best way to do it and maybe even help you keep your home.

    The U.S Department of Housing and Urban Development provides a list of Texan organizations and attorneys that offer free legal services to low income residents. Although you should hire a specialized bankruptcy lawyer if you think bankruptcy is an option for you, these organizations can provide help or put you in contact with a lawyer that can help. These organizations might charge a nominal fee but nothing compared to the hourly rates of a for-profit lawyer.

    Other options

    The Texas Department of Housing and Community Affairs has programs for low to moderate income residents to help them improve, keep or buy a home. For more information on the housing programs available to you in Texas read this article.

    Asking for help and having someone dig into your private financial matters may be the last thing you want. However, if you are going through financial difficulties and you cannot afford your mortgage payments, you do need help. The good thing is that help is available and free, you just need to ask for it.


    Flag of Texas

    The Texas Department of Housing and Community Affairs is the lead agency providing key housing programs in Texas. Whether you are a Texas housing developer or need help with your home this is a government agency you should contact. There are 20 programs currently available that provide help with taxes, avoiding foreclosure, finding a suitable loan and improving the housing situation in Texas.

    Let us review four of these programs:

    Texas First Time Homebuyer Program.

    This program allows homebuyers that have not owned a home in the last three years and have a low to moderate income level to qualify for a below market-interest rate mortgage. This allows low income citizens qualify for prime mortgages. A low to moderate income level is defined by anything between 30% and 115% of the area’s median family income (ANFI). TDHCA mortgage help is available to qualified people

    Weatherization Assistance Program

    This program helps low income people control their energy expenses by installing weatherization upgrades and providing general energy saving education. This program will carry out an energy audit on your home and identify energy efficiency issues you need to deal with. It also includes the installation of energy efficient measures like adding insulation (floors, walls and ceiling), covering holes in the building, tuning or replacing inefficient appliances. These upgrades must provide a measurable improvement to the homes energy efficiency and comply with certain standards. If you are interested in applying for this program call (888) 606-8889 or visit  tdhca.state.tx.us, the Texas Department of Housing and Community Affairs website.

    Texas Mortgage Credit Program

    The Texas Mortgage Credit Program helps Texas residents with low to moderate incomes buy a home. Eligible residents can apply for a tax credit on 30% of the annual interest paid on a mortgage to a maximum of $2,000 a year. This program focuses on first time buyers, or people who have not owned a home in the last three years. Let’s see how this works. On a mortgage of $121,000 at a 6% interest rate, you will pay in the first year $7,260 in interest alone. The program provides a 30% tax credit on this amount which would equal $2,178. Of this amount you can apply for a maximum of $2,000, which will provide you with approximately $167 extra in your pocket every month.

    Texas Bootstrap Loan Program

    The Texas Bootstrap Loan Program provides very low income families with mortgage loans to help them improve their homes. This allows a maximum of $45,000 to each household to build a new home or improve an existing one. The catch in this program is that participants must be willing to supply at least 65% of the labor required to build or renovate their home.

    Other programs are also available to developers to encourage them to build affordable housing for low income residents. Charitable organizations can also apply for funding under certain programs. For more information visit the TDHCA website and find out what programs you qualify for.