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Down Payment Assistance Programs for Houston Homebuyers

After dreaming of homeownership, the next step is making it a reality, which can be confusing. Many questions pop up for those beginning the process, like how much do you have to put down on a house? What to know about buying a house in Texas? What is a “First-Time Home Buyer”? Where to find home buying help in Texas?

Houston Habitat for Humanity is here to support you! Below is a guide to available homeowner down payment assistance programs in Texas.

Are You a First-Time Homebuyer?

If you are, or would like to be, a good place to start is to see if you qualify for a first-time homebuyer program, loan or assistance. Two major benefits of being a first-time homebuyer is that requirements are typically more flexible than traditional programs, and many options are available.

The average listing price for homes in Houston was $334,000 in February 2024. That number dropped 3.2% year-over-year, according to realtor.com. At today’s home prices, making a down payment in Houston, Texas might cost $10,020 for 3% down payment, or $66,800 for 20% down payment.

Programs & Grants for Texans

Texas has its own homeownership assistance programs and grants designed especially for those who call the Lone Star state home.

● Houston Habitat for Humanity – through volunteer labor, builds and rehabilitates houses for families in need. Start here to see who is eligible to apply!
● NACA – provides comprehensive counseling and access to its Best in America mortgages for affordable homeownership for low-to-moderate income people.
● Texas Department of Housing and Community Affairs programs help moderate- and low-income families achieve homeownership in Texas via two programs: My First Texas Home program and the My Choice Texas Home loan.

The Texas State Affordable Housing Corporation (TSAHC) is a nonprofit organization created by the Texas Legislature to help Texans achieve homeownership. The “Home Sweet Texas” Home Loan Program starts with an eligibility quiz, then information about qualifying TSAHC programs. The next step is contacting an area participating lender and links for applying for a mortgage interest tax credit. These DPA programs are down payment assistance Texas grown!

Down Payment Assistance (DPA): What Is It?

A down payment is the money paid upfront to complete a real estate sale. Down payments are typically a percentage of a home’s purchase price and can range from 3% – 20% for a primary residence. For example, if a home costs $100,000 and a down payment of 5% is required, then $5,000 must be paid at the time of purchase.

Down payment assistance (DPA) is a general name for financial help for homebuyers. These programs reduce the amount needed to be saved for a home’s down payment. Available options for DPAs include loans for repayment with low or no interest, forgivable loans, and monetary gifts which never have to be repaid.

Houston Homebuyer Assistance Programs

The City of Houston Housing and Community Development provides a no-interest, forgivable loan (secured by a lien) of up to $50,000 to income-qualified residents for first-time homebuyers inside the city limits through their Homebuyer Assistance Program.

Qualifications to be met are household income at or below 80% of the Area Median Income, first-time homebuyer (or have not owned a home in the last 3 years), U.S. citizen or permanent resident, and the home for purchase be eligible to pay taxes to the City of Houston. The loan is fulfilled if the buyer lives in the home for five years.

Another option is through the Harris County Community Services Department’s down payment assistance, which assists with home buyers looking in the unincorporated areas of Harris County; this support excludes homes within the official cities of Houston, Baytown, or Pasadena. Qualifying criteria includes a credit score of 580 and successful completion of an 8-hour homeownership education course.

Houston Habitat for Humanity homes “will be in these areas in the near future”, according to Cassandra Robinson-Bacon, Homeowner Services Director. Learn more at a Virtual Home Ownership Fair and get ahead of the curve with this option!

Special Home Purchase Programs for Service Professionals

Special programs are set up for service professionals such as teachers (Pre-K through 12th grade), law enforcement officers, firefighters, and emergency medical technicians. The Good Neighbor Next Door program, overseen by the U.S. Department of Housing and Urban Development (HUD), works with these groups to buy a home in a “revitalization area” for 50 percent off and live in it for at least three years.

TSAHC has a similar program for school teachers, teacher aides, school librarians, school counselors, and school nurses, plus police officers and public security officers, firefighters and EMS personnel, veterans or active military, county jailers, peace officers, correction officers and juvenile corrections officers, public security officers, and nursing faculty and allied health faculty. The “Homes for Texas Heroes” Program is a gift with no repayment needed and no requirement to live in the home for a minimum time.

Veterans Only Assistance

For veterans and service members, the Veterans Land Board Housing Assistance Program (VHAP) could provide low-interest loans to buy a home or land. VLB loans frequently do not require a down payment. If the loan term is between 15 and 30 years, up to $726,200 can be borrowed, and veterans with a VA disability score of 30% or higher are eligible for lower interest rates. Property criteria applies, such as a construction finish date of at least five years for a multi-family property.

Native American veterans and their spouses may be eligible for the Native American Direct Loan (NADL). The NADL program has no down payment requirement, limited closing costs, and a low-interest, 30-year fixed mortgage. This loan type is also a reusable benefit, meaning you can get more than one NADL to buy, build, or improve another residence in the future.

Learning Resources

Everyone can benefit from more knowledge! Online resources are offered to anyone looking for more information.

Examples can be found at the Texas Department of Housing and Community Affairs; this course walks through three important phases of the home buying process: preparing for homeownership, financing and purchasing. The Texas Mortgage Credit Certificate is also offered. This may allow for a valuable tax credit when applying for a mortgage.

Houston Habitat for Humanity has a very helpful Virtual Homeownership Fair, which answers many questions and provides valuable resources. Further, Houston Habitat for Humanity can assist with many tasks connected to homeownership, even improving credit scores!

  1. https://themortgagereports.com/76978/texas-first-time-home-buyer-programs-grants
  2. https://www.hud.gov/states/texas/homeownership/buyingprgms
  3. https://www.bankrate.com/mortgages/first-time-homebuyer-loans-and-programs/#how-to-choose
  4. https://houstontx.gov/housing/hap.html
  5. https://www.hud.gov/states/texas/homeownership/buyingprgmshttps://education.myfirsttexashome.com/

 

 

¿No tienes historia crediticia? Aquí te explicamos por qué necesitas establecer una buena historia crediticia si quieres comprar una casa

Una casa es el gasto más grande que hacemos. A menudo representa una gran cantidad de dinero que tomamos prestado de un banco y que tardamos décadas en terminar de pagar.

Tu calificación crediticia es parte de la información utilizada por los prestamistas para calificar el préstamo y la tasa de interés. Si tu calificación crediticia es baja, puede afectar tu capacidad de calificar para un préstamo. Además de un mal crédito, una historia limitada de crédito establecido puede dar como resultado una baja calificación crediticia.

¿Cómo se determina tu Calificación Crediticia?

Cuando solicitas un crédito hipotecario, los prestamistas quieren saber cuál es el riesgo que toman al prestarte dinero. Para evaluar este riesgo, los prestamistas a menudo obtienen un reporte de crédito y una calificación crediticia. Las calificaciones crediticias más usadas son los Puntajes FICO®. Los Puntajes FICO® ofrecen una forma, sin prejuicios y probada, de evaluar el riesgo crediticio de un consumidor — lo que ayuda a los consumidores a obtener el crédito más rápidamente y de manera más justa.

Esto es lo que determina tu calificación de crédito:

  1. Historial de pagos: si has pagado tus cuentas de crédito a tiempo
  2. Cantidades adeudadas: la cantidad de crédito y préstamos que estás usando
  3. Duración de la historia de crédito: por cuánto tiempo has tenido crédito
  4. Nuevo crédito: frecuencia de las consultas de crédito y de apertura de nuevas cuentas
  5. Combinación del crédito: la combinación de tu crédito, cuentas con tiendas departamentales, préstamos a plazos, cuentas con compañías financieras y créditos hipotecarios

Hay tres oficinas de crédito importantes, que son Equifax, Experian y TransUnion. Ellas tienen tu información de crédito. Cuando obtienes un nuevo préstamo, haces los pagos para tus préstamos o te atrasas con ellos, o usas una tarjeta de crédito, es común que tu prestamista reporte esta información a las oficinas de crédito. La información almacenada en las oficinas de crédito se representa en tus reportes de crédito. Tus reportes de crédito contienen información sobre tu historial de crédito, lo que incluye préstamos, tarjetas de crédito, consultas y más.

Yo pago mis cuentas en efectivo y no uso tarjetas de crédito. ¿Cómo afecta esto a mi calificación crediticia?

Este es un problema para muchas personas que quieren comprar una casa. Debido a que pagan en efectivo, es posible que no hayan establecido crédito, o tengan crédito insuficiente, o no cuenten con una calificación crediticia o tengan un puntaje de crédito bajo.

Si esto es similar a tu situación, no estás solo. Se estima que 53 millones de personas son “invisibles al crédito”, lo que significa que no tienen un expediente en una de las oficinas de crédito, o que su expediente es insuficiente para que se les otorgue una calificación. A menudo esto es el resultado de no tener una historia de uso de una tarjeta de crédito o de un préstamo tradicional. Como resultado, es posible que tengas un riesgo más alto de recibir préstamos predatorios, y que virtualmente quedes impedido de las oportunidades económicas para la propiedad de vivienda. Entre más bajo sea tu puntaje de crédito, más alto es el riesgo, lo que puede afectar tu pago mensual del crédito hipotecario.

¿Cómo puede ayudar Houston Hábitat?

Está creciendo el interés en iniciativas que permitan a los consumidores incluir en la calificación de crédito y en las evaluaciones para los préstamos su historial de pagos puntuales de la renta o de otras obligaciones financieras. El reporte de pagos de la renta está surgiendo como el enfoque principal en estas reformas, ya que las investigaciones han demostrado que es un fuerte indicador de la habilidad futura del arrendatario para hacer los pagos a su crédito hipotecario. Otras prometedoras fuentes de datos incluyen pagos de los servicios públicos, pagos de cable y de teléfono celular, así como estados de cuenta bancarios que demuestren el flujo de efectivo. Al otorgar una imagen más completa de tu historial de responsabilidad financiera, esto puede reducir la “invisibilidad crediticia” y ampliar el acceso a un crédito seguro y asequible.

Houston Hábitat trabajará contigo para verificar el crédito a través de documentos no tradicionales de crédito o cartas de recomendación de los acreedores que típicamente no reportan a las oficinas de crédito. Estos “otros” acreedores pueden incluir la renta, el seguro del carro, las facturas de servicios públicos, negocios locales y gastos médicos. Te ayudamos a determinar tu actual calificación crediticia y observar tu historia crediticia completo en lugar de solo una calificación crediticia y trabajamos duro para no rechazar a solicitantes en nuestro programa solo con base en su calificación crediticia.

Fuentes:
Inclusive Credit Scoring (“Calificación Crediticia Inclusiva”), 25 de enero de 2022, Houston Habitat International
Educación sobre el Puntaje Fico, FicoScore.com

Calculadora de Hipoteca para Familias con Bajos Ingresos

Las calculadoras de hipotecas le ayudan a estimar el pago mensual de su préstamo, incluidos el capital, los intereses, los impuestos sobre la propiedad y el seguro. Algunas calculadoras estiman cuánto puede pagar mensualmente, otras calculan cuánto del total de una casa le es posible pagar.

La mayoría de estas calculadoras le harán preguntas sobre sus ingresos mensuales, gastos y más. Estas calculadoras rápidas no usan el mismo proceso que el de un prestamista hipotecario ni tampoco toman en cuenta otros factores para el préstamo.

¿Por qué las calculadoras de hipoteca no funcionan para familias con bajos ingresos?

Muchos compradores que van a comprar una casa por primera vez recurren a las calculadoras de hipoteca para ver si les es posible comprar dicha casa. Una de las preguntas más frecuentes es: “¿Cuánto puedo pagar por una casa?” Para mucha gente con bajos ingresos, el usar estas calculadoras termina con sus sueños de convertirse en propietarios de vivienda inmediatamente.

Habitat para la Humanidad de Houston está comprometido a colaborar con las familias para ayudarles a comprar casas asequibles y crear espacios seguros para vivir.  No somos una herramienta digital, sino gente real que está aquí para ser un aliado de aquellas familias que más lo necesitan.

Aquí hay algunas formas en las que Hábitat para la Humanidad de Houston puede ayudarle a asegurar una vivienda asequible:

¿Por qué necesito una hipoteca? ¿Las casas de Habitat para la Humanidad no son gratuitas?

Las casas de Habitat para la Humanidad no son gratuitas. Parte de trabajar con Habitat para la Humanidad es asegurarnos de que nuestras familias puedan tener una hipoteca, ya que el ser propetarios de vivienda les ayuda a acumular riqueza con el tiempo mientras aumentan su capital.

¿Cómo puede Houston Habitat para la Humanidad ayudarme a asegurar una hipoteca?

Habitat para la Humanidad de Houston trabaja con una gran variedad de prestamistas para asegurar una hipoteca asequible para cada familia que califica para nuestro programa. Existen opciones de casas para bajos ingresos y para diferentes tipos de préstamos. Habitat para la Humanidad de Houston se compromete a garantizar que los pagos de la hipoteca no consuman más del 30 % de los ingresos del propietario de una vivienda y cumple este objetivo al ofrecer paquetes financieros compuestos por préstamos con intereses bajos o nulos y préstamos condonables.

Por lo general, nuestras familias ganan lo suficiente de manera anual para pagar la hipoteca sobre una casa de Habitat para la Humanidad de Houston, sin embargo no ganan lo necesario para pagar un préstamo tradicional.

Algunos factores que influyen para lograr obtener una hipoteca incluyen un ingreso anual, pago inicial, calificación crediticia y la proporción de deuda en sus ingresos.

¿Qué tan importante es mi calificación de crédito?

Su calificación crediticia es importante pero no es el único factor para asegurar una hipoteca asequible. Entre mejor sea su calificación crediticia mejores serán las tasas de interés a las que pueda calificar y más opciones de préstamo estarán disponibles. Por lo que entre menor sea su califiación crediticia, más altas serán las tasas de interés.

Usualmente una puntuación de 620 le asegurará una buena tasa de interés. ¡Si su puntuación es menor no pierda la esperanza! Construir un crédito sólido toma su tiempo, pero los pasos no son complicados y nuestro equipo educativo puede proveerle recursos para aprender cómo mejorar su crédito con asesoramiento financiero. Mientras se prepara para comprar una casa, practique dar seguimiento a su presupuesto, asegúrese de hacer su pagos a tiempo (los pagos retrasados pueden dañar su puntaje muy rápido), reduzca sus saldos, (entre más crédito disponible, mejor) y evite abrir muchas cuentas.

¿De cuánto debe ser mi ingreso anual para calificar para una hipoteca?

Antes de calificar para una hipoteca, debe aplicar para ser parte de nuestro programa de propietarios de vivienda. Los requerimientos de ingresos anuales se determinan de acuerdo al número de integrantes de su familia y sus ingresos recurrentes. Para trabajar con Habitat para la Humanidad de Houston, su ingreso anual debe encontrarse entre el 50-80% de su ingreso promedio anual en Houston como se establece en el HUD.  ¿Quiere saber si usted califica para ser un propietario de vivienda en Habitat para la Humanidad de Houston?

 

No credit history? Why you need to establish good credit if you want to buy a home. 

A house is the most expensive purchase we make. It is often a substantial amount of money that we borrow from a bank and then spend decades paying off. 

Your credit score is part of the information used by lenders to qualify for your loan and interest rate. If your credit score is low, it can impact your ability to qualify for a loan. Besides bad credit, a limited history of established credit can signal a low credit score. 

How Is Credit Score Determined?

When you apply for a mortgage, lenders want to know what risk they’d take by loaning you money. To evaluate this risk, lenders will often pull a credit report and credit score. The most widely used credit scores are FICO® Scores. FICO® Scores provide an unbiased and proven way to evaluate a consumer’s credit risk — helping consumers like you obtain credit more quickly and fairly.

Here is what determines your credit score: 

  1. Payment history: Whether you’ve paid past credit accounts on time
  2. Amounts owed: The total amount of credit and loans you are using and your credit limit
  3. Length of credit history: How long you’ve had credit
  4. New credit: How often you have credit inquires or new account openings
  5. Credit mix: The mix of your credit, retail accounts, installment loans, finance company accounts and mortgage loans

The three major credit bureaus are Equifax, Experian and TransUnion. They house the history of your credit data. When you get a new loan, make or miss payments on loans, or use a credit card, it’s common for your lender to report this information to the credit bureaus. The information stored at the credit bureaus is represented in your credit reports. Your credit reports contain information about your credit history including loans, credit cards, inquiries, payments and more. 

I pay my bills in cash and don’t use credit cards. How does this affect my credit score? 

This is an issue for many people who wish to purchase a home. Because they pay in cash for most services, they may not have established credit history or may have insufficient credit resulting in no credit score or a low credit score. 

If this sounds like your situation, you are not alone. An estimated 53 million people are “credit invisible.” Credit invisible means they don’t have a credit bureau file, or the file is insufficient for scoring. This is often the result of not having a history of using a credit card account or traditional loans.

As a result, families with invisible credit may be at high risk of predatory loans, and are virtually locked out of affordable homeownership opportunities. The lower your credit score, the higher the risk as determined by lenders. A high risk loan score can affect your monthly mortgage payment with higher interest rates. 

How can Houston Habitat help with credit scores?

Momentum is growing for initiatives that enable consumers to have their history of on-time rent payments or meeting other financial obligations included in credit scoring and lending evaluations. Rent payment reporting is emerging as a primary focus of these reforms. Research has found it to be a strong indicator of a renter’s future ability to make mortgage payments. 

Other promising alternative data sources for credit history include utility, cable and cell phone payments, as well as bank account statements demonstrating cash flow. By providing a more complete picture of your history of financial responsibility, it can reduce “credit invisibility” and broaden access to safe, affordable credit.

Houston Habit will work with you to verify credit through nontraditional credit documentation or reference letters from creditors who do not typically report to the credit bureaus. These “other” creditors may include rent, car insurance, utility bills, childcare, local businesses, and medical expenses. We help you determine your current credit score and look at your entire credit history rather than just the credit score. We work hard to not deny applicants to our program solely based on your credit score. 

Sources:
Inclusive Credit Scoring, January 25, 2022, Houston Habitat International
FicoScore Education, FicoScore.com

 

Mortgage Calculators For Low Income Families

Mortgage calculators help you estimate your monthly loan payment including principal and interest, property taxes, and insurance. Some calculators estimate how much monthly payment you can afford, others help determine how much of a house you can afford as a total number.

Most of these calculators will ask questions about your monthly income, expenses, and more. These quick calculators don’t use the same process as a mortgage lender or take into account other lending factors.

Why mortgage calculators don’t work for low-income families

Many first-time homebuyers turn to a mortgage calculator to see if they can afford to buy a home. One of the biggest questions is “how much house can I afford?”. For many low-income people using a traditional mortgage calculator immediately ends their dream of becoming a homeowner.

Houston Habitat for Humanity is committed to partnering with families to help them buy affordable homes and create safe places to live. We are not an online tool, but real people who are here to partner with those families that are most in need.

Here are some ways that Houston Habitat for Humanity can help you secure an affordable home:

Why do I need a mortgage? Aren’t Habitat for Humanity homes free?

Houston Habitat homes are not free houses. Part of partnering with Houston Habitat is ensuring our families secure their own mortgage because homeownership helps families accumulate wealth over time as they build equity.

How can Houston Habitat help me secure a mortgage?

Houston Habitat works with a variety of lenders to secure an affordable mortgage for every family who qualifies for our program. There are low income home loan options for different types of loans. Habitat is committed to ensuring mortgage payments consume no more than 30% of a homeowner’s income and meets this goal by offering financial packages composed of low- or zero-interest loans and forgivable loans.

Typically, our families will earn enough annually to pay back the mortgage for the home that they buy from Habitat, but not quite enough to qualify for a traditional home loan. Factors that contribute to securing a mortgage include annual income, down payment, credit score and debt to income ratio.

How important is my credit score?

Your credit score is important, but not the lone factor in securing an affordable mortgage. The better your credit score, the better interest rate you’ll qualify for and the more loan options that will be available. So the lower your credit score, the higher the interest rate.

Typically a score of 620 will ensure a good interest rate. If your score is lower than this, don’t lose hope! Building strong credit takes time, but the steps aren’t complicated and our educational team can provide resources to learn about improving your credit with financial counseling. While preparing to buy a home, practice following a budget, make sure you make all payments on time (missed payments can sink your score pretty quickly), reduce your balances (the more available credit, the better), and avoid opening too many new accounts.

What should my annual income be to qualify for a mortgage?

Before qualifying for a mortgage, you need to apply to be part of our homeownership program. Annual income requirements are based on the size of your family and your income. To partner with Houston Habitat, your annual income must be between 50-80% of the annual median income for Houston as established by HUD.

Want to see if you are eligible to be a Houston Habitat Homeowner?