April 30, 2024
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.
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.
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!
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.
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 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.
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.
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!
