Down payment assistance programs are like free money ... really. But most people overlook thousands of dollars available to them because they don't know to apply for down payment assistance. These programs offer loans, grants, tax credits, and other forms of aid that can help home buyers obtain down payments and pay for closing costs.
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Qualifications for DAP
The downpayment assistance program (DAP) is designed to assist Homebuyers who are interested in purchasing a home anywhere in Texas (including the Houston metropolitan area). With this DAP the first time home buyer can effectively cover his or her downpayment requirement -on an FHA Loan- making it a true Zero Downpayment Loan.
This DAP works in conjuction with any 30-year fixed interest rate loan. The interest rates offered under the program change periodically depending on the industry's market rates at the time the loan is registered.
These are the current features for this program:
Assisted funds with 30-yr fixed interest rate loan:
5% of loan amount -2nd Lien @ 5.125% interest rate (Up to $14,450 approx.)
Maximum Purchase Price:
Up to $300,000 (Harris, Fort Bend & Brazoria counties)
Up to $80,000 (Harris & Fort Bend)
Up to $135,000 (in Brazoria county)
Types of properties:
• single family
Who is eligible for the program?
Homebuyers who have not owned a home within the past three years, who meet program income guidelines and do not exceed the program purchase price limits are eligible to apply for a loan under this program.
How do I know if I qualify for a Texas First Time Homebuyer Program?
A preferred lender will determine your ability to repay a 30-year mortgage loan by reviewing your employment and income information, total monthly debt obligations and your past experience with credit along with information about the value of the property you want to buy. The lender will pre-qualify you so that you will know the approximate price range of homes to shop for. The lender will complete all necessary paperwork for loan approval and assist in the coordination of loan closing with your Realtor and closing agent. You need to get pre-qualified by a preferred lenders prior to shopping for a home.
How do I apply for the funds?
The mortgage loan funds are available through a network of participating lenders located throughout the state. Download the mobile app above to get started.
How long does the mortgage process typically take?
In general, the mortgage process takes between 30 to 60 days from the time of application to closing. This time frame is dependent upon a number of factors including the individual lender’s process and any potential qualifying issues.
What comprises a monthly mortgage payment?
Your monthly mortgage payment includes a payment to the principal balance of your loan, the interest payment, and your escrow payment (monthly payments collected to pay your hazard insurance, mortgage insurance, flood insurance, if applicable, and property taxes.) This is commonly referred to as P.I.T.I. (principal, interest, taxes and insurance.).
Are there credit and debt requirements?
Yes. The DAP loan options available must have a minimum credit score requirement of 620 for all loans. Additionally, homebuyers must have a maximum back-end debt to income ratio (DTI) of 45%. The DTI shows how much of your gross monthly income is needed to cover all your debt obligations.
Are there any other cost associated with DAP?
There is no cost needed to receive funds. However, there are upfront cost associated with purchasing a home. You may be required to have reserved funds. Upfront cost includes: Earnest Money, Option Fee, Appraisal, Survey and Inspection.