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Dallas Texas Down Payment Assistance Programs 2020 | Tips by Top DFW Real Estate Agent

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Dallas Texas Down Payment Assistance Programs 2020 | Tips by Top DFW Real Estate Agent


First Time Home Buyer Programs Dallas


What is down payment assistance (DPA)?


Homeownership is an important part of the American dream. Various government agencies in Texas and non-profit organizations in Dallas offer programs to help first time home buyers purchase their first home.


Down payment assistance (DPA) in Dallas helps homebuyers with grants or low-interest loans that reduce the amount they need to save for a down payment.


Texas offers a number of programs with more than 2,000 of these programs nationwide. State, county or city governments including Dallas run many of them.


DPA programs vary by location, but many home buyers could be in line for thousands of dollars in down payment assistance if they qualify.


Four types of down payment assistance programs in Dallas


Down payment assistance (DPA) programs in Dallas help homebuyers with loans or grants that reduce the amount they need to save for a down payment.

There are four main types of DPA in Dallas:

  1. Grants, which are essentially gifts that never have to be repaid

  2. Loans (second mortgages) that have to be paid down along with with your main mortgage

  3. Loans (second mortgages) with deferred payments, which only have to be paid when you move, sell, refinance

  4. Loans (second mortgages) that are forgiven over a set number of years (often five, but up to 15 or 20), and only need repaying if you move, sell, refinance

Some DPA loans are interest-free, some have lower rates than your first mortgage, and others require the same or a higher rate than that.

Who qualifies for down payment assistance in Dallas?

Down payment assistance programs in Dallas are typically meant for first-time home buyers. However, a repeat home buyer often counts as a “first-time buyer” if they haven’t owned a home in the past three years. Other requirements might include income caps and buying a home in a qualified area.


Every down payment assistance program in Dallas is a little different. The exact requirements to qualify will depend on where you live and what programs are available. Besides being a first-time home buyer, you typically must:

  • Use the home as your primary residence in Dallas

  • Take a home-buyer education course.

  • Meet income limits. Many programs are geared to low- and moderate-income residents, so a borrower’s household income must be below a certain threshold.

  • Stay below the maximum home purchase price, which is usually a percentage of an area’s median home purchase price.

  • Purchase in an approved location (“targeted” census tract)

  • Contribute some of your own money toward the purchase.

  • Use the DPA in conjunction with an approved mortgage program

  • Work with an approved mortgage lender for the loan program



National first-time home buyer loan programs


No matter where you live in Dallas, these loan programs have benefits that may help you buy your first home, like low down payment and credit score requirements.

Conventional mortgage

Advantages

Low down payment

Limited mortgage insurance premiums

Things to know

First-time home buyers can get a conventional home loan with as little as 3% down if the mortgage meets requirements set by Fannie Mae and Freddie Mac. And if you put at least 20% down, you won’t have to pay mortgage insurance. Most lenders require a minimum credit score of 620 to qualify for a conventional mortgage, but a score around 740 earns you the best interest rates. Read Less

FHA loans

Advantages

Low credit score

Low down payment

Things to know

Mortgages insured by the Federal Housing Administration, or FHA, offer relaxed qualification requirements, especially when it comes to down payment and credit score. You can qualify for an FHA home loan with a credit score as low as 500, but you’ll need a 10% down payment. If your score is 580 or higher, your down payment could be as low as 3.5%. All FHA loans require mortgage insurance, which cannot be canceled.

VA loans

Advantages

Military

Low down payment

Things to know

Guaranteed by the U.S. Department of Veterans Affairs, these mortgages are available to military members, veterans and surviving spouses. If you qualify, you’ll see benefits such as no minimum credit score and no down payment or mortgage insurance, but you'll likely have to pay a VA funding fee.



USDA loans

Advantages

Low down payment

Rural

Things to know

The USDA home loan program encourages rural and suburban homeownership by offering zero-down-payment mortgages to lower-income buyers. Borrowers with nontraditional credit data, like rent or utility payments, can still apply, but those with a score of 640 or above will experience faster loan processing. These mortgages can be used only in certain areas, but you don’t have to be a farmer or rancher to qualify. Read Less

Statewide and Regional Programs




  • Habitat for Humanity - through volunteer labor, builds and rehabilitates houses for families in need



2020 TSAHC first-time home buyer programs


The Texas State Affordable Housing Corporation (TSAHC) provides access to fixed‐rate first mortgage loans that include down payment assistance grants (DPA) attached to the loan. These are available to all residents of Texas including home buyers in Dallas.


  • Down payment assistance available up to 5% of the loan amount for down payment or closing costs

  • 30-year fixed term

  • Conventional, USDA, VA, and FHA loan types available

  • Homebuyer education course IS required

  • Credit and income restrictions may apply



2020 TDHCA first-time home buyer programs

The Texas Department of Housing and Community Affairs, or TDCHA, offers first-time home buyer programs to assist qualified borrowers in Texas. Some national loan programs also have features that can benefit first-time home buyers. Browse the options below to find the right mortgage for your needs.

  • My First Texas Home loan for first time home buyers who want down payment and closing cost assistance, as well as low interest rates.

  • My Choice Texas Home for repeat buyers who need assistance with down payment and closing costs.

  • Texas mortgage credit certificate for breaks on federal income taxes.

Details:


Up to 5% of the note amount for down payment and closing costs

  • 30-year fixed term

  • USDA, VA, and FHA loan types

  • Homebuyer education course is required

  • Credit and income restrictions may apply



Texas Veterans Land Board


The Texas Veteran Land Board Program (TVLB) provides low interest loans toward the purchase of a home to qualified Texas Veterans, in the state of Texas.

  • Special loan assistance available for veterans

  • Fully amortized 15 or 30-year fixed term

  • Conventional, VA, and FHA loan types


Within Reach Program


The Within Reach Program is available in all of Texas.


  • Down payment assistance up to 6% of the note amount

  • 30-year fixed term with full amortization on the first mortgage

  • FHA loan types only

  • Homebuyer education course is required

  • Credit and income restrictions may apply


ADDITIONAL BUYER

RESOURCES

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