90-DAY DOWN PAYMENT ASSISTANCE PROGRAM - Texas
Oh Boy, oh boy! I can't believe it has taken me 2 weeks to find out about this! I have to get the word out quick.
Visit My First Texas Home website for all the particulars on this program. Then call or email me for information on who to contact in the Galveston/Houston Area for more information on this.
90-DAY DOWN PAYMENT ASSISTANCE PROGRAM
TEXAS DEPT. OF HOUSING & COMMUNITY AFFAIRS
PURPOSE: To allow the consumer to take advantage of recent legislation by receiving a short term loan prior to filing for and receiving the federal first time homebuyer tax credit.
KEY POINTS:
1. 5% of the first lien mortgage amount up to a maximum of $7,000 for down payment and/or closing costs. Must be used with FHA financing. Primary residence only.
2. Must be first time homebuyer (has not owned a home in the last 3 years). The state will validate this with signed tax returns from the last 3 years. If an extension was filed on the most recent return, the buyers will not be eligible for this program through the state for down payment assistance funds.
3. Each homebuyer must complete a pre-purchase homebuyer education course. The buyer can go to www.mgic.com and sign up for a FREE online buyer's education course.
4. Funds are limited and available only for qualified purchases made by December 1, 2009 to eligible buyers on a first come, first serve basis.
5. Repayment: The 90-Day Down Payment Assistance Program offers 0% interest for 90 days. Failure to repay the down payment assistance loan in full within 90 days will result in monthly payments of principal and interest for 2 years with an interest rate of 10%. Under this scenario, a homebuyer borrowing approximately $7,000 would have a 2nd lien note of approximately $323/month.
6. Immediately after closing, the buyer can file a 2008 amended return-IRS form 1040X and form 5405. The IRS will then send the buyer a refund check for $8000 as part of the Federal First Time Homebuyer Tax Credit. The buyer can use this money to payoff the $7000 lien from the State of Texas. Remember, the federal tax credit is 10% of the price of the house up to $8000. Refunds are generally processed within 8 to 12 weeks coinciding with the 90-day 0% interest loan.
7. Buyers must qualify with the $323/month payment included in their debt.
8. Buyers must occupy the property for 3 years or the IRS will recapture the assistance in the tax year the property is sold.
9. Consider a 45-60 day transaction from start to finish. The file must be first underwritten by the lender for approval. Then, a package is sent to the state that is estimated to take up to 20 more days for finalization. Rush transactions are not for this program.
10. $250 cashiers check is required from the buyers own funds payable to TDHCA.
11. Income Limit: Single Taxpayer: $75,000; Married Taxpayers filing a joint return: $150,000.
12. It is critical to have the sales price and loan amount correct the first time. Any changes will start the process over as the new price/loan amount would need to be re-underwritten by the lender again prior to the file going to the state of Texas
13. In the Special Provisions section of the contract, disclose the following: "Subject to availability and approval of the TDCHA 90-Day Assistance Program use of funds".
Call Mike Banes at The Mortgage Gallery
972-393-0900
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