Last week the Texas Department of Housing and Community Affairs (TDHCA) released the first $50,000,000 in a $500,000,000 mortgage revenue bond called TDHCA Bond 77. This money is being made available for mortgage loans to low to moderate income Texans, and is forecast to help 4000 to 4500 families in Texas become first time homeowners. This bond program represents the largest financing initiative for Texas homeowners in the history of TDHCA, and has huge potential impact for real estate professionals working with low to moderate income homebuyers, particularly those that are first time homebuyers who may be having difficulty coming up with a sufficient down payment, and/or having trouble finding interest rates that fit their budget. Below are the highlights of the press release, as well as a link to the full release. Also attached is a more comprehensive analysis of the program by John McClellan, with Supreme Lending.
How does it work? Money is released every 30 days in $50,000,000 increments on a first come, first serve basis to qualified homebuyers (primarily, but not exclusively limited to first time homebuyers). The first $50,000,000 was released last week.
What does it offer? Below market interest rates on 30-year, fixed rate mortgages, and also includes down payment assistance program. 4.99% rate on loans without down payment and closing cost assistance, or 5.74% on loans with down payment and closing costs assistance. New rates will be announced with each monthly release of $50,000,000 to keep rates below market.
Who Qualifies? Primarily, first time homebuyers, and some existing homeowners (if they are purchasing in Targeted Census Tracts), classified as low to middle income borrowers ($102,620 per year for a family of four is the maximum allowable income level).
What kinds of loans are available? FHA, Conventional, and USDA and VA
What kinds of properties qualify? Single Family, Approved Condos (Fannie Mae), and Planned unit developments (PUDS). Homes priced up to $316,177 in "Targeted Census Areas" (There are 6 qualified Census Tracts in Travis County). Homes priced up to $258,690 in "non-Targeted areas".
Why is this unique? Comparatively generous income and home price limits. Not exclusive to "Targeted" areas. The program offers below market rates, and down payment assistance specifically for borrowers with little or no money down. Money can be reserved by qualified buyers on a first come, first serve basis through the payment of a one-time $350 reserve payment. This is the largest single financing initiative ever offered by TDCHA.
Sources:
Texas Department of Housing and Community Affairs: http://www.tdhca.state.tx.us/ppa/docs/Press_Releases/100521-FTHBProgram77.pdf
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