Special lending programs are available to buyers who seek affordable housing solutions. From Down Payment Assistance programs (grants) to No/Low Down Payment programs offered by both mortgage companies and banks, getting connected with the right lender can open new doors for Buyers who seek to achieve the American Dream of homeownership.
But the lending piece is only part of the puzzle. Loan approval is a 2 part process. The buyer must qualify AND the property must qualify. Property eligibility is often linked to geography, where designated areas (low-to-moderate income census tracts) are incentivized, dating back to the 1977 Community Reinvestment Act (CRA) initiative.
In rural counties, identifying geographic boundaries of eligibility is an easier task than in metropolitan areas, where zip codes are numerous and don't directly correlate to census tracts. As of this writing, there is no known automated method of searching for qualified listings in the Dallas area MLS, as NTREIS data does not include census tract.
So, how does an Agent or Buyer narrow the search to view qualified listings?
The Federal Financial Institutions Examination Council's (FFIEC) Web Site offers a Census and Demographic Data tool, which can be used to look up address level information for a specific property.
To solve for a buyer's search, first start with building in their core specifications, just as you would for any buyer search (bedroom count, bath count, garage count, age of home, desired features, and any geo attributes like distance from work or isd preference). Know going into this, that before a showing is scheduled, either the Buyer or the Buyer's Agent will need to look up the property to determine whether it qualifies as being in a low or moderate income area.
Example and Search Steps:
- To use this tool, paste the property address in the address bar, and then click on the search button.
- Once the property is mapped, click on the "Census Demographic Data" button, and it will display the chart that returns the value for the "Tract Income Level".
- The property needs to be in a "Low" or "Moderate" tract to qualify. "Middle" and "Upper" results should be eliminated from the showing list.
- Verify address eligibility with the Buyer's Lender prior to extending offer interest.
While there other datasets available for download (such as ProximityOne's ZIP Code to Census Tract Equivalence Table) the ability to create a mappable table is lost due to the overlapping elements of census tract to zip-code. Even if built (which would be a very time-consuming process), property eligibility would still need to be independently verified. So for the time being, it is simply more efficient to start with a core search, and then use the available tools to fact-check addresses prior to scheduling a showing.