For low- to moderate-income renters in Texas, the prospect of buying a house may seem out of the question.
However, there are programs available for first-time homebuyers that can assist with financing, down payments and closing costs, making buying a house an affordable option.
Vanya Griffith-Mayes, branch manager of Starkey Mortgage in Sherman, said the two big programs in the state come out of the Texas Department of Housing and Community Affairs and the Texas State Affordable Housing Corp. Programs through these agencies can assist buyers with down payments, closing costs and provide access to fixed-rate mortgage financing.
“Both of those programs are designed for low- to moderate-income households, and they offer down payment assistance, and also mortgage credit certificate,” Griffith-Mayes said. “And you can use up to 3, 4, 5 percent down payment assistance grants depending upon the sale price. They can help pay closing costs or the down payment, and combined with seller’s assistance, it can literally buy a home with very little money out of their pocket.”
A mortgage credit certificate gives buyers up to a $2,000 tax credit year after year for the 30 years they have the mortgage and the home, Griffith-Mayes said. So that can also help the lender qualify the buyers for a little bit more of mortgage than what they may normally qualify for. With the tax credit, the interest rate is also reduced.
Debbie Hudnall, a real estate agent with Virginia Cook Realtors in Sherman, said the first step the buyers should take to see if they can qualify is to talk with a local lender. A local lender will typically be more knowledgeable of other local options as well, she said.
“I think the most important thing is to get with a local agent or a local lender, and for us to direct them to the right people to see what program might fit them to help them get into a home and not have to break the bank,” Hudnall said. “… A lot of young kids, they don’t realize what they’re paying in rent, they could actually buy a home and their payment would be less than that.”
As rent can add up over the years, buying a house redirects money used to pay rent. By purchasing a house, residents could invest in their own property and build equity instead of paying for the landlord’s mortgage, Hudnall said.
“You know let’s say they rented for five years, they nearly paid $20,000 on something that someone else owns instead of a $20,000 investment into a home that’s yours,” Hudnall said. “Because you’re just paying that mortgage down versus paying a landlord’s mortgage.”
Griffith-Mayes said people hold a misconception that they need a large down payment in order to purchase a home. However, with these programs, and other similar programs, a large down payment isn’t needed. And it’s not too hard to qualify.
“They’re programs designed to help first-time homebuyers with moderate income to buy houses,” Griffith-Mayes said. “And it’s a lot cheaper to buy a house than it is to rent a house these days.”
To qualify for these programs, Griffith-Mayes said the buyers need a minimum credit score of 620, however, she noted they work with credit-challenged borrowers to help them meet the minimum credit scores. The programs are also income restricted so buyers can make too much money to qualify. The income qualifications depend on the program and on factors like the household size, but it can range anywhere from $60,000 to $75,000, she said. The best way to find out if a buyer qualifies would be to talk with a lender.
“The best way would be to apply for a mortgage because then we can look at their income, we can look at their credit, we can see if they can qualify based on income and credit — which one of those programs would be better for them,” Griffith-Mayes said.
