Home Buying Assistance Programs and Tax Credits (tenants, incentive, documents)
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You’re ready to purchase a home and can afford monthly payments, but you find yourself in the situation where you just need some help with the down payment and closing costs – there may be help available now for you.
A program funded by the State and/or City will offer buyers a “gift” or “grant” by giving them the funds for the down payment. These gifts or programs are not available to everyone – only to eligible buyers who must meet certain qualifications.
The overall goal or purpose of these grants is to stimulate real estate transactions by backing up Texans and supporting them with the opportunity to become homeowners from funds made available by the State and/or City government along with donations provided by private companies, foundations or lending institutions.And because it is the mission or goal of the Texas State Housing Department to educate homebuyers on the buying process and the benefits of being a homeowner – these grants include an educational program on becoming a homeowner, managing finances and understanding terms and agreements.
The team at casanuevaguide has done their best to break-down these programs and help you understand how to take advantage of these great incentives for first-time homebuyers. We recommend that you meet with your real estate professional, a home buying counselor or other trusted adviser.
See the bulleted documents below for a break-down of various programs from your local and state government offices.
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City of Houston
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Texas Dept of Housing
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Changes to Homebuyers Tax Credit
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First-Time Home Buyer Credit
See the most recent Combined Income Limits and purchase Price Tables for the entire Texas market effective April 1, 2009 from the Texas First Time Homebuyer Program
Quick Facts and Glossary of Terms from the Texas State Affordable Housing Corp.
To find a home buying education program near you - click here
* The programs were created to provide affordable mortgage loans exclusively for Texas Professional Educators, Texas "Heroes", and low income Texans.
* The definition of a Professional Educator is a public full-time classroom teacher, public full-time paid teacher's aide, public full-time librarian, public full-time counselor, or public full-time school nurse, or effective September 1, 2007, an allied health or professional nursing program faculty member.
* Recent transfer/relocation employees are eligible, there is no residency requirement - except that you reside in Texas and will use the home as your primary residence.
* Any new or existing home in the State of Texas meeting required sales purchase price qualifies - properties do not have to be foreclosed, damaged or distressed in order to qualify.
* Texas Legislature recognizes professionals who have chosen public service as their career and rewards them for their committment and dedication to their job which supports the health and welfare of our State. Some of these positions carry moderate incomes and prohibit these professionals from becoming homeowners.
* Townhomes and Condominiums are eligible (up to four-unit dwellings) providing the homebuyer lives in one of the units.
* Repayment of assistance programs is only required when the homebuyer does not live in the home for at least nine years.
* Texas State Affordable Housing is not a state agency; it was created in 1994 for the sole purpose of providing safe, decent and affordable housing to lower-income Texas.
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Glossary of Terms
Affordable Housing: Housing where the occupant is paying no more than 30 percent (of gross income for gross housing costs, including utility costs. Housing that is for purchase (with or without rehabilitation) qualifies as affordable housing if it (1) is purchased by a low-income, first-time home buyer who will make the housing his or her principal residence; and (2) has a sale price that does not exceed the mortgages limit for type of single family housing for the area under HUD's single family insuring authority under the National Housing Act.
AMFI: Area Median Family Income
Amortization: The process of paying the principal amount of an issue of bonds by periodic payments either directly to bondholders or to a sinking fund for the benefit of bondholders. Payments are usually calculated to include interest in addition to a partial payment of the original principal amount.
Arbitrage: Generally, transactions by which securities are bought and sold in different markets at the same time for the sake of the profit arising from a difference in the two markets. With respect to the issuance of municipal bonds, arbitrage usually refers to the difference between the interest paid on the bonds issued and the interest earned by investing the bond proceeds in other securities. Arbitrage profits are permitted on bond proceeds for various temporary periods after issuance of municipal bonds. Internal Revenue Service regulations govern arbitrage of municipal bond proceeds.
Asset Oversight: Duties performed in conjunction with multifamily bond financed properties. Asset oversight typically entails monitoring aspects relating to the property and periodically reporting that information to the owner of the property as well as other parties that may be involved. Asset oversight duties are primarily restricted to defined physical audits of the property and monitoring the financial covenants and agreements in applicable loan agreements.
Basis Point: A measure of interest rate equal to 0.01% (or .0001). Basis Points are typically used to describe the difference between two interest rate indices or to express the changes in any one index from one point in time to another.
Bond: An instrument which evidences a debt obligation between the Issuer and Investor.
Bond Review Board (Texas): The Bond Review Board's mission is to ensure that debt financing is used prudently to meet Texas' infrastructure needs and other public purposes, to support and enhance the debt issuance and debt management functions of state and local entities, and to administer the state's private activity bond allocation.
Capacity Building: Educational and organizational support assistance to promote the ability of community housing development organizations and nonprofit organizations to maintain, rehabilitate and construct housing for low and very low-income person and families. This activity may include, but is not limited to: 1) Organizational support to cover expenses for training, technical, and other assistance to the board of directors, staff, and members of the non-profit organization or community housing development organization, 2) Program support including technical assistance and training related to housing development, housing management, or other subjects related to the provision of housing or housing services, and 3) Studies and analyses of housing needs.
CDBG: Community Development Block Grant.
CDC: Community Development Corporation.
CDFI: Community Development Financial Institution
CHDO or CHODO: Community Housing Development Organizations.
Colonia: An identifiable unincorporated area located within one hundred and fifty (150) miles of the Texas-Mexico border that lacks infrastructure and decent housing.
Commitment Fee: A fee paid to the Issuer by a lender to secure the right to originate a specific portion of the available program funds. Typically these funds are used by the Issuer to pay all or a portion of the costs of issuance of the issue.
Contract for Deed: A financing arrangement for the sale of property whereby land ownership remains with the seller until the total purchase price is paid.
Cost of Issuance: The cost associated with the issuance of a single family mortgage revenue bond issue or a multifamily revenue bond issue. Costs of issuance typically include Bond Counsel Fees, Financial Advisory Fees, Issuer Counsel Fees, Trustee's Fees, and Trustee's Counsel Fees.
Disability: According to the U.S. Department of Housing and Urban Development, a person shall be considered to have a disability if the person is determined to have a physical, mental, or emotional impairment that: (1) is expected to be of long-continued and indefinite duration, (2) substantially impeded his or her ability to live independently, and (3) is of such a nature that the ability could be improved by more suitable housing conditions. A person shall also be considered to have a disability or he or she has a developmental disability as defined in the Developmental Disabilities Assistance and Bill of Rights Act (42 U.S.C. 6001-6006). The term also includes the surviving member or members or any household described in the first sentence of this paragraph who were living in an assisted unit with the deceased member of the household at the time of his or her death. According to the ICIDH disabilities reflects the consequences of a bodily impairment in terms of functional performance.
Down Payment Assistance: Funds which are provided by the Issuer or another third party which can be used to offset a portion of the borrower's down payment.
Elderly Household: A family in which the head of the household or a spouse is at least sixty-two years of age.
Existing Homeowner: An owner-occupant of residential property who holds legal title to the property and who uses the property as his or her principal residence.
Extremely Low Income: Household Incomes less than or equal to 30 percent of AMFI.
Fair Housing Act: Title VIII of the Federal Civil Rights Act of 1968, as amended in 1988 (the Fair Housing Amendments Act of 1988, 42 U.S.C., section 3601, et. seq).
Family: A household comprised of one or more individuals. (The National Affordable Housing Act (NAHA) definition required to be used in the CHAS rule - equivalent to Census definition of householder (head of household) and one or more other persons living in the same household who are related by birth, marriage or adoption. The term "household" is used in combination with the term "related" in the CHAS instructions, when compatibility with the Census definition of family (for reports and data available from the Census based upon that definition) is dictated.
Federal Housing Administration (FHA): An agency of the Federal Government whose charge is to assist in providing housing for underprivileged citizens.
FHEO: Office of Fair Housing and Equal Opportunity
FHLB: Federal Home Loan Bank
Financial Advisor: An individual or group of individuals who are hired by the Issuer to represent their interests in structuring a single family mortgage revenue bond issue or a multifamily revenue bond issue.
Fire Fighter: Program definition - a paid firefighter working for a fire department of a municipality in the State of Texas. Firefighter includes employees who perform: fire suppression, fire prevention, fire training, fire safety education, fire maintenance, fire communications, fire medical emergency technology, fire photography, fire administration, or fire arson investigation.
First-Time Home Buyer: A first-time homebuyer is an individual or family that has not owned or had ownership interest in any residence during the last three years preceding closing. An exception to this requirement exists only if the home to be purchased is located in a targeted area.
FNMA: Federal National Mortgage Association (Fannie Mae) is one of two private corporations whose charter is authorized and guaranteed by the Federal Government. Their charge is to provide liquidity to mortgage lenders by providing a guaranty to mortgage loans which gives them liquidity in the secondary mortgage markets.
GNMA: Government National Mortgage Association (Ginnie Mae) is a wholly-owned corporate instrumentality of the United States within the Department of Housing and Urban Development (HUD). GNMA is charged with providing a guaranty to mortgage-backed securities which are backed by a pool of mortgage loans insured by FHA, VA, or USRD.
Grant: An award of financial assistance the principal purpose of which is to transfer a thing of value from a Federal/State agency to a recipient to carry out a public purpose.
Guaranteed Investment Agreement/Contract (GIC): An Agreement between a private corporation and the Trustee pursuant to which funds held under the Indenture are invested. Funds invested in a GIC are secured by the full faith and credit of the provider of the Agreement. Since GICs involve a significant portion of the assets of the Indenture, the rating on the bonds is often dependent upon the credit rating of the GIC provider.
HOME: The HOME Investment Partnerships Act, which is Title II of the National Affordable Housing Act.
Household: One or more persons occupying a housing unit (U.S. Census definition). (See also "Family.")
Housing Unit: An occupied or vacant house, apartment, or a single room (SRO Housing) that is intended as separate living quarters (U.S. Census definition).
HTF: Housing Trust fund
HUB: Historically Underutilized Business. A HUB is defined as a business entity that is at least 51 percent owned by an African American, Hispanic, American, Asian-Pacific American, Native American, or a woman of any ethnicity.
HUD: The United States Department of Housing and Urban Development.
Interest Rate: The annual percentage of the principal amount payable for the use of borrowed money.
Issuer: A government instrumentality which is authorized to sell bonds to investors and to obligate themselves or enter into Indentures for the repayment of bonds.
Lender: An intermediary which is authorized to underwrite mortgage loans to either FHA, VA, USRD, FNMA, or FHLMC standards, to fund such mortgage loans, and to sell them to a secondary market source.
LIHTC: (Federal) Low-income Housing Tax Credit administered in Texas by the Texas Department of Housing and Community Affairs.
Local Government: A county; an incorporated municipality; a special district; any other legally constituted political subdivision of the State; a public, nonprofit housing finance corporation created under Chapter 394, Local Government code Texas revised Civil Statues; or a combination of any of the entities described here.
Low Income: Household whose incomes do not exceed 80 percent of the median income for the area, as determined by HUD with adjustments for smaller and larger families, except that HUD may establish income ceilings higher or lower than 80 percent of the median for the area on the basis of HUD's findings that such variations are necessary because of prevailing levels of construction costs or fair market rents, or unusually high or low family incomes. NOTE: HUD income limits are updated annually and are available from local HUD offices for the appropriate jurisdictions.
Moderate Income: Households whose incomes are between 81 percent and 95 percent of the median income for the area, as determined by HUD, with adjustments for smaller or larger families, except that HUD may establish income ceilings higher or lower than 95 percent of the prevailing levels of construction costs or fair market rents, or unusually high of low family incomes. (This definition is unique to the CHAS).
Owner: A household that owns the housing unit it occupies. (U.S. Census definition).
Participating Jurisdiction: Any jurisdiction that has been so designated by HUD in accordance with 92.105.
PHA: Public Housing Agency
Police Officer: Program definition - be a full time paid police officer working for a police department of a municipality in the state of Texas.
Primary Residence: A primary or principal residence is the home in which you intend to live in on a permanent basis.
Professional Educator: For purposes of this program, a professional educator is a teacher, full-time paid teacher’s aide, librarian, school counselor, and school nurse, as defined by Subchapter B., Chapter 21 of the Texas Education Code.
Project-Based (Rental Assistance): Rental Assistance provided for a project, not for a specific tenant. Tenants receiving project-based rental assistance give up the right to that assistance upon moving from the project.
Public Housing: Any state, county, municipality or other government entity or public body (or its agency or instrumentality) that is authorized to engage in or assist in the development or operation of low-income housing.
Revenue Bonds: Bonds payable from a specific source of revenue and which do not pledge the full faith and credit of the Issuer. Revenue bonds do not permit the bondholders to compel taxation or legislative appropriation of funds not pledged for payment of debt service. Pledged revenues may be derived from the operation of the financed project, grants, and excise or other specified non-ad valorem taxes. Generally, no election is required prior to issuance or validation of revenue bonds.
RFP: Request For Proposals
Rural: (Population) Rural is a type-of-area concept rather than a specific area outlined on a map. As defined by the Census Bureau, an urban population comprises all persons living in urbanized areas (UA's) and in places 2,500 or more inhabitants outside UA's. The rural population consists of everyone else. Therefore, a rural classification need not imply farm residence or a sparsely settled area, since a small city or town is rural as long as it is outside a UA and has fewer than 2,500 inhabitants.
SLIHP: State Low Income Housing Plan and Annual Report
Targeted Area: That part of the Eligible Loan Area that has been or may be designated from time to time as a qualified census tract or an area of chronic economic distress in accordance with section 143(j)(3) of the IRS Code or as a qualified census tract in accordance with section 143(i)(2) of the IRS Code. Not all counties have targeted areas.
TDHCA: Texas Department of Housing and Community Affairs
Urban and Rural: (Population) Urban is a type of area concept rather than a specific area outlined on a map. As defined by the Census Bureau, the urban population comprises all persons living in urbanized areas (UAs) and in places of 2,500 or more inhabitants outside UA's. The rural population consists of everyone else.
VA: Veterans' Administration, an agency of the United States of America
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