There are two different programs that allow first time Texas home buyers to “monetize” the 8000 tax credit from the Federal Government. The first one is called the Texas 90-Day Down Payment Assistance Program and the other is called the Texas Mortgage Advantage Program.
Each of these programs are short term loan programs designed to help people take advantage and monetize the 8000 tax credit.
Highlights of the Texas Mortgage Advantage Program:
- The program is only available in conjunction with TDHCA’s existing Texas First Time Homebuyer or Texas Mortgage Credit (MCC) Programs.
- Eligible participants can get up to 5% of the amount of the first mortgage up to a maximum of $6,000 for down payment and/or closing costs.
- Home buyers must meet the Mortgage Credit Program or First Time Home buyer guidelines.
- The tax credit must be repaid to IRS if the borrower sells or moves from the home within three years.
- Any/all borrowers are required to complete a pre-purchase home buyer education course.
- Borrowers must be eligible to claim the federal first time home buyer tax credit.
- The Mortgage Advantage Program offers 0% interest for 120 days.
- Failure to repay the down payment assistance loan in full within 120 days will result in monthly payments of principal and interest for five (5) years with an interest rate of 7%. Using this scenario, a home buyer borrowing the maximum of $6,000 would have a second lien note of approximately $119 per month.
Both the Texas Down Payment Assistance Program and the Texas Mortgage Advantage programs are designed to help eligible first time home buyers in Texas “monetize” their 8000 tax credit – and as long as you are working with an FHA approved lender, your lender should be able to answer any questions you have about the programs.
