First Time Homebuyer Assistance Program

Down Payment and Closing Cost Assistance Program for First Time Homebuyers

Begin a lifetime of homeownership through the Texas First Time Homebuyer Program (FTHB). This program allows qualified Texans access to down payment and closing cost assistance. Homebuyers who have not owned a home within the past three years, who meet program income guidelines and who do not exceed the program's purchase price limits are eligible to apply for a loan under the program. 

Program Highlights:

• $10,000 for down payment and/or closing cost assistance
• 0% interest loan
• 5 or 10 year loan term
• First payment will be deferred for 5 years from closing date
• Payment amount $83.33 OR $166.67 monthly, depending on term
• Borrower must be a First Time Homebuyer (excludes qualified Veterans)
• First Time Homebuyer counseling required
• Minimum credit score 640

Borrower Requirements:

• Income: May not exceed 80% area median family income regardless of family size
• Liquid Assets: May not exceed $15,000 (excluding retirement and/or 401K accounts)
• Home Value Limits: Total contracted purchase price of the single family mortgage limits under Section 203(b) of the National Housing Act
• Combined Loan-to-Value: Must not exceed 105%

Eligible Properties:

• New and existing single family homes, townhomes, and condominiums

DEAR JENNY: What are Closing Costs?

There are so many different charges involved in buying a home, it is important to know what to expect at the settlement. Your lender is required to give you a Good Faith Estimate (GFE) of your settlement costs within three business days of your loan application. Once you get it, review the charges below to avoid any surprises when you sit down to close on your loan.

1. Fees to get a mortgage

This includes lender fees and points, as well as a host of other charges involved in obtaining and processing your loan. Points are an upfront charge expressed as a percent of the loan amount (e.g., 1 point is 1 percent of the loan) to increase the lender's effective yield on a loan.

Specific lender fees can include:

• Loan Origination Fee - This is a charge for your lender's work in evaluating and preparing your mortgage loan.
• Application Fee – This charge covers the initial costs of processing your loan application and obtaining your credit report.
• Appraisal Fee – Your lender will need an opinion from an independent appraiser of the market value of the home you wish to purchase.
• Survey – This fee goes to a surveying firm who will verify that your lot has not been encroached upon by any structures since the last survey conducted on the property and to ensure that the home and other structures and legally where the seller says they are.
• Mortgage Insurance – A lender may require this type of insurance for buyers who make a down payment of less than 20 percent of the value of the house. The policy covers the lender's risk in the event the buyer fails to make the loan payments. Premiums are typically paid annually from an escrow or reserve account, or in a lump sum at closing.
• Homeowner's Insurance – Insurance that protects property against loss caused by fire, some natural causes, vandalism, etc., depending on the terms of the policy. Also includes coverage such as personal liability and theft away from home. Your lender will expect you to have a policy in effect by closing.

2. Fees to establish and transfer ownership of the property

Your lending institution is not likely to give you a loan on a house unless you can prove that the seller owns the property you want to buy. This is where title search and title insurance fees come into play. A title agent will verify that the seller is, indeed, the owner of the property and issue a title insurance policy to guard the lender against any errors that could have occurred in the searching process. The cost of the policy is usually based on the loan amount. There may also be attorney, escrow, courier fees and other charges involved in the settlement process.

3. Fees to state and local governments

These fees include transfer, recordation and property taxes collected by local and state governments. Your taxes based on the assessed value of the home, which you pay for community services such as schools, public works, and other costs of local government. Taxes can often be paid as a part of your monthly mortgage payment.

McKinney Grant Program Offers Up to $10,000

The City of McKinney’s Community Services Department is helping first-time homebuyers fulfill their dreams of owning a home. The Homebuyer Assistance Program provides down payment and closing costs assistance up to $10,000 for first-time homebuyers purchasing in McKinney with low to moderate income. Funds are made available through a grant from the Texas Department of Housing and Community Affairs' HOME Investment Partnership Program.

Some requirements of the program include:

• First-time homebuyers. A first-time homebuyer is an individual or household who has not owned a home in the last three years or is a displaced homemaker.

• Proof of U.S. citizenship or permanent legal resident alien status.

• Qualifying for a mortgage loan with a private lender.

• Income that does not exceed 80 percent of the Area Median Income.

• The home purchased through the program will be the principal residence.

• The home must be located within the city limits of McKinney.

• Completion of a HUD and City of McKinney approved homebuyer counseling workshop.

Contact Jenny today for more information or to see if you qualify for this grant program.

NEW YEAR, NEW HOME! Tips for Buying A New Home in 2011

If your New Year's Resolution is to buy a new home this year, then you need to follow these five steps to help you qualify for a mortgage.

The past few years have been rocky times for the real estate industry, and most lenders have tightened their lending standards. Is it still possible for most people to own a home? Absolutely! Mortgage and real estate industries are ever changing, especially in today's economy and era of government compliance, but you can prepare yourself with the right information. And get help from a loan officer who understands the new rules.

Many realtors and home buyers often call me and ask how to qualify for a mortgage. Well, the process has changed drastically over the last 2 years. I have to honestly say I am glad for the change in order to bring stability back to the market. We are now back to common sense lending. Getting a mortgage and borrowing a huge amount of money should not be a one day process. Buying a home should be planned. It is not complicated or difficult. It is simply the right planning with help from an expert. So what should a home buyer plan for? Here are the basics:

1. Take the time to talk to a Licensed Mortgage Loan Officer. A 20-minute consultation will map out a good plan of action to help you purchase a new home. A good loan officer should not take more than 1 day to get back with you.

2. Evaluate your credit with a Loan Officer. All lenders have certain fico score requirements. Although most lenders require a minimum 640 fico score, there are some lenders who will accept a score as low as 580 as long as you have a documented rental history. If your score falls below 580, a good loan officer will offer advice in what you need to do to improve your credit score.

3. Evaluate debt-to-income ratio with a Loan Officer. Most lenders can only accept no more than 50% debt-to-income ratio. This means all minimum monthly payments listed on the credit report plus projected new mortgage payment with PITI (principle, interest, taxes and insurance) should not exceed 45% to 50% of your income. Utility bills are not included.

4. Money for down payment. All FHA loans require minimum 3.5% down payment. The money can be from your savings and checking account, 401K, retirement, gift from relatives, and tax refund. The money should be traceable and documented. A good loan officer will evaluate 2 months of recent bank statements and inform you of any red flags.

5. Ask the Loan Officer about all the costs involved in purchasing a home. In most situations, home buyers should plan to pay for the inspection fee, appraisal fee, and earnest money when making an offer. When it comes to home buying, never under-estimate the power of preparation.

Of course not everyone's situation is the same. Self employed business owners are different than W-2 paid employees. You may have spotless credit. Some people have foreclosures on their credit, and others have bankruptcies. Anyone can qualify for a mortgage but planning a strategy and setting a realistic time frame will be different for everyone, so it is very important to work with an experienced loan officer who can help you plan and guide you through the home buying process.