Loan Assistance Programs

TDHCA Texas First Time Homebuyer Program (Bond 77 Program)

Effective May 2010, the Texas Department of Housing and Community Affairs (TDHCA) announced the release of $500 million in funding for first time homebuyers. The program is designed to assist low to moderate income homebuyers who are interested in purchasing their first home. Two types of mortgage loans are available.

“Assisted loans” are 1st line mortgage loans made available at a an interest rate slightly above the current market interest rate and provide down payment and closing cost assistance. The amount of down payment and closing cost assistance is 5% of the mortgage amount and is available in the form of a 2nd lien, 30-year, 0% interest loan.

Although no monthly payments are required, the amount of assistance is due and payable in full upon sale, refinance or repayment of the 1st lien mortgage. Assisted loans are available to borrowers earning up to 115% of the area median family income (depending on family size) and up to 140% of the area median family income (depending on family size) if purchasing in a targeted area.

“Unassisted loans” are available at an interest rate slightly below the current market interest rate and do not include funds for down payment and closing cost assistance.

All 1st line mortgage loans are available at a 30-year fixed rate. The interest rates offered under the program will change periodically depending on the industry market rates at the time the loan is registered. Homebuyer Education is required for all borrowers receiving a loan through the Texas First Time Homebuyer Program.  This requirement may be met by attending a pre-purchase homebuyer education counseling course provided through the Department’s network of certified Texas Statewide Homebuyer Education Providers, or on-line counseling offered through the program’s participating lender network.


 Texas Mortgage Credit Program (MCC)

A Mortgage Credit Certificate allows the homebuyer to claim a tax credit for some portion of the mortgage interest paid per year. It is a dollar for dollar reduction against their federal tax liability.

The program is open to those individuals and families who:

  • Meet income and home purchase requirements;
  • Have not owned a home as primary residence in the past three (3) years;
  • Meet the qualifying requirements of the mortgage loan;
  • Will use the home as their principal/primary residence.

All mortgage loan types are eligible. The mortgage loan, available through a network of participating lenders, must be underwritten according to FHA, VA, USDA or conventional loan criteria and will be at prevailing market rates. New and existing single family homes, townhouses, condominiums and manufactured housing (with certain restrictions) are eligible properties. Purchase price and income limits, adjusted by household size apply. The homebuyer must also occupy the property as their principal residence.