Down Payment Assistance (DPA) Programs

Texas Professional Mortgage is excited to offer three exemplary Down Payment Assistance Programs to help more buyers purchase the home of their dreams!

 

Features of each DPA program.

 

Program 1 – DPA Forgivable Second Lien:

1. 3%, 4% or 5% of loan amount as a forgivable second lien
2. No purchase price limit
3. Home purchase must be a primary residence anywhere in Texas
4. Do not have to be a first-time home buyer
5. Minimum credit score is 620 for FHA, 640 for conventional
6. Second lien is forgivable at the end of the 3^rd year from the mortgage note date, so must live in the home for 3 years
7. Second lien is silent which means it does not have a monthly payment during the 3 years
8. Excellent income limit
   1. Harris, Fort Bend, Galveston, Liberty, Montgomery, and Waller counties - the annual income limit is $110,750
   2. Income is only based on the borrower’s income
      1. For example - if a married couple applies and exceeds the income limit, we can use only one borrower’s income, if that borrower qualifies without the other borrower’s income
   3. Higher income limit for properties in a Targeted Areas
      1. Harris, Galveston, Montgomery, Liberty, and Waller counties - the income limit is $124,040 if property is in a Targeted Area
      2. There is an address research tool to determine if property is in a Targeted Area
   4. DPA proceeds must be repaid if property is refinanced or sold within the first 3 years of the mortgage note date

Program 2 – Mortgage Credit Certificate (MCC)

1. An MCC reduces the borrower’s federal income tax liability every year by giving the borrower 20% of the mortgage interest paid as a tax credit. Because the tax credit refunds a portion of the mortgage interest, it also effectively reduces the mortgage interest rate.
   2023. Example - borrower pays $10,000 in mortgage interest in 2023. Borrower can then take a tax credit of $2,000 directly against taxes owed. This is a tax credit not a tax deduction! The borrower receives the tax credit each year for as long as borrower lives in the home as a primary residence
2. There is a $500 fee to obtain the MCC
   1. Fee is waived for teachers and first responders
3. MCC can be used in conjunction with the DPA Forgivable Second Lien program
4. MCC is restricted to first time homebuyers (have not owned a primary residence in last 3 years)
5. MCC has purchase price limit of $349,525 for Harris and surrounding counties
6. The purchase price limit is $427,198 if property is in a Target Area
7. MCC uses household income (defined as anyone who will be on the Deed of Trust)
8. MCC income limit is $88,600 in Harris and surrounding counties
9. MCC income limit is $106,320 in Targeted Areas

 

Program 3 – DPA Grant (best deal going when fully funded and funds are available)

1. Currently only available at 2% of sales price (it will be back up to 5% sometime in the future)
2. Second lien is forgivable after 6 monthly mortgage payments
3. Do NOT have to be a first-time home buyer to receive grant
4. No Purchase price restrictions on Grant Program
5. Minimum credit score is 620 for FHA, 640 for conventional
6. Second lien is silent (does not have a monthly payment during the 6 months before being forgiven)
7. Excellent income limit
   1. Harris, Fort Bend, Galveston, Liberty, Montgomery, and Waller counties - the annual income limit is $110,750
   2. Income is only based on the borrower’s income
      1. For example - if a married couple applies and exceeds the income limit, we can use only one borrower’s income, if that borrower qualifies without the other borrower’s income
   3. Higher income limit for properties in a Targeted Areas
      1. Harris, Galveston, Montgomery, Liberty, and Waller counties - the income limit is $124,040 if property is in a Targeted Area
      2. There is an address research tool to determine if property is in a Targeted Area