First Time Homebuyer Requirements in Texas

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Texas offers down payment assistance, low interest loans and mortgage income tax credits to eligible first-time homebuyers. Through participating lenders, first-time homebuyers who meet income, residency and credit requirements can purchase a qualifying property in the state.


The State Affordable Housing Corporation offers down payment assistance programs to low-income residents and first-time homebuyers through the Texas Hero Borrower and Home Sweet Texas programs. Additionally, the state Department of Housing and Community Affairs offers a similar program called My First Texas Home. Both organizations administer the state's Taxable Mortgage Credit Certificate Program which gives eligible first-time homebuyers a yearly federal income tax credit on up to $2,000 of their mortgage interest payments.


First-time homebuyers are defined as residents of Texas who have never owned a home or who have not owned a home in the past three years. This criteria may be lifted if the buyer purchases a home in a targeted area. Targeted communities are defined as areas of chronic economic distress and may have less stringent criteria for the buyer to meet.


First-time homebuyers must meet income eligibility requirements to qualify for mortgage down payment assistance. Income limits range from 80 to 115 percent of the area median family income depending on the size of the buyer's family. Income limits vary based on the county in which the property is located and are set higher in targeted areas. Higher income limits are also set for Texas Hero borrowers who include first responders, professional public educators and veterans.


While there are no specific time requirements to become eligible for each first-time homebuyer program, the buyer must currently live in Texas and intend to make the property his primary residence. Property eligible for the My First Texas Home includes single-family and manufactured homes and condominiums. Duplex properties are also eligible as long as the property was first occupied as a residence five years prior to the closing date and the borrower intends to make one unit his primary residence.


Borrowers must choose from participating lenders, meet certain underwriting criteria and pay specified lender fees. Buyers must have a credit score of 580 to participate in the Mortgage Credit Certificate program and a credit score of at least 640 to participate in the down payment assistance program, as of 2013.


As part of the qualifying process, first-time homebuyers must complete a homebuyer education course with an approved educator in their area or online