January 14, 2011
Gordon Anderson (512) 475-4743
State housing agency making $45 million available through innovative first time homebuyer program
(AUSTIN) — The Texas Department of Housing and Community Affairs (TDHCA) this week released $45 million in mortgage credit certificate authority through its Texas Mortgage Credit Certificate Program, an innovative homebuyer program that makes homeownership more affordable by providing a dollar for dollar reduction of a borrower’s tax liability, not to exceed $2,000 annually.
The credit authority will allow the Department to provide tax credits on approximately $150 million worth of mortgage loans, which it estimates will help approximately 1,000 eligible households purchase a home of their own once they complete a certified homebuyer education class.
According to Michael Gerber, TDHCA Executive Director, the program will help the state respond to a remarkably robust demand for affordable homebuyer products.
“Despite all the negatives we hear from other states, the fact is that the Texas economy – and the demand for homeownership – both remain quite healthy,” Gerber said. “Many families want and are ready to take that exciting step toward homeownership, and TDHCA wants to help them achieve their dreams through safe, reliable homebuyer lending products offered through the state, coupled with responsible homebuyer education.”
Gerber also pointed out that the Texas Mortgage Credit Certificate Program will help create new construction and remodeling jobs, generate an influx of wages and salaries into local economies, and increase the local tax base. “This is a significant and very attractive opportunity we hope that no eligible Texan passes up.”
“We’ve worked with TDHCA since 2004 to promote affordable and sustainable paths to homeownership in Texas,” said Dwight Hale, Chairman of the Board, Texas Association of REALTORS®. “TDHCA’s MCC program represents one of those viable paths for Texans, which we wholeheartedly endorse.”
The program targets individuals and families buying their first home or who have not owned a home in the previous three years. Credits are available in conjunction with FHA, VA, USDA, or conventional mortgage loans through a statewide network of participating banks and mortgage companies who have agreed to participate with TDHCA in these initiatives.
Homebuyers earning up to 115 percent of the area median family income are eligible to deduct 30 percent of the annual interest paid on their mortgage loan up to the maximum amount of $2,000 per year. The $2,000 is then deducted from the borrower’s annual tax liability, and the benefit lasts for the entire life of the mortgage loan .
For residents living in specific targeted areas of the state, such as those impacted by natural disaster, households may earn up to 140 percent of the median family income and still be eligible to participate, and the first time homebuyer requirement is waived.
The first time homebuyer status requirement is also waived for qualifying veterans of the nation’s armed forces. However, veterans must have received an honorable discharge as evidenced by form DD-214 to be eligible to participate in this homebuyer program. All other program requirements must still be met.
“The Texas Mortgage Credit Certificate Program is another helpful yet responsible tool that TDHCA can offer to qualifying Texas families who are prepared to be homeowners,” Gerber said. “This is a terrific program, and we are excited to make it available to our fellow Texans. If you are ready to take that step toward homeownership, the state is ready to help you.”
As Texas’ lead agency for promoting homeownership, TDHCA helps transform the lives of the individuals who participate in its programs. TDHCA’s homebuyer programs each year help thousands of low to moderate income Texans achieve their homeownership goals, while educating them about the risks and responsibilities that accompany those rewards.
To further this aspect of TDHCA’s mission, the Department also sponsors the Texas Statewide Homebuyer Education Program (TSHEP), a statewide program designed to provide information and counseling to prospective homebuyers about the home buying process from both a pre- and post-purchase perspective. Classes are offered by local governments and nonprofit organizations collectively serving all 254 Texas counties. Participants in the Texas Mortgage Credit Certificate Program must successfully complete a class to receive the credit.
For more information on the Texas Mortgage Credit Certificate Program, how to qualify for a credit, or to locate the nearest participating lender or homebuyer education provider, please call TDHCA’s Texas Homeownership Division at (800) 792-1119 or visit the program’s website at www.myfirsttexashome.com.
About the Texas Department of Housing and Community Affairs
The Texas Department of Housing and Community Affairs administers a number of state and federal programs through for-profit, nonprofit, and local government partnerships to strengthen communities through affordable housing development, homeownership opportunities, weatherization, and community-based services for Texans in need.
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