November 5, 2010
Gordon Anderson (512) 475-4743
State housing agency offers lowest homebuyer interest rates in program history
Rates at 4.20% for unassisted loans, 4.95% for assisted loans with up to 5% of mortgage amount for down payment, closing cost assistance
(AUSTIN) — The Texas Department of Housing and Community Affairs (TDHCA) today announced that it has reduced interest rates on mortgage loans offered through its Texas First Time Homebuyer Program to historically low levels, further opening the door to safe and responsible homeownership for qualifying low to moderate income Texans.
Interest rates on these 30-year, fixed rate mortgage loans have been set at either 4.20 percent or 4.95 percent, depending on which of two types of loans the borrower selects. Rates had previously been set at 4.99 percent or 5.74 percent, respectively. The assisted rate of 4.95 percent is available with funds for down payment and closing cost assistance, helping families overcome what are often the biggest obstacles to buying a home.
“TDHCA is extremely excited to be making what has always been a terrific offer for potential homebuyers even better,” said TDHCA Executive Director Michael Gerber. “Our partners in the Texas real estate and mortgage finance industries are a critical part of our success, helping raise awareness of this safe, reliable lending product. It is our hope that these historically low interest rates will allow more Texans to achieve the American Dream of homeownership.”
“Texas REALTORS® and the real estate community are extremely proud to work together with TDHCA and help market this truly wonderful program,” said Bill Jones, Chairman of the Board for the Texas Association of REALTORS®. “These low interest rates are sure to help thousands of families across the state buy their first home, and I urge all Texans ready to take this important step to contact a Texas REALTOR® and take advantage of this opportunity.”
Available funds are part of an unprecedented $500 million in mortgage revenue bond authority TDHCA announced last May, the single largest financing initiative for state homebuyer funds in the 27-year history of the program. Approximately $100 million in mortgage loan reservations have been made to date, and interest rates are typically reset on a monthly basis as market rates adjust.
Gerber explained that Texas First Time Homebuyer Program offers two types of loans at two different interest rates: assisted loans, which will feature the higher 4.95 percent rate but also offer down payment and closing cost assistance up to 5 percent of the mortgage amount in the form of a 30-year repayable second lien; and unassisted loans, at the lower 4.20 percent rate but with no additional assistance.
No monthly payments are due on the down payment portion of the assisted loan, he noted, and therefore will not be required to be included in the borrower’s debt-to-income-ratios. However, the loan is due and payable upon sale, refinance, or payoff of the original mortgage loan.
TDHCA’s First Time Homebuyer Program offers qualifying households who have not owned a home in the previous three years an opportunity to obtain reliable mortgage loans.
Eligible households can earn up to 115 percent of the area median family income, depending on the number of individuals living in the home, as long as all other program requirements are met.
Loans are available through the program’s network of over 55 participating lending institutions with more than 300 branches located throughout the state. Applicants must qualify under FHA, RHS, VA, Fannie Mae, or Freddie Mac guidelines.
Texans wanting additional information are encouraged to visit the Texas First Time Homebuyer Program Web site at www.myfirsttexashome.com or call 1-(800) 792-1119 to learn more about income and eligibility requirements, loan guidelines, or to find the nearest participating lender.
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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