Texas Department of Housing & Community Affairs - Building Homes and Strengthening Communities

TDHCA Press Room

CFD Conversions: Closer to home

If you’ve ever heard the term Contract for Deed (PDF) (“CFD”) but never understood exactly what it meant, here’s the story:

Under a CFD, a seller will provide a buyer with the financing to purchase a piece of property, and the buyer repays the loan in installments. Unlike a traditional deed of trust, however, the seller retains legal title to the property until the final installment is paid.

In other words, the buyer, doesn’t own the property until it’s fully paid for – meaning it could be years before the buyer can enjoy the benefits of homeownership.

It’s also a situation ripe for abuse, but for many residents living in the state’s colonias – substandard neighborhoods often burdened by poor housing and infrastructure – it may be their only chance to buy or build a home.

So, what’s the solution?

TDHCA’s Contract for Deed Conversion Program (“CFDC”) supports eligible nonprofits, local governments and public housing authorities helping qualifying households convert CFDs to traditional mortgages and attain homeownership.

When funds are available, assistance comes in the form of a 0%, deferred, forgivable loan not to exceed $90,000 per home.

The buyer’s income cannot exceed 60% area median family income and the property must be located in a colonia that meets specific state guidelines.

Assistance may include reconstruction or new construction of site-built housing, the replacement of an existing manufactured housing unit with a new unit, or the rehabilitation of an existing colonia home.

For additional information on CFDC Assistance Grants, please contact the Housing Trust Fund Division at htf@tdhca.state.tx.us or 512-936-7800.

 

News Releases

News releases are developed by the Communications and Marketing section of the Division of Policy and Public Affairs to publicize TDHCA program activities. These include application funding cycles, program grant awards, special events, board activities, and other relevant information.

Date Headline
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