The Texas Department of Housing and Community Affairs
recently made available a second round of funding for its first-time homebuyer tax credit program under its Texas Mortgage Credit Program.
The state agency just released $45 million of $500 million allocated for the program. The department released $50 million of the funds in May when the program was first implemented.
“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,” said Michael Gerber, executive director of the Texas agency. “Many families want and are ready to take that exciting step toward homeownership."
The Texas Mortgage Tax Program was the state's response to the expiration of the federal tax credit in April 2010, and is the single largest financing initiative for state homebuyers in the 27-year history of the tax program. The program is funded through a bond program, however, no one at the agency was immediately available to provide details concerning funding.
The program is designed to make housing more affordable to low- to middle-income Texas families who have not lived in a home for three years by offering borrowers a tax liability reduction. According to the agency, a borrower can receive a tax credit up to $2,000 annually.
The benefit lasts throughout the life of the loan.
A borrower is required to take a homebuyer education class in order to qualify for the tax break. Homebuyer education is arguably one of the most important steps to homeowner sustainability, according to Marietta Rodriguez, national director for National Homeownership and Lending at NeighborWorks America
"We believe strongly in pre-purchase homebuyer education before a mortgage product is selected," Rodriguez said in an interview, adding that the industry, and especially the government-sponsored enterprises, have shied away from this strategy recently.
"With that action, Fannie and Freddie are sending a message to the industry that counseling doesn't matter and that has strong ramifications on the industry as a whole."
Texans interested in the program must be earning up to 115% of the area median family income. For residents living in specific targeted areas
of the state, such as places impacted by natural disaster, households may earn up to 140% of the average median income in the area and still qualify. In these cases, the first-time homebuyer requirement is waived.
Credit is available through the Federal Housing Administration
, the Department of Veteran Affairs
, the U.S. Department of Agriculture
or one of many participating conventional mortgage lenders
throughout the state.
“The Texas Mortgage Credit Program is another helpful yet responsible tool that TDHCA can offer to qualifying Texas families who are prepared to be homeowners,” said Gerber. “If you are ready to take that step toward homeownership, the state is ready to help you.”
Write to Christine Ricciardi
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