(Bond Program 74)

The Texas Department of Housing and Community Affairs (TDHCA) recently released a new First Time Homebuyer Program (Bond Program 74) that offers a 10-year deferred forgivable 2nd lien for down payment and closing cost assistance. The amount of assistance is up to 4% of the 1st lien mortgage amount. The 30-year first lien fixed interest rate is a competitive 6.25%.

Borrowers will not be required to make monthly payments on the 2nd lien deferred forgivable loan; however, if they sell, refinance, transfer or otherwise dispose of or cease to occupy the residence within the 10-year period after the residence is purchased, the borrower will be responsible for the repayment of the full amount of the assistance that has not been forgiven.

There are income limits and you will need to have decent credit. Visit http://www.tdhca.state.tx.us/homeownership/fthb/available_funds.htm for more information.

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H.R. 6694 will reinstate FHA seller down payment assistance for persons with certain credit scores by establishing three classes of eligible borrowers:

- Those with FICO scores above 679 will be allowed FHA seller down payments under current HUD guidelines.

- Those with FICO scores of 620 through 679 will pay a risk-based mortgage insurance premium to cover their possible defaults in the amount of 3.0% of the original principal for a single premium AND 1.25% of the principal balance as an annual premium.

- Those with FICO scores of less than 620 who may be deemed as eligible by HUD for FHA seller down payments will be subject to HUD-established risk-based pricing.

H.R. 6694 will also create an on-time payment incentive based upon a refund of premiums paid in excess of normal premiums if the borrower makes on-time payments for a specific number of years and pays the mortgage obligation in full. If these requirements are met, the borrower will receive a refund in the amount of the difference between the amount normally paid and the amount actually paid.