If you’re thinking about buying an Austin home, you might be wondering if there’s any way to save a little money during the process. There are several programs available through the state and through the City of Austin. Austin’s Neighborhood Housing and Community Development office has two programs designed to lessen the initial investment for first-time buyers who qualify. One of them is standard down payment assistance and the other is a shared equity program.
How to Qualify
Those interested in the program must meet certain income and asset limit requirements determined by household size. The Austin property for sale must be within the Austin City Limits and pass Housing Quality Standards and lead inspections. Candidates must take free Housing Smarts classes, which help first-time buyers understand the necessities of successful home ownership. Those recently displaced by divorce or who haven’t owned a house in three years may also qualify. After completing the course, the candidate must be approved for a loan through a mortgage lender participating in the Down Payment Assistance Program (DPA). The lender will submit a DPA application for qualified buyers, which must be received within 12 months of the candidate completing Housing Smarts classes. When all requirements are met, applicants may receive up to $100,000 or $40,000 in down payments and home purchase closing costs.
• Standard – Participants in the Standard DPA program can receive up to $10,000 in a 0 percent interest loan for up to 10 years. The loan doesn’t have to be paid back if the Austin homebuyer stays on the title and in the house for 10 years without selling, leasing refinancing or taking out a home equity loan. Otherwise, the loan must be paid back.
• Shared – The Shared Equity DPA program offers a 30-year 0-percent loan of up to $40,000. Borrowers must pay back the DPA loan, as well as a portion of the home’s equity according to program guidelines. When the Austin house is eventually sold, the Austin Housing Finance Corporation (AHFC) has the right of first refusal on the home’s purchase.
For more information about the Austin DPA and other programs, visit the Neighborhood Housing and Community Development portion on the City of Austin’s website.