Texas Mortgage Advantage Program and 90-Day Down Payment Assistance Program For Tax Credit

The Texas Department of Housing and Community Affairs (TDHCA) has two down payment assistance tax credit programs: the Texas Mortgage Advantage Program and the 90-Day Down Payment Assistance Program (DPAP). Each of these programs are short term loan programs.

These two programs are designed to allow first time home buyers in Texas to take early advantage of their $8000 tax credit authorized by the Bush Administration and further enhanced by the Obama Administration with the Obama Economic Stimulus Plan. Both of these programs are available in Texas through November 30, 2009 when the federal tax credit ends under current federal legislation.

Specifics of the Texas 90-Day Down Payment Assistance Program

• The program is only available to first time home buyers.


• The program is available from TDHCA approved and participating lenders when using a lender specific mortgage program like FHA, VA, USDA Rural Development, Fannie Mae and Freddie Mac Conventional mortgages.


• The loan program can be up to 5% of the first lien mortgage amount up to a maximum of $7,000 for down payment and/or closing costs.


• Homebuyers are required to complete a TDHCA approved pre-purchase homebuyer education course.


• Homebuyers must be eligible to claim the federal first time homebuyer tax credit.


• The 90-Day DPAP offers 0% interest and no payments for 90 days


• Failure to repay the down payment assistance loan in full within 90 days will result in monthly payments of principal and interest for two (2) years with an interest rate of 10%. If a homebuyer borrows $7,000 they would have a second mortgage payment of approximately $323 per month for two years until the loan is paid in full.


• Income limits for single taxpayers of $75,000 and $150,000 for married taxpayers filing a joint return apply just exactly as they apply for the federal tax credit.

Specifics of the Texas Mortgage Advantage Program

• The program is only available in conjunction with TDHCA’s existing Texas First Time Homebuyer or Texas Mortgage Credit (MCC) Programs. See: Down Payment Assistance Programs In Texas


• Borrowers can get up to 5% of the first lien mortgage amount up to a maximum of $6,000 for down payment and/or closing costs.


• Homebuyers must meet the First Time Homebuyer or Mortgage Credit (MCC) Program guidelines.


• The tax credit must be repaid to IRS if the borrower sells or moves from the home within three years.


• Each homebuyer is required to complete a pre-purchase homebuyer education course.


• Homebuyers must be eligible to claim the federal first time homebuyer tax credit.


• The MAP offers 0% interest for 120 days.


• Failure to repay the down payment assistance loan in full within 120 days will result in monthly payments of principal and interest for five (5) years with an interest rate of 7%. Using this scenario, a homebuyer borrowing the maximum of $6,000 would have a second lien note of approximately $119 per month.


• Applicable income limits for the Texas First Time Homebuyer or Texas Mortgage Credit Programs.

To visit the TDHCA website visit: Housing Authority - Housing Agency State by State Lisings For Home Buyers.