Get a 0% loan for your down payment and closing costs as a first-time home buyer in this town
This city makes buying a home easy for first-time home buyers. Check out the details of this 0% loan.
Buying a home is a big decision, and it’s an investment that costs a lot of money. For this reason, many people put off taking out a mortgage and buying a home until they feel better financially. If you are looking to buy a home and are ready to relocate to a new area, you might want to take a look at the city of Austin, Texas. There, first-time home buyers can take out a 0% loan to cover their down payment and closing costs. Read on to learn more about this first-time home buying opportunity.
Living in Austin has its advantages
Austin, Texas is on the list of the ten most affordable cities in the United States. Residents have a higher median household income and a lower cost of living than residents of most other cities.
Austin is always looking to attract more residents and buyers. Unfortunately, closing costs and down payments can lead to a large amount needed to cover the costs of buying a home. Some people continue to rent because they feel they don’t have enough money saved for a down payment. To help, the City created the Down Payment Assistance Program (PAD) to help new home buyers realize their dream of owning a home.
Taking advantage of this loan opportunity is a great way to make life in Texas as a first-time home owner even more affordable.
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How the program works
This program offers 0% interest loans to first-time home buyers. Loans can be used to cover closing costs, down payments and prepaid expenses associated with buying a home.
Home buyers may qualify for assistance of up to $ 40,000, depending on the type of loan chosen. A standard PAD loan will grant up to $ 14,999 with 0% forgivable interest. A shared equity PAD is a 0% interest rate loan of up to $ 40,000 with shared equity. The actual loan amount is based on the proven financial need of the borrower.
How does the loan forgiveness work?
- Standard PAD Loan: The loan is canceled after five years. If the house is sold, refinanced, vacated, rented, or if title is transferred before the end of those five years, the loan will have to be repaid after the sale or transfer.
- Shared PAD Loan: The loan is canceled after 10 years. Shared equity remains and is forgiven after 30 years. If the house is sold, refinanced, vacated, rented or if title is transferred before the end of those 10 years, the loan will have to be repaid after the sale or transfer. In addition, a percentage of equity earned that is equal to NHCD’s share percentage of the original sale price will be added to the redemption balance.
Who is eligible?
First-time home buyers must meet the following eligibility criteria:
- Must not have owned a home in the past three years or been moved as a result of a divorce
- Must purchase single family home or condominium through Austin Jurisdictions web map
- The sale and appraisal price of the home must not exceed $ 280,000
- Must complete HousingSmarts program or other comparable homebuyer training course
- Must be approved for a mortgage from a participating lender
- Must have a family income less than or equal to 80% of the median family income of the Austin area (MFI)
- Must make a minimum contribution of $ 1000 in real money
If you are interested in Austin’s down payment assistance program, you can complete a program application package. If you want to buy a home but feel like homeownership is out of reach because you don’t have the funds to pay closing costs and a down payment, this type of program might be for you. suit.