FAQ for Homes for Texas Heroes / Texas Professional Educator Programs
UPDATE: This down payment assistance (DPA) program is out of funds and was last checked Friday September 22nd. This information is accurate as of that date. Please call our office at our contact page for more information on the 100% financing and first time home buyer tax credit programs available in your area.
Who is eligible for the programs?
The programs were created to provide affordable mortgage loans exclusively for Texas Professional Educators and Texas “Heroes”
The definition of a Professional Educator is a public full-time classroom teacher, public full-time paid teacher’s aide, public full-time librarian, public full-time counselor, or public full-time school nurse, or effective September 1, 2007, an allied health or professional nursing program faculty member .
For detailed definitions of “Heroes”, please click here.
What is the definition of a first time home buyer?
For purposes of this program, a first-time home buyer is an individual or family that has not owned or had an ownership interest in any residence during the last three years. An exception to this requirement exists if the home to be purchased is in a targeted area.
I just moved to Texas two months ago. Will I qualify for this program?
Yes, there is no residency requirement under this program, except that you currently reside in the state of Texas, and the home you are purchasing is intended as your principal residence.
What is meant by primary, or principal, residence?
The primary residence is the home in which you intend to live on a permanent basis.
I’ve heard that only homes in economically distressed areas qualify under these state programs. Is that true?
The property does not have to be in an economically distressed area (targeted area). Any new or existing home in the state of Texas that does not exceed the maximum purchase price limits is eligible. However, maximum home purchase price limits are higher if the home is purchased in a targeted area, including some rural areas. Your lender can help you determine if you and your home qualify.
How do I apply for one of the first-time home buyer programs?
Eligible borrowers need to contact our office at our contact page or you may Apply Online and we can assist with the application and qualifying process.
Why are some programs limited to specific professionals?
The Texas Legislature recognizes that people working in these professions are often paid public service salaries that could present a barrier to owning a home in their communities. These programs are designed to reward these individuals for their dedication and commitment to jobs that are necessary to the health, welfare, and future of our state, as well as provide incentives to them so that they will be able to continue in these professions.
Are town homes or condominiums eligible?
Town homes and condominiums are eligible (up to four-unit dwellings) as long as the buyer resides in one of the units.
Can I buy a second home using this financing?
No, this program is restricted to those persons who have not owned a home in the past three years. Additionally, to qualify for purchase under this program, the home must be your primary residence. Therefore, vacation homes would not qualify under this program.
Do I have to pay back any portion of the assistance provided by one of the first-time home buyer programs?
The only time you might have to pay back a portion of the assistance, would be if you sell the home within nine years of buying the home. This is called recapture tax.
Recapture tax is owed only when ALL three of the following events occur:
- You sell your home within nine years,
- Earning significantly more income than when you bought the home, and
- Have a gain from the sale of your home.
Recapture tax is a federal tax that a borrower may be required to pay from the net profit they receive from the sale of their home. If they have to pay recapture tax, it would be due when they file their federal income tax for the year in which they sell their home. The maximum recapture tax is 6.25% of the original principal balance of the loan or 50% of the gain on the sale of the home, whichever is less.
The Texas Homes for Heroes and Texas Professional Educator programs are available exclusively through Select Mortgage Banks as determined by TSAHC and we are pleased to be able to offer these programs statewide to you. To get pre-qualified for the Homes for Texas Heroes Program simply Call our office at our contact page or you may Apply Online. The above is not a comprehensive list of requirements feel free to our contact page with additional questions. Don’t Forget our Home Buyer University Classes will better prepare you for these special Programs for our Heroes & Educators.
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