Having their own home; a place where the family members can be themselves without any inhibitions, is every family’s dream. That said, getting approved for a home loan in Texas or any other part of the U.S. can prove to be an uphill task for borrowers with financial difficulties such as an unhealthy credit score, income limitations, and past credit problems. This is where mortgage assistance programs come into picture. From low interest rates to relaxed qualifying norms, these programs come with various benefits and are designed to help borrowers with financial problems. The state of Texas, specially has quite a few mortgage assistance programs that have helped several families realize their dream of owning a house. In this post, we take a look at some mortgage assistance programs in Texas. Read on.
1. VA Loans
Available to veterans, active duty and reserve members of the armed forces and surviving spouses of veterans killed on active duty, VA loans come with a number of benefits such as lower interest rates, zero down payment, and zero private mortgage insurance premium. VA loans are backed by the Department of Veteran Affairs and provided by private lenders such as banks and mortgage companies. VA loans can be broadly classified into three categories: purchase loans, interest rate reduction refinance loans, and cash-out refinance loans. Eligibility depends on various criteria such as the borrower’s military service, credit score, and income.
2. FHA Home Loans
Administered by the U.S. Department of Housing and Urban Development, FHA home loans are one of the most popular programs among first time homebuyers who have very little savings. The program has relaxed eligibility criteria such as low down payment ( 3.5 percent of the purchase price), flexible debt to income ratios, and relaxed credit score requirements. The closing costs, too, are lower as compared to other programs. Borrowers, however, have to pay mortgage insurance premiums, which hedges the lender against the losses that may arise if the borrower defaults.
3. USDA Mortgage Loan
USDA mortgage loan is one of the newest kids on the block of mortgage assistance programs. Backed by the United States Department of Agriculture, these loans are provided to rural property buyers and owners. These loans do not require any down payment, and borrowers can roll the closing costs into the loan. The program is designed to help homebuyers from the lower income group and places a restriction on the income limits of the borrower (which cannot exceed 115 percent of the median income for the area). Borrowers must also not have any adequate housing and should be financially sound to afford the payments.
These are some of the most popular mortgage assistance programs in Texas. A couple of other mortgage assistance programs worth your consideration are: SETH, and Texas Mortgage Credit Certificate Program. Discuss these programs with your lender and request them to suggest the program with the best home loan rates in Texas.