Considering purchasing a home in Texas but concerned your savings won’t be enough for a hefty down payment? You’re not alone. Many people want to own a home here, but that initial investment can seem like a brick wall. The silver lining? You have more options than you realize.
Let’s go through some options for purchasing a home in Texas without wiping out your entire bank account.
Purchasing a Home in Texas with Minimum Down Payment
The housing market in Texas can be tough, but it does have some wonderful programs and financing arrangements for buyers on a tight budget. If you’re a first-time homebuyer or simply want a new beginning, there are ways to become a homeowner that will not demand a huge check at closing.
FHA Loans: The Traditional Low Down Payment Arrangement
You’ve likely heard of FHA loans. They’re very popular and for a good reason.
What’s the Deal?
FHA loans allow you to purchase a home with a down payment as small as 3.5%. That’s a $250,000 home with a down payment of less than $9,000. Not so bad, right?
Who Qualifies?
These loans are designed for individuals with good credit and consistent income. You don’t require pristine credit, but the higher your credit score, the more likely you are to qualify.
VA Loans: For Veterans and Active Military
Suppose you’re a veteran, good on ya. Second, you’ve got access to one of the better loan programs available.
Why It’s Awesome
VA loans are zero down payment. Yes, zero. And they don’t have private mortgage insurance (PMI), which saves you even more money a month.
Who’s Eligible?
Veterans, active-duty military, and some widowed spouses. It’s worth finding out if you fit the bill.
USDA Loans: Not Just for Farms
You might think that USDA loans are only for purchasing land in the middle of nowhere. But that’s not true.
How It Works
USDA loans provide 100% financing too. No down payment is required. And you don’t have to purchase a barn or relocate to a cow pasture.
Where Can You Use It?
The loans are for houses in eligible rural and suburban locations. You’d be amazed at how many locations in Texas are eligible.
Texas-Specific Assistance Programs
Texas and the Lone Star State have got your back too. There are a number of state and local initiatives that allow Texans to subsidize their initial home.
TSAHC Programs
The Texas State Affordable Housing Corporation (TSAHC) provides grants and second-lien financing to assist in down payments as well as closing costs.
- Home Sweet Texas Home Loan Program
- Homes for Texas Heroes Program (for police officers, teachers, etc.)
You don’t need to pay the grant back. That’s free money, folks.
City and County Support
There are numerous cities in Texas that provide local support. Houston, Dallas, and Austin all have low-to-moderate-income buyer programs. It’s worth contacting your local housing agency or speaking to a mortgage consultant to see what’s available locally.
Conventional Loans with Low-Down Options
Yes, traditional loans are becoming more flexible, too.
3% Down Programs
Some mortgages provide traditional loans with only 3% down. These typically have income or credit requirements but are a good choice for qualified purchasers who don’t wish to get involved with government loan programs.
Conclusion: Buying a Home in Texas Doesn’t Have to Break the Bank
Buying a home in Texas with a low down payment is totally possible. You’ve got choices, from FHA and VA loans to local grants and USDA perks. The key is knowing what fits your situation best. A little research (or help from a mortgage expert) can go a long way.
Ready to make the next move? Look at Stafford Financial’s home financing options and discover how they can assist you in moving into your Texas dream home without the nightmare price tag.
