The First Time Buyer Tax Credit Advance Loan from The State of Texas (NOMORE)

Good Morning Everyone - I have a bit of bad news,

I wanted everyone to know the Texas Dept of Housing and Community Affairs has stopped the "Tax Credit Advance" loans.  When I issued your pre-approvals it was subject to a 2nd lien from the State of Texas for your down-payment.  At this time, that is not possible.  We can still use a GIFT from a family member for the 3.5% down-payment or you can use your own verified funds.  The $8,000 Federal Tax Credit is not going away, but for now in Texas you will not get it until after closing and are unable to use it for down-payment. 
 
Anyone that has already received a commitment of funds from TDHCA.  That would mean you have an executed contract, your FHA first lien has already been approved by underwriting and the TDHCA as received your $250 cashiers check and original application. 
 
Below is the email we received from the TDHCA late yesterday:

June 22, 2009, the Texas Department of Housing and Community Affairs (TDHCA) launched the 90-Day Down Payment Assistance and Mortgage Advantage Programs.  These programs were designed to allow potential homebuyers to take advantage of the federal first time homebuyer tax credit created under the American Recovery and Reinvestment Act of 2009 and passed by Congress.   To date, we have received approximately 700 loan files under these two very popular programs.  Loan closings have occurred on many of them but there are many additional ones yet to be processed.  In order to ensure there is sufficient staff capacity, funding and time to process the remaining inventory of files, effective Wednesday, TDHCA will no longer be accepting loan application packages (Exhibit A & C) under either of these programs.  It will be our goal to issue commitments, process and close all existing loan files received by this date prior to the expiration of the federal first time homebuyer tax credit. 

We encourage you to share this announcement with all of your branch offices, loan officers, and Realtor/Builder partners.

Although we will no longer be able to offer these two programs, TDHCA recently released to its network of participating lenders approximately $81 million through its Texas First Time Homebuyer Program.  This program is funded through the sale of mortgage revenue bonds and offers a competitive interest rate of 6.25% as well as down payment assistance up to 4% of the mortgage amount in the form of a 10-year deferred forgivable 2^nd lien.  The down payment assistance is available to borrowers earning up to 100% of the area median family income (1 or 2 persons) or 115% (3 or more persons).  For those borrowers purchasing homes in economically distressed targeted areas or federally declared disaster areas, the income limits increase to 120% or 140% based on family size. If purchasing a home prior to 12/1/09, eligible first time homebuyers may also apply for and receive the federal first time homebuyer tax credit. The 90-Day Down Payment Assistance and Mortgage Advantage Programs have helped many Texans achieve the dream of homeownership and we want to thank you, our lender partners for helping to make this happen.

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