Are you a first-time homebuyer looking for assistance in purchasing a home in Plano, Texas? The Plano First Time Homebuyers Assistance and Educational Program (FTHB) may be able to help. Funded by HUD, the program offers down payment and closing costs assistance in the form of deferred payment loans. There are two funding options available: CDBG and HOME.
To be eligible for the program, you must not have owned a home in the last three years, have a total household income of 80% or less of the area median income, be a United States citizen or a permanent resident alien, and meet certain property criteria. The property must be a single-family home, townhouse, or condo located in the city limits of Plano, be insurable, and meet federal EPA regulations and federal relocation regulations.
There are also several eligibility requirements that must be met. The main borrower must be employed for at least one year, and applicants with less than six months of employment must provide evidence of past 12 months of work. You must attend an eight-hour First Time Homebuyer class held by the City and receive housing counseling by a HUD approved agency. Cash assets must be less than $36,000 (not including retirement accounts), and homebuyer(s) and spouse(s) must have a minimum credit score of 620. Any judgments must be paid off, and bankruptcy must have been discharged for at least two years. You must contribute a minimum of $1,000 toward the down payment or pay for closing costs, and gift funds can be used to meet this requirement. Homebuyers with a credit score of 700 or higher may increase their debt ratio up to 36%, and must be approved by an in-house underwriting process.
Property requirements include being decent, safe, sanitary, in good repair, and meeting minimum housing standards. Manufactured homes are ineligible. Properties built before 1978 are subject to a visual lead paint inspection and must not have cracked or peeling paint that exceeds HUD guidelines.
The CDBG funding is in the amount not to exceed $10,000, 0% interest, deferred, forgivable loan, second lien position with a 5-year affordability period. The HOME funding is in the amount not to exceed $55,000, 0% interest, deferred, forgivable loan, with a 15-year lien on the property. The amount of down payment assistance is based on need, and the HOME Homeownership Value Limits effective date is October 1, 2022.
Overall, the Plano First Time Homebuyers Assistance and Educational Program is designed to assist eligible low and moderate income households to buy a home in Plano. If you meet the eligibility requirements and property criteria, this program may be a great option for you.