I've recently learned that there are special programs for first time homebuyers (other than FHA) that I could possibly take advantage. Has anyone gone through this process in Texas and educate me on what all goes into it? I have researched into the program and have not found much relating to the process to get approval for a loan on this program and what other requirements I have to meet. This link is the best I could find in my internet research. http://www.tsahc.org/homebuyers-renters/home-sweet-texas-home-loan-program
I appreciate any help you guys have, and hope to pay it forward as I move through my real estate investment journey!
@Gonzalo Sequeira . My experience has been, these "First Time" or "Income Restricted" Loan offerings by various State and Local Agencies are all done through a Typical Lending Company (Mortgage Banker / Mortgage Lender) that has qualified with the Agency(s) offering the program.
For Example, if you met the criteria for a "Texas Vet Loan", and were qualified for the program, all the processing and workup of the Loan package will be completed by Blank (Generic) Mortgage Company. Once they have developed & processed the Loan Qualification Package, they send the package to the Texas Veterans Land Board, asking for approval & Funding of the Loan. Once your Loan Package is Accepted & Approved by Texas Veterans Land Board, the Closing of the Loan & Servicing of the Loan is handled by the originating Lender.
What this means to you is, find a Lender you feel comfortable with and as part of your due diligence, ask them if they have access to "First Time Homebuyer" programs or if you fit the criteria, an "Income Restricted" Loan Programs.
@Gonzalo Sequeira The best analogy I can provide was provided to me by a mortgage broker friend: "If you're in the market to buy a Mercedes (conventional loan on attractive terms), you don't go to the Honda dealership (FHA loans)."
If you have a good job, decent credit score and some money to invest, you will easily be able to find better conventional loan programs than FHA. The FHA program was not designed for upper-middle class income earners. Hence, the restrictions (valid IMO) in place (always paying mortgage insurance) will not be optimal if you make an above-average salary.
For instance, with lenders in DFW (they lend outside of DFW) you can easily score a 3-5% down conventional mortgage program at equal or better overall terms than the FHA loan. The mortgage insurance component will also go away once you get to 20% equity.
P.S. I own a Honda :)
@Jim Cummings and @Omar Khan thank you for your responses. This helps out quite a bit! With my income, it does seem like I would not fit the requirements for such loans. To Omar's point, I do think I will have to work with conventional loans and see what lenders will let me have a lower down payment. I'll have to factor the insurance component in my cash flow calculations a bit more, and it definitely narrows down price point for me.
Thanks again and I'll update ya'll on my progress!
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