Extended to TDCJ employees in Hazardous Duty pay positions
Home loan program could make American dream a reality
Home ownership. It’s the American dream. Yet in today’s sky-high housing market, it can be a dream beyond the reach of some median income workers.
But a program extended for the first time this year to cover TDCJ correctional officers, correctional supervisors, and all other full-time agency employees earning hazardous duty pay, could make that dream a reality for first-time homebuyers.
TDCJ Human Resources Director Carol Blair Johnston calls the Texas Fire Fighter, Law Enforcement and Security Officer Loan Program “one of the hidden jewels” to come out of the regular session of the 79th Texas Legislature. The two-year-old program previously accessible only to firefighters and law enforcement officers now makes affordable 30-year fixed rate mortgage loans and 5 percent down payment grants available to qualifying TDCJ employees. The program administered by the Texas State Affordable Housing Corporation (TSAHC) has $25 million a year to distribute statewide on a first-come, first-serve basis to first-time homebuyers looking to purchase a newly-constructed or existing home.
In late July, TSAHC Single Family Program Manager Cathleen Dean said approximately $12 million remained available for the program that is also known as the Homes for Heroes Program.
“The people that are going to benefit are those that pursue it,” Johnston said about the program. “If anybody thinks they are going to sit back and think about this for a while, they’re probably not going to be able to get in on it this year even if they do qualify because each year the program has only so much to distribute. Once that’s gone, money is not again available until the following year.”
Dean said the program is now funded at $25 million a year through 2014 provided the loans remain in demand. She said the down payment grants are especially attractive to first-time homebuyers, which the program defines as an individual or family that has not owned or had an ownership interest in any residence during the last three years.
“It’s always an obstacle to buy your first home if you don’t have the money to cover closing costs,” she said. “The five percent grant for down payment assistance is truly a grant. It’s not a second lien. It’s not forgivable after so many years in the house. It is funded up front at closing by the mortgage lender and the buyers never repay that.”
In addition to being first-time homebuyers, applicants for a loan and down payment assistance must reside in Texas and meet the income and home purchase price limits set by the program. They must also meet standard mortgage underwriting requirement demonstrating credit worthiness and occupy the purchased home as their primary residence. To apply, individuals must directly contact a participating lender to complete the application process.
Dean emphasized that TSAHC does not underwrite the loans.
“We don’t underwrite these loans and we don’t make the criteria for them,” she said. “These loans can be purchased through regular FHA, VA and conventional means. So those underwriting guidelines that would apply to them if people went out on their own without a program also apply here. They’re regular loans.”
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