Safe and affordable housing is essential for every community, and affordability is a major issue facing renters and potential homebuyers across the country. When you start your home search, you may find yourself wondering how much you can afford and if there are any helpful programs that put the path to homeownership closer in reach. We’re here to help you understand Austin and Texas affordable housing programs and resources, so keep reading.
In Austin, the rise in home prices is outpacing income, according to a recent housing affordability outlook report by researchers at Texas A&M University’s Texas Real Estate Research Center. Factors like median household income and median home sale price coupled with rising mortgage rates (and therefore higher monthly payments) have hurt purchase affordability.
What down payment assistance programs are available in Austin?
How to qualify, apply, and get started
The Texas State Affordable Housing Corporation’s (TSAHC) website is a great place to start. TSAHC provides fixed-rate mortgage loans, down payment assistance, and mortgage interest tax credits for homebuyers. They do this through two programs:
- Homes For Texas Heroes Program: This program offers home loans and down payment assistance for teachers, police officers, firefighters and EMS personnel, corrections officers, and veterans.
- Home Sweet Texas Home Loan Program: This down payment assistance program provides qualifying homebuyers with a mortgage loan and funding to use for a down payment. Through down payment assistance, they help potential buyers overcome a hurdle. According to their website, if you’re eligible, you can essentially receive free money to help you buy a home.
Note: Both of these programs do require you to have a minimum credit score of 620 and meet certain income requirements.
What tax credits are available?
How to apply and get started
TSAHC also has mortgage credit certificates for first-time homebuyers (defined as anyone who hasn’t owned a home in the past three years). According to TSAHC, an MCC reduces your federal income taxes every year by allowing you to get 20% of what you spent on mortgage interest back as a tax credit. Because the tax credit refunds a portion of your mortgage interest, it also effectively reduces your mortgage interest rate.
“We recommend that all first-time home buyers ask their lender about an MCC,” says Joniel LeVecque, Homeownership Programs Director at TSAHC. “By reducing what you pay in mortgage interest, an MCC can make it easier to afford a home in a high-cost market like Austin. Plus, you can keep your MCC if you decide to refinance when interest rates go down again.”
The Mueller Affordable Homes Program
Another program is the Mueller Affordable Homes Program. Through this program, Catellus (Mueller’s master developer), the City of Austin, Mueller homebuilders, and apartment developers work together to provide a portion of all the homes at Mueller at a purchase or rental price structured for individuals and families at or below 80% of Austin’s Median Family Income (MFI). This number is subject to change, but as of June 1, 2023, that number would be $61,800 or less for one person, $70,600 for two people, and $79,450 for three people.
This program is affordable because the homes that are sold are largely the same as market-rate homes and they’re built by the same builders. For example, a home with a market value price of $550,000 might cost $225,000 through this program.
Homes sold through this program are also under a restrictive covenant, which is a 30-year agreement that exists to protect long-term affordability. This is done by protecting tax valuation, setting use restrictions, and by ensuring that the resale of the home is managed by the Foundation, which can choose another qualified buyer.
Keep in mind that if you qualify, you’ll still need to meet certain loan requirements. If you have trouble qualifying for a mortgage loan, they are partners with BCL Texas which provide mortgage counseling, credit repair, and education to help families and those who are ready to purchase.
If you’re interested in the Mueller Affordable Homes Program, you can email info@cwhaustin.com or visit www.cwhaustin.com to learn more.
The City of Austin website also features a variety of other affordable housing programs and initiatives that you can view by clicking on the word housing on their initiatives page.
How do I know what I qualify for?
When it comes to programs related to TSAHC, finding out if you qualify for a program couldn’t be easier — you can take their eligibility quiz to see what is available to you. The quiz consists of four steps that ask you questions. These include asking what your job title is if you’re a first-time homebuyer, what county you are purchasing a home in, how many people live in your home, and your gross annual income.
The Mueller Affordable Homes Program has MFI ranges, but different homebuilders and specific developments within the program may have different requirements. Generally, you may not have more than $150,000 in assets if you are under 59.5 years of age, and no more than $500,000 if you are older than that. Additionally, the primary owner must work more than 25 hours per week unless they are retired, have young children not yet in school, or are disabled.
Each program has its own criteria, so it is best to ensure you assess your qualifications with the most updated information for the program you apply to.
What online tools are available?
As a homebuyer, there are a variety of online tools and resources to help you figure out affordable housing programs that you may qualify for, as well as comparison calculators, education, and affordable housing maps. Some of these tools include:
- Loan comparison calculator: You can use this tool to compare different loan types and down payment assistance options offered by TSAHC.
- How much you can afford calculator: This tool uses your income, debt, location, and savings to estimate how much home you can afford.
- Homebuyer education: If you are using a TSAHC program, you’ll need to complete one of these educational courses.
- On the House Podcast: TSAHC’s podcast focuses on homeownership and the homebuying process (we recommend Episode 18: Tips for Winning the Bid in a Competitive Market)
- Financial Toolbox: TSAHC has a website devoted to online tools to help you with homeownership.
- Affordable Housing Online Search Tool (AHOST): This map allows you to see what affordable housing is near you.
- Down Payment Assistance: Down Payment Resource links potential homebuyers with down payment assistance and offers the necessary tools to assist them on their path to homeownership.
Home Possible®
Another program to help buyers achieve their dream of owning a home is the Home Possible® from Freddie Mac. This affordable lending program is perfect for low-to-income borrowers as it allows down payments starting at 3% and more credit flexibilities. Know where you want to move? Try their Home Possible® Income and Property Eligibility Tool to see if you qualify for a Home Possible loan in that area.
Can a real estate agent help me?
Yes! Having an experienced agent on your side ensures you have an advocate throughout the process. You can find a Realtor that is approved by TSAHC and is familiar with their programs here. Many Realty Austin agents are on this page and are dedicated to helping make homeownership a reality for all.
