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Dallas FHA Down Payment Assistance Programs In 2021

March 23, 2021 | By Reef Merhi
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Need Help Buying a Home? Apply for Down Payment Assistance

Saving up for a down payment can be a daunting, long process. Fortunately, there are plenty of down Dallas FHA Down Payment Assistance programs available to help you buy a home sooner.

Texas offers many down payment assistance programs to people with certain incomes and occupations, and you may be able to qualify for thousands of dollars to put towards your FHA loan.

Here’s what you need to know about qualifying for down payment assistance in Dallas.

Down Payment Assistance and Dallas FHA Loans

One of the biggest questions FHA borrowers ask is if down payment assistance is available for Dallas FHA mortgages. The answer is a Texas-sized yes!

Down payment assistance programs, like FHA loans, were created to help people with low and moderate incomes. If you need help gathering funds for a down payment on your FHA loan, there are plenty of Texas programs that can help.

The Different Types of Dallas Down Payment Assistance

Dallas down payment assistance can come as a grant or a loan. Grants are funds gifted by the organization that you don’t ever have to pay back.

There are three types of loans available for down payment assistance. One must be paid off in conjunction with your mortgage. The next offers deferred payments, and the last type of loan can be forgiven. Down payment assistance programs vary greatly from county to county, so the type of loan available in your area depends on the programs available.

Who Can Get Down Payment Assistance in Dallas?

Down payment assistance programs target specific demographics, incomes, and occupations.

For example, the Homes for Texas Heroes Program specifically offers funds to firefighters, police officers, teachers, veterans, and other frontline workers.

Many programs are available in Dallas for individuals with low income. Those who have a high income, are purchasing a second home, or are not planning to use the home as their primary residence are not typically eligible to receive down payment assistance.

How to Obtain Dallas Down Payment Assistance

When it comes to getting down payment assistance, it’s all about location.

While the state of Texas offers many down payment assistance programs, such as My First Texas Home and the Home Star Program, you may be able to get more assistance from the county you live in depending on what programs are available there.

It’s important to research what down payment assistance programs are available in your specific county so you can factor that into your homebuying plans.

Dallas FHA Loan Requirements

If you have a credit score of at least 500, you can qualify for an FHA loan. However, you will be required to put down ten percent.

If you can raise your credit score to at least 580, you will only be required to put down 3.5%, so your down payment assistance may cover the full amount.

Making a larger down payment is never a bad move, but if you want to own a home sooner rather than later, down payment assistance can get you most of the way there if your credit score is higher.

Be sure to pay down as much debt as possible before applying for the FHA loan. To qualify, your debt-to-income ratio has to be less than 50%. You must also pay off any owed federal debts, taxes, and balances on your existing FHA loan if you have one.

FHA Mortgage Limits in Dallas

When you are buying a home with an FHA loan in Dallas, you must stay within the allotted loan limits. The limit for a single-family home is $356,362.

If you are in a high-cost area, the FHA borrowing limit is $822,375.

Finding an FHA Mortgage Lender in Dallas

When you are using down payment assistance, it can make finding the right lender a little more difficult.

Some lenders can have strict requirements about how you use your down payment assistance with your FHA loan, so you have to ask around and find one that is flexible with your needs. On top of that, you must also negotiate fees and find an affordable annual percentage rate.

Purchasing an FHA Home in Dallas with Down Payment Assistance

Using down payment assistance can make the process of buying a home easier and quicker. However, the property you want to buy must meet certain requirements.

The FHA requires that the home be appraised to ensure it passes their standards before you are allowed to use the loan to purchase it. The home must be your primary residence, and it must be titled in your name. You can not flip the home or buy an investment with an FHA loan.

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