THDA Has A Great New Program

In essence, THDA will now allow a buyer, who is buying in a designated zip code, a second mortgage of $15,000 that is completely forgivable if the buyer lives in the home for 10 years.  Here are the highlights for the program:

·         Available March 1st, but applications may be taken now.

·         Must qualify for the THDA Great Choice (the normal program – standard guidelines, 45% max debt ratio for example)

·         Must meet standard income limits and house acquisition price limits and meet IRS requirement for first-time homebuyer

·         Must be in a designated zip code (see flyer below)

·         New construction is NOT eligible

·         Pre and Post purchase homebuyer education is a requirement

·         Rate and fees for first mortgage are same as normal Great Choice program (nothing added for this program)

·         $15,000 second mortgage available for down payment, closing costs and prepaid items

o   $15,000 second must be taken in full – if more than needed, the first mortgage is reduced accordingly

o   No payments made on second mortgage during repayment terms of the first mortgage

o   If home sold in first 5 years, the full second mortgage must be repaid

o   Starting in year 6, the second mortgage is forgiven at a 20% per year rate through year 10

o   If home is owned longer than 10 years, there is no repayment due for the second mortgage

For additional information on THDA qualifying, go to www.thda.org; the updated guidelines for this new program will be available next week. 

If there are other available options like USDA, VA or our internal bank product, I’m not normally a big THDA fan due to the higher rate and added fees (compared to the traditional FHA program).  However, for a first time buyer who is buying in one of the zip codes listed on the attached document, this is a really good option.  You are welcome to call me if you have any questions.

Check out the flyer from THDA below for more specifics and eligible zip codes: