Texas Home Loan Requirements for Hopeful Homebuyers

Texas Home Mortgage

Texas is one of the states in the U.S. that has the most number of cities having a high comfort index. There may be some cities that have the hottest summers, but the rest of the year everyone enjoys reasonably comfortable weather.

Partly because of this, people who dislike shoveling snow and wearing layers upon layers of clothes move to Texas, and you can’t blame them. The real estate industry in the area is in the pink, making it easy for aspiring homeowners to realize their American dream of owning a home.


Home Loan Programs in Texas

Texas has several home loan programs for homebuyers of varying needs. In addition to the ones already set by the federal government, the state government of Texas has created special housing assistance programs that adhere to Texan real estate law and suit its citizens’ unique needs. Below are a few examples that you may be interested in.

  • First-time Homebuyer Programs

First-time homebuyers are individuals who have not owned a home as their primary residence within the last three years, so if, for instance, you have been living in a rented apartment near your work these past several years, you can be considered a first-time home buyer.

One of the main reasons the government has such programs is because first-time buyers usually don’t have much credit history to boast of. Others have also just started acquiring assets or saving up money for down payment. With this in mind, special housing assistance programs for first-time homebuyers require lower down payments, lower credit scores, and more favorable rates and terms. Moreover, certain programs allow homebuyers to receive cash gifts from family members and friends for use on the down payment and closing costs. As we all know, down payments alone can range from 3.5% to as much as 20%, which can be hefty.

  • Special Home Loan Program for Teachers and other Government Employees

Originally called the Teacher Next Door Program, the Good Neighbor Next Door was broadened to include other government employees such as firefighters, emergency medical technicians, and law enforcement personnel. Aside from it being the federal government’s way of thanking these individuals by making homeownership accessible to them, it is also a fantastic way to develop communities as this program prescribes that the property to be purchased must be within a certain distance from the borrower’s place of work.

  • Home Loans for Vets

Other exciting programs are the Texas Veteran Loans and VA home loans. There may be some slight differences between the two, but they are both available to those who have served or are serving in the National Guard or the military, and their eligible spouses. The Texas Vet loans are under the Texas Veterans Land Board while VA loans are under the United States Veterans Affairs or VA.

Basic Requirements for Texas Home Mortgages

Would-be homebuyers are often thwarted by credit requirements and stupendous down payments and insurances. The good news is, some Texas home loan programs such as the ones mentioned above, require very little if not zero down payment and less than average credit scores. VA loans, for example, do not need monthly mortgage insurance payments and absolutely 0% down payment.

For those who don’t qualify for either a Texas Vet or VA home mortgage, the Federal Housing Administration or FHA has the easiest loan programs to get approved for, even if you have low credit or no credit history at all. Just keep in mind that to increase your chances of qualifying for any of these mortgages, always have a credit score of no less than 500 (higher is always better), a DTI of not more than 55%, and be ready to provide your lender with established proof of steady income.

Do not let anything get in your way of achieving your dreams. When in doubt, speak with a reputable real estate agent or trusted mortgage company in Texas today to learn what options are available to you.

by: Lorenza