My First Texas Home vs My Choice Texas Home

TSAHC isn't the only statewide homebuyer assistance resource in Texas. The Texas Department of Housing and Community Affairs, or TDHCA, also offers mortgage and down payment assistance programs. Two names I want you to know are My First Texas Home and My Choice Texas Home. They sound similar but they're not identical and the biggest difference is right there in the names. Let's break them down.

What Is My First Texas Home?

TDHCA's My First Texas Home program is designed primarily for qualifying first-time home buyers and eligible veterans.

The program offers qualifying buyers a 30-year mortgage along with available down payment and closing-cost assistance.

TDHCA currently lists:

• A minimum 620 credit score

• Income and purchase-price limits

• Required homebuyer education

• Use of an approved participating loan officer

• Eligible FHA, VA and USDA financing

The exact limits and available financing options should always be verified when you're ready to apply.

What Does "First-Time Home Buyer" Mean?

This one surprises people. For My First Texas Home, first-time homebuyer eligibility generally means you haven't owned and occupied a primary residence during the previous three years. That means, first-time doesn't necessarily mean you've never owned a home in your life. Certain exceptions also exist for qualified veterans and purchases in qualifying targeted census tracts. This is why I don't want buyers ruling themselves out based on what they think a program means.

What Is My Choice Texas Home?

Now let's say you've owned a home recently. That's where My Choice Texas Home deserves a conversation. TDHCA describes My Choice Texas Home as being available to first-time buyers, repeat buyers and veterans. You don't have to be a first-time home buyer to potentially qualify. It also offers 30-year mortgage financing and available down payment assistance for eligible borrowers.

How Much Assistance Is Available?

TDHCA advertises assistance of up to 5% through eligible program options but I'm going to say the same thing I said about TSAHC, up to 5% does not mean everybody receives 5%. Your actual option depends on the program, financing, current availability and your qualifications and different assistance structures can have different terms. Your lender needs to explain exactly what you're receiving.

How Do I Get Started?

TDHCA makes the starting process pretty straightforward.

Step 1: Complete the eligibility quick check.

Use TDHCA's Texas Homebuyer Program resources to explore initial eligibility.

Step 2: Connect with a TDHCA-approved loan officer.

You need a participating lender to originate the applicable program financing.

Step 3: Complete your mortgage qualification.

Expect the lender to review your financial profile.

Step 4: Complete homebuyer education.

TDHCA requires approved homebuyer education for borrowers receiving its assistance.

Step 5: Compare your program options.

Ask whether you qualify for My First Texas Home or My Choice Texas Home. Then compare that financing against other mortgage options available to you.

Don't Skip Homebuyer Education

I know, another class. But this is one requirement I actually want buyers to embrace. TDHCA's homebuyer education resources cover the process of becoming mortgage-ready and preparing for the responsibilities of homeownership and if you aren't mortgage-ready today, housing counseling can also help you understand:

• Credit

• Budgeting

• The lending process

• Homeownership costs

• Available financial resources

You don't have to wait until you're approved to start learning.

Ask About Additional Local Assistance Too

Here's where things get interesting. TDHCA also works with certain local housing finance corporations and municipalities that may provide additional assistance in eligible areas, subject to funding and program rules. Availability varies by location and funding can be limited. So ask your loan officer, "Is there any local assistance that can be combined with the state program where I'm purchasing?" Don't assume. Ask.

TSAHC or TDHCA?

Now we're getting to the question everybody wants answered. Which is better? I don't know yet and anybody answering that question without seeing your numbers doesn't know either. You may qualify for one, you may qualify for multiple options. One may offer more upfront assistance. Another may produce a better rate. Another may have better long-term terms. This is where your lender earns their seat at the table. Ask them to compare the programs side-by-side. So don't ask your lender "What's your best program?" Ask "Based on my financial profile and how long I expect to own this home, show me the options that make the most sense and explain the tradeoffs." That's a much better conversation.

This series is provided for educational purposes and is not mortgage, legal, financial or tax advice. Mortgage programs, interest rates, assistance amounts, funding availability and eligibility requirements can change. Verify current information with the applicable agency and qualified participating lender.