City of Austin Down Payment Assistance Program (DPA)

Austin Downpayment Assistance

 
DPA City of Austin, Texas
City of Austin DPA Website
City of Austin DPA Brochure
 

Neighborhood Housing and Community Development

 
The mission of the City of Austin’s Neighborhood Housing and Community Development (NHCD) is to benefit eligible residents by providing housing, community development and small business development services. These services provide residents access to livable neighborhoods and increase their opportunities for independence.
 
To accomplish their mission, NHCD directly administers a variety of programs to serve the community’s housing, community development and economic development needs and provides grant funding to various agencies and non-profit organizations.
 
 

The Down Payment Assistance Program (DPA)

 
The NHCD’s Down Payment Assistance Program (DPA) provides qualified, first-time homebuyers, with a zero-interest loan to assist with purchasing a home located within the Austin City Limits. DPA finances cover the down payment and eligible closing costs and pre-paid expenses associated with buying a home.
 
 

DPA Program Options:

 
Standard DPA Program

  • Up to $10,000 in a deferred, *forgivable, 0% interest loan for 10 years
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  • Up to $1,000 additional for borrowers in a Mortgage Credit Certificate Program
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  • Up to $4,999 additional for people with disabilities

 
*The loan is forgiven if the borrower remains in the home 10 years without transferring title. Otherwise, the loan is due and payable is the borrowers sells, leases, transfers the title, refinances, gets a home equity loan, or pays off the first lien within 10 years.
 
Shared Equity DPA Program

  • Up to $40,000 in a deferred, 0% interest loan for 30 years
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  • The DPA loan plus a percentage of their equity (the same percentages as AHFC’s contribution) must be repaid by the borrower when he/she sells, leases, refinances, gets a home equity loan, pays off the first lien, or otherwise transfers title within 30 years.
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  • The borrower agrees to give AHFC the chance to purchase the house at market rate when (“right of first refusal”) when he/she decided to sell their home

 
 

CRITERIA FOR ELIGIBILITY

 

  • The borrower must be a first-time home buyer
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  • The household earns no more than 80% of the Austin Median Family Income
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  • The borrower must complete AHFC’s free “Housing Smarts” home buyer education classes
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  • The prospective property must be located with Austin City Limits
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  • The sales price does not exceed FHA’s 203b limit
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  • The borrower must be approved for a mortgage loan from a “Participating Lender”

 
 

Eligible Property Types

 

  • Single-family home
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  • Condo
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  • Town Home

 
 

Frequently Asked Questions

 

  1. How do I know if I qualify?
     
    Your household must first meet all program requirements and criteria. Then, your household must meet or fall below the annual income and asset limits set forth by the program’s guidelines, and your first lien mortgage loan must also meet the program’s guidelines. In addition to the program requirements and guidelines, the property you purchase must pass the HQS Inspection.
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  3. I recently lost my house in a divorce. Am I considered a first-time home buyer?
     
    Yes, you are considered a first-time home buyer. Federal regulation determines one to be a first-time home buyer if they have not owned real estate in the past 3 years or if they were displaced from their home due to a divorce.
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  5. How can I determine if an address is inside Austin City Limits?
     
    To find out if a property is located inside Austin City Limits, simply visit the City of Austin’s First Time Home Buyer Down Payment Assistance website. Follow the instructions for using the city map to see if a property address is inside Austin City Limits and is eligible for DPA. It is important to note that just because the property has an Austin mailing address does not necessarily mean that the property falls within city limits. Also, some neighborhoods in Del Valle, Pflugerville, and other outlying areas actually fall within the Austin City Limits and could be eligible for DPA.
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  7. How long does the DPA application process take?
     
    The length of time it takes for a DPA application varies. Usually, the DPA participating lender will turn in the DPA application package to the City of Austin about 3 to 4 complete weeks before closing. The City of Austin will only accept the package is everything listed in the checklist on the front of the application is provided. The 3 to 4 weeks gives the City enough time to review the application package, inspect the property, and print a check and closing documents for the title company. However, there is a possibility that additional documentation or verification may need to be provided. In this instance, the processing time could take longer than the typical 3 to 4 weeks.
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  9. Can I apply for DPA before I start looking for a home?
     
    You may not apply for DPA before you begin your home search. Down Payment Assistance funding availability is on a first-come first-served basis. As a result, all applicants are required to be officially under contract to purchase a ready-to-move into home and be in receipt of a fully underwritten mortgage loan approval at the time of the DPA application submission.

 
For more frequently asked questions about the specific DPA Programs, visit the City of Austin’s website.