Thursday, November 18, 2010

TDHCA reduces rates to first-time homebuyers - YEA!

State housing agency offers lowest homebuyer interest rates in program history
Rates at 4.20% for unassisted loans, 4.95% for assisted loans with up to 5% of mortgage amount for down payment, closing cost assistance

(AUSTIN) — The Texas Department of Housing and Community Affairs (TDHCA) today announced that it has reduced interest rates on mortgage loans offered through its Texas First Time Homebuyer Program to historically low levels, further opening the door to safe and responsible homeownership for qualifying low to moderate income Texans.

Interest rates on these 30-year, fixed rate mortgage loans have been set at either 4.20 percent or 4.95 percent, depending on which of two types of loans the borrower selects. Rates had previously been set at 4.99 percent or 5.74 percent, respectively. The assisted rate of 4.95 percent is available with funds for down payment and closing cost assistance, helping families overcome what are often the biggest obstacles to buying a home.

“TDHCA is extremely excited to be making what has always been a terrific offer for potential homebuyers even better,” said TDHCA Executive Director Michael Gerber. “Our partners in the Texas real estate and mortgage finance industries are a critical part of our success, helping raise awareness of this safe, reliable lending product. It is our hope that these historically low interest rates will allow more Texans to achieve the American Dream of homeownership.”

“Texas Realtors and the real estate community are extremely proud to work together with TDHCA and help market this truly wonderful program,” said Bill Jones, Chairman of the Board for the Texas Association of Realtors. “These low interest rates are sure to help thousands of families across the state buy their first home, and I urge all Texans ready to take this important step to contact a Texas Realtor and take advantage of this opportunity.”

Available funds are part of an unprecedented $500 million in mortgage revenue bond authority TDHCA announced last May, the single largest financing initiative for state homebuyer funds in the 27-year history of the program. Approximately $100 million in mortgage loan reservations have been made to date, and interest rates are typically reset on a monthly basis as market rates adjust.

Gerber explained that Texas First Time Homebuyer Program offers two types of loans at two different interest rates: assisted loans, which will feature the higher 4.95 percent rate but also offer down payment and closing cost assistance up to 5 percent of the mortgage amount in the form of a 30-year repayable second lien; and unassisted loans, at the lower 4.20 percent rate but with no additional assistance.

No monthly payments are due on the down payment portion of the assisted loan, he noted, and therefore will not be required to be included in the borrower’s debt-to-income-ratios. However, the loan is due and payable upon sale, refinance, or payoff of the original mortgage loan.

TDHCA’s First Time Homebuyer Program offers qualifying households who have not owned a home in the previous three years an opportunity to obtain reliable mortgage loans.

Eligible households can earn up to 115 percent of the area median family income, depending on the number of individuals living in the home, as long as all other program requirements are met.

Loans are available through the program’s network of over 55 participating lending institutions with more than 300 branches located throughout the state. Applicants must qualify under FHA, RHS, VA, Fannie Mae, or Freddie Mac guidelines.

Texans wanting additional information are encouraged to visit the Texas First Time Homebuyer Program Web site at or call 1-(800) 792-1119 to learn more about income and eligibility requirements, loan guidelines, or to find the nearest participating lender.

About The Texas Department of Housing and Community Affairs
The Texas Department of Housing and Community Affairs is the state agency responsible for affordable housing, community and energy assistance programs, and colonia activities. The Department currently administers $2 billion through for-profit, nonprofit, and local government partnerships to deliver local housing and community-based opportunities and assistance to Texans in need.

Realtors’ perspective: Mortgage interest deduction in the crosshairs

Posted: Tuesday, November 16, 2010 5:30 pm | Updated: 9:22 am, Thu Nov 18, 2010.

By MARGIE DORRANCE | 0 comments

One thing you can say for the President’s National Commission on Fiscal Responsibility and Reform is that they definitely know how to get people’s attention.

Last week, the co-chairs of the bi-partisan deficit reduction panel released details of a preliminary draft report that is intended to identify policies to improve the country’s fiscal situation in the medium term and to achieve fiscal sustainability over the long run.

The details of the draft report that were made public are being called a “trial balloon” by many since the final report will only include those ideas that are agreed upon by 14 out of the 18 members of the commission. That is a very high standard and means that there will likely be quite a few ideas that don’t make it in the final report, which is expected to be released on Dec. 1.

One topic for consideration in the draft report is the idea of lowering the cap on the mortgage interest deduction. Currently, people may deduct the interest they pay up to a total mortgage amount of $1 million. This deduction applies for combined mortgages on primary residences and second homes, up to the total $1 million limit. The proposal in the draft report would lower the limit for the mortgage interest deduction to $500,000 for the mortgage and would restrict it to only the primary residence.

To try to better explain: Now, if you have a $750,000 mortgage on your primary residence, a $500,000 mortgage on a second home and pay a total of $75,000 in interest on both properties, you can deduct only $60,000 of the interest, which is the interest paid on the first $1 million. Under the proposal, with the same terms, you would only be able to deduct $30,000, which is the interest on the first $500,000 of your mortgage on only your primary residence.

This would not be a stand-alone change, so obviously other changes might decrease or increase the net impact on your taxes. For example, other recommendations from the report include tripling the standard deduction to $15,000 for individuals ($30,000 for married couples), repealing the deduction of state and local taxes on your federal income tax return and establishing marginal tax rates of 15 percent, 25 percent and 35 percent.

To put this process in context, the last time a tax reform measure of this magnitude was enacted was in 1986, and it took about two years for it to make its way through Congress and the president, so I don’t expect swift action in this case either.

According to the U.S. Census Bureau, 62.3 percent of people living in our region own their home. That is quite a few people who benefit from the mortgage interest deduction. Nationwide, Americans will save $104 billion on their taxes in 2011 because of the mortgage interest deduction, according to the Tax Foundation, a Washington, D.C.-based research group.

Owning property has been the cornerstone of American society and our economy for centuries. As someone said recently at an industry event, “I don’t think very many children dream about some day renting a home. There’s a reason why homeownership is called the American Dream.”

Thankfully, our local representatives in Congress know the importance of the mortgage interest deduction. Rep. John Culberson (R-District 7) who represents all the Examiner Newspapers distribution areas, told us, “The mortgage interest deduction is a valuable tool to assist homeowners through this recession. Preserving the mortgage interest deduction is essential to revitalizing the housing market, restoring our economy and protecting overburdened taxpayers.”

While there may be aspects of this draft proposal that we don’t like and some that we do, I think everyone agrees that we need to take steps to ensure our economic viability and stability. Owning a home has intrinsic value for the owner and provides stability for the neighborhood and society. We should be taking steps to encourage more people to purchase homes, not making it less desirable.

Realtors® believe that anyone who is able and willing to assume the responsibilities of owning a home should have the opportunity to pursue that dream. You can rest assured that we will be working with our public policy makers and industry leaders to ensure a model for responsible, sustainable homeownership, including keeping the mortgage interest deduction in place.

Dorrance is the 2010 Chair of the Board of the Houston Association of Realtors®, representing more than 25,000 members. She is also a principal at the Keller Williams Realty Metropolitan and has been in the real estate industry in Houston for more than 30 years.

Monday, November 1, 2010


Just a quick post to thank the wonderful residents of Crown Oaks in Montgomery, TX for an AWESOME Halloween. If you are looking for a family friendly neighborhood in which to raise your children, this one really takes the cake. Crown Oaks is a gated community with gorgeous homes on acreage lots and its families are "all about their children"!

My daughter and her husband chose this community in which to build their home when they 1st got married 9 years ago and have since been raising their 3 children there. It's become our family's Halloween tradition to start the day out early in the afternoon, munching on chile, tamles, hotdogs and other fallish foods. Then the kids dawn their costumes for the annual trek through the neighborhood and to the park.

Unlike other years when we rode on one of the many hayrides, this year we climbed into the bed of the pick-up with blankets and lawnchairs and crept through the streets towards the park. We passed numerous hayrides and golf carts, all festivly decorated for the event with flashing lights, goolish sounds coming from loud speakers and loaded down with kids in all sorts of attire. And it's not just the kids that get involved in dressing up as it is the scads of parents that joined in the fun.

One of the neighborhood parks was the setting for 'Trunk-R-Treating". It was awesome! Everyone joined in. Then after gathering all the candy these 3 kids could hawl, we made our way through the streets lined with homes decorated as spectacularly as they do for Christmas. So many families had set-up at the ends of their driveways with candy to give passers-by that not a stone was left unturned to make this night fun for not only little children but big kids like me. Thank you Crown Oaks for the part you played in making wonderful memories for our family. See ya next year!