Hey there! Navigating the journey to buying your first home can feel overwhelming, but don’t worry—I’m here to help. Let’s chat about the City of Plano’s First-Time Homebuyers Assistance and Educational Program, designed to make your dream of owning a home in Plano a reality.

Program Overview

The City of Plano offers a program specifically tailored for first-time homebuyers, providing financial assistance to eligible low- and moderate-income households. This assistance comes in the form of deferred payment loans that can be used toward down payments and closing costs, helping to ease the financial burden of purchasing a home.

Funding Source

This program is funded through federal initiatives, including the Community Development Block Grant (CDBG) and the HOME Investment Partnerships Program (HOME), both provided by the U.S. Department of Housing and Urban Development (HUD).

Eligibility Criteria

To qualify for this program, applicants must meet the following requirements:

• First-Time Homebuyer: You should not have owned a home in the last three years.
• Income Limits: Your household income must be at or below 80% of the area median income, adjusted for household size. These limits are updated annually, so it’s essential to check the current figures.
• Credit Score: A minimum credit score of 620 is required.
• Debt-to-Income Ratio: The program requires a front-end ratio of 31% and a back-end ratio of 43%. This means your monthly housing expenses should not exceed 31% of your gross monthly income, and your total monthly debt payments should not exceed 43%.

Benefits

The program offers two options for assistance:

CDBG Option

• Provides up to $10,000 as a deferred, forgivable loan with 0% interest.
• The City places a five-year lien on the property, which is forgiven if you continue to occupy the home as your primary residence for the full term.

HOME Option

• Offers up to $55,000 as a deferred, forgivable loan with 0% interest.
• This option comes with a 15-year lien on the property.
• A shared equity agreement extends for 30 years, meaning if you sell or transfer the property before this period ends, a portion of the home’s appreciated value may be owed to the City.

Potential Drawbacks

• Occupancy Requirement: You must use the home as your primary residence for the duration of the lien period. Selling, leasing, or moving out before the term ends may trigger repayment of the assistance.
• Property Eligibility: The home must meet specific standards set by the City, including passing inspections for safety and code compliance. Homes built before 1978 are subject to additional lead paint inspections.
• Shared Equity Agreement: Under the HOME option, if you sell or transfer the property within 30 years, you may need to share a portion of the home’s appreciation with the City.

Application Process

Here’s how to get started:

1. Housing Counseling: Begin by receiving housing counseling from a HUD-approved agency. This step is crucial to ensure you’re prepared for homeownership.
2. Homebuyer Education: All applicants must complete an 8-hour homeownership education class.
3. Pre-Qualification: Obtain a pre-qualification letter from a lender.
4. Application Submission: Complete the program application and gather all required documents, such as income verification, tax returns, and bank statements.
5. Interview: Schedule a face-to-face interview with a Housing and Community Services Coordinator by calling (972) 208-8150.

For more detailed information and to access the application forms, visit the City of Plano’s official website: Plano First-Time Homebuyers Program.

Final Thoughts

Embarking on the path to homeownership is a significant milestone, and programs like this are designed to support you every step of the way. If you have any more questions or need further assistance, feel free to ask!

Additional Information

Geographic Availability

This program is available exclusively within the city limits of Plano, Texas.

Original Source

The primary source of information is the City of Plano’s official website: Plano.gov.

Pros and Cons

Pros:

• Substantial financial assistance for down payment and closing costs.
• Deferred, forgivable loans with 0% interest.
• Support for low- to moderate-income households.

Cons:

• Strict occupancy requirements with potential repayment if terms are not met.
• Property must meet specific eligibility criteria, including passing inspections.
• A shared equity agreement under the HOME option may require repayment of a portion of the home’s appreciation if sold within 30 years.

Application Process

As outlined above, the process includes housing counseling, homebuyer education, lender pre-qualification, application submission, and an interview with a program coordinator.

Type of Assistance

The program provides deferred, forgivable loans for down payment and closing cost assistance.

Program Availability

The program is currently active. For the most up-to-date information, please refer to the City’s official website.