Hey there! Navigating the home-buying process can feel overwhelming, especially when you’re trying to figure out how to cover that hefty down payment. But don’t worry—Austin has a fantastic program designed to help first-time homebuyers like you make your dream of owning a home a reality.

What is the City of Austin Down Payment Assistance Program?

The City of Austin offers a Down Payment Assistance (DPA) Program to support eligible first-time homebuyers in purchasing a home within the city’s full-purpose jurisdiction. This program provides a 0% interest loan to cover down payment and eligible closing costs, including pre-paid expenses associated with home buying.

More details can be found on the official program page: City of Austin Homebuyer Resources.

Funding Source

The program is funded by the City of Austin’s Housing Department, demonstrating the city’s commitment to affordable homeownership opportunities for its residents.

Eligibility Criteria

• First-Time Homebuyer: You haven’t owned a home in the last three years.
• Income Level: Household income must not exceed 80% of the Median Family Income (MFI) for Austin.
• Homebuyer Education: Completion of a HUD-approved homebuyer education course is required.
• Property Location: The home must be a single-family home or condominium located within Austin’s full-purpose city limits.
• Property Price: The sales price of the home cannot exceed $579,025.

Benefits

• Financial Assistance: Eligible homebuyers may receive up to $40,000 in assistance.
• Affordable Homeownership: Reduces upfront costs, making homeownership more accessible.

Potential Drawbacks

• Loan Repayment: The assistance is provided as a deferred, 0% interest loan. The loan will be recaptured if the home is sold, rented, or refinanced before the affordability period ends.
• Property Restrictions: The property must be within Austin’s full-purpose city limits.

Application Process

1. Verify Property Location: Ensure the home is within Austin’s full-purpose city limits.
2. Complete Homebuyer Education: Enroll in a HUD-approved course.
3. Obtain Mortgage Pre-Approval: Secure pre-approval from a participating lender.
4. Gather Documentation: Prepare necessary documents like ID, income verification, and bank statements.
5. Submit Application: Work with your lender to submit the Down Payment Assistance Application.

Geographic Availability

This program is available exclusively within the City of Austin’s full-purpose jurisdiction. Verify eligibility with the City of Austin Jurisdictions Web Map.

Pros and Cons

Pros:

• Significant Financial Assistance: Up to $40,000 available.
• No Interest: The loan is interest-free.
• Homebuyer Education: Courses help buyers navigate homeownership successfully.

Cons:

• Recapture Provisions: Selling or renting the home before the affordability period ends requires loan repayment.
• Property Limitations: The program is restricted to properties within Austin’s full-purpose city limits.

Program Type

This program provides down payment assistance in the form of a 0% interest deferred loan.