Hey there! Navigating the home-buying process can feel overwhelming, especially when you’re doing it for the first time. But don’t worry—I’m here to help you understand a fantastic opportunity that might make your journey to homeownership in Denton, Texas, a bit smoother.

What is the City of Denton Homebuyer Assistance Program?

The City of Denton offers a Homebuyer Assistance Program (HAP) designed to support low- and moderate-income families in purchasing their first home within the city limits. This assistance comes in the form of a forgivable loan with 0% interest, which can be used toward down payments and closing costs. Depending on your needs and eligibility, you can receive up to $50,000 in assistance.

Funding Source

The program is funded through federal grants from the U.S. Department of Housing and Urban Development (HUD) and is administered by the City of Denton’s Community Development Department.

Eligibility Criteria

• First-Time Homebuyer: You must not have owned a home in the past three years. Exceptions are made for displaced single parents or those owning a substandard mobile home.
• Residency: The home you intend to purchase must be within Denton’s city limits and can include existing or newly constructed single-family residences, condominiums, or townhouses. Mobile and manufactured homes are not eligible.
• Income: Your household income must not exceed 80% of the Area Median Income, adjusted for family size. For example, as of October 1, 2022, the limit for a four-person household is $77,900. These limits are subject to change, so it’s best to check the latest figures.
• Contribution: You’re required to contribute at least 1.75% of the sales price toward the purchase and have cash reserves equal to one month of mortgage payments after this contribution.
• Homebuyer Education: Attendance at a HUD-approved homebuyer education workshop is mandatory.

Benefits

The program offers two options for assistance:

• Option 1: Up to $14,900 with a 5-year affordability period.
• Option 2: Up to $50,000 with a 15-year affordability period.

Both options come as forgivable loans at 0% interest. If you maintain the home as your primary residence for the duration of the affordability period, the loan is forgiven. This means you won’t have to repay the assistance as long as you adhere to the program’s terms.

Potential Drawbacks

• Occupancy Requirement: You must live in the home as your primary residence for the entire affordability period (5 or 15 years, depending on the assistance received). Selling, leasing, or moving out before this period ends may require you to repay a portion of the assistance.
• Property Restrictions: Homes built before 1970 are generally ineligible unless major system upgrades have been completed. Additionally, properties in the 100-year floodplain or floodway are not eligible for assistance.
• Loan Types: The program accepts FHA, conventional, and VA loans with fixed interest rates. Adjustable-rate mortgages, balloon, subprime, and jumbo loans are not permitted. Non-occupant co-borrowers or co-signers are also not allowed.

Application Process

Here’s how you can get started:

1. Homebuyer Education: Enroll in and complete a HUD-approved homebuyer education workshop.
2. Pre-Approval: Contact a lender from the City’s list of participating lenders to determine your eligibility and obtain pre-approval for a mortgage.
3. Find a Home: Work with a realtor from the City’s list of participating realtors to find a suitable home within Denton’s city limits.
4. Application Submission: If your lender determines that you qualify for homebuyer assistance, they will submit the application on your behalf to the City’s Community Development Department.

For more detailed information, visit the City of Denton’s official website: City of Denton Homebuyer Assistance Program.

Final Thoughts

Programs like these are designed to make the dream of homeownership more accessible. If you think you might qualify, it’s worth exploring this opportunity further. Best of luck on your journey to finding your new home in Denton!

---

Additional Information

• Geographic Availability: This program is available exclusively within the city limits of Denton, Texas.
• Original Source: The primary source of information for the City of Denton Homebuyer Assistance Program is the official City of Denton website: City of Denton.

Pros and Cons

Pros:

• Significant financial assistance up to $50,000.
• Forgivable loan with 0% interest if program terms are met.
• Support for both down payment and closing costs.

Cons:

• Strict occupancy requirements with potential repayment if terms are not met.
• Limitations on property types and conditions.