Homeownership is a dream for many Houstonians but is out of reach for many residents. The City of Houston offers up to $50,000 to income-qualified residents. The City assists first-time homebuyers in the city limits through our Homebuyer Assistance Program.
Our assistance is a no-interest, forgivable loan secured by a lien. The loan is fulfilled if the buyer lives in the home for five years. If the buyer sells or moves out of the home before the end of five years, they will repay the City for a portion of the original loan amount.
It is reccomended to have your documentation ready at the appropriate steps.
Incomplete applications cannot be processed. Please be sure that you have collected all the documents on the Applicant Document Checklist before submitting your application.
Once submitted, the City reviews all documentation and will issue a Conditional Reservation Letter to accepted applicants.
Obtain a home loan through a lender. See a list of realtors who have worked with us before. Realtors and other professionals interested in learning more about the Homebuyer Assistance Program or helping residents take advantage of this program can sign up for our email list at the link below. Signing up will let us know of your interest and help us keep you up to date on any upcoming events or announcements. Sign up
Obtain a homebuyer education class certificate through a HUD-Approved Agency. See a list of accepted locations
Find a home that is taxed by the City of Houston. See a map of the City. Need help picking a home? Visit our Homebuyer Hub.
The Homebuyer Assistance Program takes about six weeks, provided there are no external delays. Please note that the six weeks is measured from the time the applicant submits a complete application. We cannot begin work on an incomplete application.
The applicant should submit all documents on the Applicant Document Checklist .
Below are links to all of our internal forms:
Once you receive a Conditional Reservation Letter, it is time to put a property under contract.
The lender will need to submit all the documents on the Property & Lenders Checklist
Below is a list of all our internal documents:
Please note TREC inspections will only be accepted if they were completed after construction.
The City then reviews all documentation provided while the file is in underwriting. Meanwhile, the property will go through an environmental review, then will be inspected.
If approved, the City will then issue a Commitment Letter .
Once you receive a Commitment Letter , you will be informed of a possible closing date and will sign the Terms and Conditions of the assistance being provided by the City.
Instructions and loan closing documents are sent to the title company and lender, who submit pre-closing documents, including:
Camera pictures of documents are not accepted, please scan and upload.
Q: What is the five-year second lien? - Answer
A: When the City assists someone in buying a home, we invest in someone to live in the home for the long term. We require them to live in the home for five years, secured through a forgivable loan. The loan is forgiven at the end of the five-year residency period. At the end of the five years, please submit this Release of Lien Request to HCDDLoanServicing@houstontx.gov.
Q: How much subsidy can I receive? - Answer
A: You could receive up to $50,000 in subsidy, based on your household financial need.
Q: Is there a maximum amount of liquid assets I can have? - Answer
A: You must have less than $30,000 in liquid assets at the time of eligibility determination and at closing.
Q: Do I have to be a U.S. Citizen? - Answer
A: The Applicant, Co-Applicant, and Spouse must be U.S. Citizens or a permanent resident.
Q: Can I utilize the down payment assistance if I have previously owned a home? - Answer
A: You must be a first-time homebuyer to participate in this program.
Q: How long does the process take? - Answer
A: The eligibility process can take up to six weeks, provided there are no external delays. Please note that the six weeks are measured from the time the applicant submits a complete application. We cannot begin work on an incomplete application.
Q: What if I must sell my home or move out before my affordability period is over? - Answer
A: In these cases, the City will collect a portion of the investment proportional to the remaining residency period. To begin this process, please submit this Payoff Statement Request form to HCDDLoanServicing@houstontx.gov.
Q: Is this program only available in certain areas? - Answer
A: No, the Homebuyer Assistance Program applies to any home that pays taxes to the City of Houston .
Q: Are there any fees associated with the program? - Answer
A: The buyer must contribute a minimum of $350 towards the transaction, which could be the inspection, down payment, appraisal, etc., but no fees are paid to the City of Houston. If someone tells you that there are participation fees, please report them for fraud .
Q: Are credit reports required for all household adults? - Answer
A: No. All household income must be reported, but only the loan applicant’s credit is reviewed during underwriting.
Q: Is there a credit score requirement? - Answer
A: No, the Homebuyer Assistance Program does not consider credit score.
Q: Is there a debt-to-income requirement? - Answer
A. Yes, the program requires a 33% front-end ratio and a 45% back-end ratio. The front-end ratio is calculated by adding the new monthly payment plus taxes and insurance and dividing the sum by the borrower’s monthly gross income. The back-end ratio is calculated by adding together the mortgage and all of a borrower’s monthly debt payments and dividing the sum by the borrower’s monthly gross income. For example, if a borrower has a monthly gross income of $5,000 and monthly debt payments of $2,000, their back-end ratio is 40% ($2000/$5000).
Q: Is there a maximum home price? - Answer
A: No. The buyer can select any home that fits their needs and budget as long as the front and back-end ratios are within our guidelines.
Q: What can the assistance provided be used for? - Answer
A: The assistance CAN be used for:
The assistance CANNOT be used for:
Q: What if I need to refinance my home? - Answer
A: If your mortgage information changes, you will need to share the new information with our department. Please submit this Subordination Agreement Request to HCDDLoanServicing@houstontx.gov.
Q: Can the appraisal be less than the sales price of a home? - Answer
A: No, the sales price of a home cannot be more than the appraised amount of the home.
Q: Does this program follow FHA guidelines? - Answer
A: No. The Single Family Eligibility sets and follows its own internal guidelines. Our underwriting includes calculating debt-to-income ratio, ensuring that there are no outstanding collections for government services or utilities, and verifying that there are no defaulted student loans.
Q: Is there a cost for the City’s inspection? What does this inspection include? - Answer
A: The inspection is a free service conducted by our department. A sample of the inspection can be downloaded (alternative version . Please note that the City’s inspection does not replace an independent inspection. We strongly recommend that the buyer obtain their own inspection.
A TREC inspection is required and must be conducted after construction is completed on newly constructed properties.
Q: What is the environmental review, and why is it needed? - Answer
A: The environmental review primarily looks at where the home is located relative to the floodway and floodplains. Homes located in flood zones are required to have flood insurance to complete the purchase.
Q: Is there mandatory training that lenders and realtors must take to participate in the program? - Answer
A: No. Any lenders and realtors may participate. However, we do encourage realtors and lenders to view our workshop replay video on YouTube for additional information and to gain knowledge of the program.
Q: Who is the loan servicer? - Answer
A: HCD’s programs are serviced internally with our Loan Servicing Division. The loan is not amortized; however, there is a 6% fee applied to the defaulted loan balance.
Q: Can the program funds be used to pay realtor commissions? - Answer
A: No, the funds are strictly for down payment, closing costs, pre-paid items, and principal reduction. Should the buyer choose to pay a realtor commission, they will have to do so from their personal funds.