Buying a home can be affordable thanks to a partnership between the El Paso Housing Finance Corporation and local home mortgage lenders. Home buyers in the El Paso program area have a chance to own a home of their own with down payment and/or closing cost assistance. Here are the details, but you should go directly to one of the participating lenders to apply. You do not have to come to City Hall to apply.
Requirement: Mortgage loans must be made available to first-time homebuyers (defined as no ownership in the previous 3 years). No first-time homebuyer requirement for targeted area loans or qualified veteran.
Recapture Tax: Borrowers may be subject to a Federal recapture tax if the home is sold within 9 years of the mortgage loan closing.
Purchase Price Limits:
New or Existing Residences
Frequently Asked Questions – Contact a Lender for Details
Q. What do I get with a 2013 HFC Downpayment Assistance Loan?
- Low, fixed interest rate
- 4% in down payment & closing cost assistance (e.g. on a $100,000 loan, you would receive $4,000 in assistance).
- 30 year term on a government (FHA or VA) mortgage loan
Q. What are the qualifications?
- You need to occupy the home as your principal residence
- You need to have adequate income and credit to qualify
- Your income & purchase price cannot exceed limits in box above
- Your home must be located within the El Paso City limits
- You may not have owned a home in the last 3 years – This requirement does not apply to purchases in Target Area.
Q. How do I apply?
A. Call or visit one of our participating mortgage lenders in person:
- Rocky Mountain Mortgage - 791-4140 / 791-4150 / 791-4170
- Patriot Mortgage - 757-9500
- Pioneer Bank - 782-2400
Q. How do I qualify for an HFC-assisted home purchase?
A. In addition to certain standard qualifications for a mortgage loan, you have to meet eligibility guidelines. These are:
- Borrowers must not have owned a home in the last three years or must be first-time homebuyers. This requirement does not apply to the Federal targeted areas or in the case of an owner of a mobile home that was not permanently affixed to the ground.
- Borrowers’ income cannot be more than the maximum income limits listed above.
- Value of home purchased may not exceed specified limits listed above.
Q. What qualifies as “income"?
A. Current annualized family income as determined in accordance with the Internal Revenue Code as filed on form 1040, 1040A or 1040 EZ. Basically, it is the annualized sum of the current gross monthly income of the mortgagor(s) and anyone living in the residence that is over 18 years of age. See a participating lender for details.
Q. What about credit requirements?
A. Borrowers must meet mortgage program credit requirements (see a lender listed below for details) and demonstrate the ability to repay their loan. Generally, buyers should not have any bankruptcies in the past two years, no outstanding judgments or delinquent accounts, be able to document income, and must meet certain credit scoring minimums. Please call a lender for details, as there is some flexibility in these guidelines.
Q. How long do I have to occupy the property?
A. You have to occupy the property as your principal residence for as long as the original loan is outstanding. The homebuyer must occupy the residence as his/her primary residence until the loan is paid in full (payoff, refinance, sale of property, etc.). Under IRS Tax Code, the homebuyer is not allowed at any time to rent property financed with bond proceeds. The rules state that if the subject property ceases to be the homebuyer's primary residence for a period of more than one year, the homebuyer cannot claim the mortgage interest deduction for that year on his/her tax return. Selling your home prior to the expiration of 9 years may subject you to income tax consequences on any gain on the sale. Again, see your lender for details.
Q. Can I buy a home anywhere?
A. No. Homes must be located within the boundaries of the City of El Paso, Texas and cannot exceed the maximum purchase price listed.
Q. How do I get a loan?
A. When you’ve found a home that is within the program guidelines for price and location, simply apply for a loan at one of the participating lenders and mention to them that you are interested in HFC down payment assistance. Or, go to a lender first and get pre-qualified for a loan. You will then know what your home purchase budget is. You do not have to come to City Hall to apply. Go directly to one of the lenders.
Q. Where are the Targeted Areas located?
A. The map below gives some indication of where the Targeted Areas are, but talk to your lender or REALTOR® to verify. The Federal Government requires us to apply the funds to specific areas that are identified by census tract, not always the same as ZIP code. It can be a little confusing! The REALTOR® Info Page of this web site has some tools that will help you to identify the Targeted Areas, including census tract maps that you can download. [Map of Targeted Areas]
Q. Are there upfront fees and closing costs that borrowers have to pay under this program?
A. Yes, as is the case with any mortgage origination. However, they are reasonable and lenders have agreed to follow HFC guidelines for these. Also, you can finance some of these fees in the mortgage principal or apply the HFC assistance grant, toward them, as well. Talk to a lender for details.
Q. Can I use HFC funds to purchase a rental investment property?
A. Mortgages under the program are for owner-occupied property only. However, you can purchase a two, three, or four- unit property as long as you occupy one of the units as your principal residence and you stay within HFC guidelines for total purchase price.
Q. Are certain properties not allowed under the HFC program?
A. Rental homes, vacation properties, co-ops, second homes and mobile homes that are not permanently affixed to the ground are not allowed.
Q. Does the additional down payment assistance have any tax consequences?
A. There could be “recapture” consequences, especially if you sell the home within certain time frames. Talk to your lender or an accountant for details.