State housing agency enters into $20 million loan agreement to provide qualified homebuyers with down payment and closing cost assistance

Favorable loan terms offer enhanced financing options statewide

(AUSTIN) — Prospective, lower-income first time homebuyers in Texas now have an additional resource to help with down payment and closing costs. The Texas Department of Housing and Community Affairs (“TDHCA”), Texas’ only State housing finance agency, recently entered into a $10 million loan agreement with Woodforest National Bank® to address the need for low-cost homebuyer assistance funds.

“The favorable terms of this note allow TDHCA to leverage existing funds and to expand financing options available to lower income homebuyers in Texas,” said TDHCA Executive Director Tim Irvine. “This loan agreement was a key factor in reducing TDHCA’s first mortgage loan rate by approximately .375 percent. This is a tremendous savings to those who have steady incomes but, due to the challenges of rising rents and student loan payments, could use a little help in achieving the dream of homeownership.”

The loan agreement will fund down payment and closing cost assistance in conjunction with approximately $250 million in first lien mortgage loans and $10 million in 30-year, zero interest, second lien mortgage loans that are due on the earlier of sale, refinance, or maturity of the first lien mortgage loan.

This loan agreement demonstrates TDHCA's and Woodforest National Bank's commitment to give back to the community. The response has been overwhelmingly positive. Since Oct. 1, 2016, TDHCA has seen twice the amount of average daily reservations for homebuyer assistance funds compared to the most recent 12 months of activity.

The Department's need for a source of low-cost down payment assistance funds, combined with Texas based Woodforest National Bank's goal of being a catalyst of change in the communities it serves, has resulted in this ground-breaking public-private partnerships in the area of single-family housing finance.

"Down payment assistance is one of the biggest needs for very low, low, and moderate income homebuyers," said Woodforest National Bank Executive Vice President Doug Schaeffer. “Woodforest National Bank is thrilled to partner with TDHCA on this innovative opportunity to directly increase home ownership in our Texas communities.”

About The Texas Department of Housing and Community Affairs

The Texas Department of Housing and Community Affairs is committed to expanding fair housing choice and opportunities for Texans through the administration and funding of affordable housing and homeownership opportunities, weatherization, and community-based services with the help of for-profits, nonprofits, and local governments. For more information about fair housing, funding opportunities, or services in your area, please visit www.tdhca.state.tx.us, or the Learn about Fair Housing in Texas page.