Common Q&A about Odessa down payment assistance

Most common Q&A about the Odessa Down payment assistance program per the Odessa City website.

Do I have to be a current resident of Odessa?
No, you do not have to be a resident of Odessa; however, the assistance is only available to households looking to purchase a home within the city limits of Odessa.
Can I buy a home in Midland?
No, the home can only be purchased within the city limits of Odessa.
Will I have to pay a mortgage?
Yes, our program only offers down payment and closing costs assistance. The applicant would be responsible for paying the mortgage every month.
What if I already own a home? You home is an asset and our program takes into consideration assets in determining income. A percentage of the home's appraised value would be counted as income. Also, if you do not plan to sell the home but rent it out, we would also calculate separately the amount of rent you would collect as income.
Does my credit score matter? Yes, your credit score will matter. Applicants will have to apply at one of our three lenders for a mortgage loan; your credit score, credit history, and income will help the lender determine if you are eligible for the loan and the loan amount. If you are unsure of your credit score and history it would be in your best interest to visit Odessa Affordable Housing, Inc. (OAHI). OAHI will pull your credit report for a small fee and help determine whether you are ready to approach a lender for a mortgage loan.  
The bank that I go to is not on your list of approved lenders. Is there any way that I could still receive the assistance but have the mortgage with my regular bank? There are certain requirements that the banks must agree to in order to be a part of the program. We are always interested in expanding our list of participating lenders, and most banks have been contacted at some point in the past. We have a brochure that lists the details of the program for lenders, and we can provide this to you to share with your bank's mortgage officer. If they agree to participate in the program, we will have them sign our Letter of Understanding, and then you could have your mortgage with this bank.  
What if the house that I choose costs $105,000?
The homebuyer assistance program has a cap for the sales price of the home that applicants receiving our assistance can purchase. Currently for existing homes the sales price cap is $85,000 and for new construction $95,000.
Do you provide a list of eligible homes or do I work with a realtor? No, we do not provide a list of eligible homes. Approved applicants would need to work with a realtor to find a home in Odessa.  
What happens if I choose a home that needs a lot of repairs? The seller will need to agree to making the needed repairs before we will assist the homebuyer with the purchase of the home.  
What if the home has evidence of lead-based paint? The seller will need to be willing to have a lead-based paint conducted before we will assist the homebuyer with the purchase of the home. In the event that paint test positive for lead, the seller will have to agree to have the lead paint treated by a licensed lead-contractor. Depending on the severity and location of the lead paint, this can be expensive and the seller may not want to do this. In the case that the seller does not want to correct the lead paint issues we will not assist the homebuyer in the purchase of that home.  
Can I use the assistance to purchase a mobile/manufactured home?
Unfortunately, mobile and manufactured homes are not eligible properties.
How often will I have to report to your office? All assisted applicants will be required to report on an annual basis, typically on the anniversary month of the assistance. For those who purchased existing home they will be required to report annually for five years. For those who purchased a new home, they will report annually for ten years. How long is the Homebuyer Education Course that I must attend to receive the assistance?
The total course is 8 hours. Odessa Affordable typically breaks this up into two, four (4) hour sessions. Both of these sessions are held during business hours. All adults that plan to live in the house must attend this course.
What if I do not have a bank account?
Applicants who do not have a checking or savings accounts will be required to sign an affidavit certifying that the information is true. However, if it is found that the applicant reported false information than the applicant will be disqualified for receiving assistance.
What if I did not file my tax returns last year?
It depends on the reason for not filing your tax returns. Were you considered exempt from filing according to the IRS definition? Or did you just forget to file? In the case of the latter situation, you would be required to file before we could give a final approval on the application. In any other situation the applicant would be required to sign an affidavit certifying that they did not file their taxes for legitimate reasons.
Will I have to income qualify every year?
No, you will only need to income qualify for the initial approval. However, if you know that you or any  member of the household will be receiving a substantial increase of income, that should be reported with the application.
Can I be approved if I am not current on my child support payments?
Yes, so long as you can show proof that you are making payments. Request a payment history from the Attorney General's office.
What if I am suppose to receive child support but I don't receive those payments?
We understand that this happens. However, please bring proof that the absent parent is to provide you with child support. This information can be obtained from the Attorney General's office.
I don't want to file for child support, am I still eligible?
No. This is possible additional income that is due to the household for the children involved. This additional income may cause an otherwise eligible applicant to become ineligible.

Why the MCC Tax Credit is awesome

Ever since the seller paid down payment assistance programs went away, federal grant programs have become extremely popular. One program that folks are really not taking advantage of is the MCC tax credit. A lot of lenders don't offer it because it doesn't make them any money and it's just extra work for the loan officer without any compensation. This is a pretty awesome program that I think everyone should be getting in my opinion. If your purchasing a home in Odessa, ask your lender to add an MCC to your loan.

 What is it?

The MCC is a yearly tax credit that you can use at the end of the year when you do your taxes. Basically, the homeowner can use a portion of their interest that has accrued during the year and use it as a tax credit. This is the same tax credit that somebody would get if they had a child or other government tax credits that people receive.

The amount of the tax credit will typically vary depending on the home loan amount but on average you can get back %20 of the interest that you paid during the year. So for example if you paid $6,000 in interest during the year and you qualified for a 20% tax credit, that means you'll get a $1,500 tax credit at the end of the year. You can use this money to offset any taxes owed. Most MCC programs will have a $2,000 yearly cap. Don't confuse this with just a standard tax write-off. This is an actual credit that can be used to offset any tax liabilities. You can use the MCC for the life of the loan but keep in mind that as the years go by, you pay less and less interest and in result your tax credit will decrease as well. Not the worst thing in the world considering that means your getting closer to paying off your house though.

If we really break it down, by getting back a portion of the interest that you pay during the year, we can argue that it's beneficial to use a lender who is offering an MCC even if they have a slightly higher interest rate than the bank not offering it. At the end of the year, the MCC really acts as a reduction of interest, therefore you can look at it just like a reduction of your interest rate.

Odessa Texas First-time Home Buyer Programs

Down Payment and Closing Cost Assistance for Odessa residents

Program#1

Along with a 30 year fixed FHA loan, the home buyer program offers down payment and closing cost assistance to qualifying low-income residents looking to purchase a home in Odessa. For existing homes we provide 5% or 10% down payment assistance and up to $3,500 in closing costs assistance for homes less than $95,000. The program also offers down payment assistance on a sliding scale based on family income with up to $4,000 in closing costs assistance for any newly built home within city limits that has a sales price of less than $120,650.

Program#2

TDHCA - 30 year fixed FHA loan plus a 5% grant to pay for down payment and closing costs. Home buyer must be a first-time home buyer and a resident of Texas. The borrower must also meet certain income requirements. The grant does get added as a 2nd lien but does not need to be paid back until the home is refinanced or sold. No interest is accrued so the lien amount never changes. 

Program#3

TSAHC - 30 year fixed FHA, USDA or VA loan along with a 3% or 5% grant to cover down payment and/or closing costs. The grant does NOT need to be repaid. Previous home owners and first-time buyers are welcome to apply. This program is targeted towards public service officials and low income individuals. Please take a look at the list below to see if your occupation fits into the program.

• Public classroom teacher;
• Full-time public teacher’s aide;
• Full-time public school librarian;
• Full-time public school counselor;
• Full-time public school nurse; or
• Allied Health or Professional Nursing Program faculty member
• Fire Fighter
• Corrections Officer or Juvenile Corrections Officer (this includes any employees of the Texas Department of Criminal Justice or Texas Juvenile Justice Department that receives hazardous duty pay)
• County Jailer
• Public Security Officer