My company is an approved participating lender in the TDHCA MY FIRST TEXAS HOME program. Do I need to have approval to access the new unassisted bond option for my borrowers/clients?
No
, if your lending institution is currently approved as a participating lender in the My First Texas Home program, you do not need additional approval to offer the new unassisted option.
What are the guidelines and eligibility requirements for the unassisted bond option?
The unassisted low-rate option follows the same guidelines as any other option under the My First Texas Home program. Homebuyers who meet the following minimum requirements are eligible to apply for a loan under the program:
Can the borrower get a mortgage credit certificate (MCC) with the unassisted bond option?
No
. The unassisted bond option cannot be combined with
any
MCC program.
How much funding is available for the unassisted bond option?
Approx.
$29 million
has been allocated for the unassisted option. Once funds have been fully allocated, the option will be suspended until additional bond funding can be released. The interest rate associated with each allocation of funds will be subject to change (based on bond market and bond pricing).
Does the unassisted bond option include down-payment/closing cost assistance?
No
. This option is "
un
assisted", meaning there is no assistance provided to the borrower for down-payment or closing cost. The benefit to the borrower is the below-market interest rate.
What fees apply to the unassisted bond option?
The same fees apply to the unassisted bond option as the "assisted" option. The fees are as follows:
- $225 Compliance Fee (payable to eHousingPlus)
- $150 Loan Review/Purchase Fee (netted out of purchase)
- $59 Tax Service Fee (netted out of purchase)
Does my company make an less or more on the unassisted bond option?
As with any TDHCA My First Texas Home option, our lender partners are compensated at loan purchase through a service release premium (SRP) of
2.75%
.
What is the delivery/purchase timeline of the unassisted bond option? Is there an option to extend the loan?
The loan must be purchased within 60 days of reservation. If a loan exceeds the 60 day expiration, loans will be considered for purchase but may incur an extension fee (same fee structure as all other My First Texas Home loan options).
How do I reserve a loan under this option? Are there special forms or documents that are unique to the unassisted bond option?
There is no change in process or forms with this option. Loans will be reserved in the
eHousingPlus lender portal
. The forms currently used on the "assisted" bond option will also apply to the "unassisted" bond option, with the exception of the 2nd loan documents (since there is no assistance).
Note:
All BOND options include the
Tax-Exempt Financing Rider To Mortgage
form that
must
be attached and recorded with the 1st Deed of Trust
).
What is Recapture Tax and does it apply to the unassisted bond option?
In 1989, a federal law was passed which provides for a "recapture tax” on the gain from a borrower's sale of a residence financed with a Mortgage Revenue
Bond
(MRB). This provision is administered by the Internal Revenue Service (IRS). When a borrower receives a Mortgage Revenue
Bond
(MRB) loan
or
a Mortgage Credit Certificate (MCC), they are receiving the benefit of a federal income tax credit. The law mandates a “recapture” of some of the benefit of the program that is not customarily available with other mortgage loans.
YES
, because this is a BOND loan, the IRS Recapture Tax Provision will apply. The borrower
MAY
be subject to Recapture Tax
IF
certain criteria of the provision are met.
ALL 3 conditions/criteria must be met for the tax penalty to be considered.
More information on Recapture Tax can be found on the TDHCA website -
http://www.tdhca.state.tx.us/homeownership/fthb/docs/RecaptureBrochure.pdf.
