City of Plano’s First Time Homebuyers Assistance and Educational Program

Program Name: City of Plano’s First Time Homebuyers Assistance and Educational Program (FTHB)

Funding:

• Funded by US Department of Housing and Urban Development (HUD) through Community Development Block Grant (CDBG) and HOME Investment Partnerships Program (HOME)

Purpose:

• Designed to assist eligible low and moderate income households in buying a home in Plano
• Provides down payment and closing costs assistance in the form of deferred payment loans

Eligibility:

• Must not have owned a home in the last three years
• Total household income must be 80% or less of the area median income
• Must be a US citizen or a permanent resident alien
• Main borrower must be employed for at least one year
• Must attend an eight-hour First Time Homebuyer class held by the City
• Must receive housing counseling by HUD approved agency
• Cash assets must be less than $36,000 (excluding retirement accounts)
• Homebuyer(s) and spouse(s) must have a minimum credit score of 620
• Spouse and/or co-borrowers without a credit score may be eligible with non-traditional credit history (minimum of three creditors) and no more than two 30-day late payments in the previous 12 months
• Any judgments must be paid off, and any bankruptcy must have been discharged for at least two years and good credit re-established
• Must contribute a minimum of $1,000 toward the down payment or pay for closing costs
• Debt ratios should not exceed 31% on the front end and 43% on the back end of gross monthly income for homebuyers with a credit score between 620 to 699 and/or the homebuyer with a spouse and/or co-borrower without a credit score
• Homebuyers with a credit score of 700 or higher may increase their debt ratio up to 36% on the front end, 45% on the back end of the gross monthly income, but must have a 3-month cash reserve
• Must be approved by an in-house underwriting process

Income Limits by Family Size:

• Option 1: CDBG funding, up to $10,000, 0% interest, deferred, forgivable loan, second lien position with a 5-year affordability period
• Option 2: HOME funding, up to $55,000, 0% interest, deferred, forgivable loan, with a 15-year lien on the property

Property Criteria:

• Home must be decent, safe, sanitary, in good repair, and meet the City of Plano’s minimum housing standards and all applicable codes
• Must be a single-family home, townhouse, or condo; manufactured home is ineligible
• Must be located in the city limits of Plano
• Must be insurable and free from hazardous living conditions
• Must meet federal Environmental Protection Agency (EPA) regulations, including lead-based paint testing, and federal relocation regulations
• Must be vacant or occupied by Seller
• Properties built before 1978 are subject to a visual lead paint inspection and are not to have cracked or peeling paint that exceeds HUD guidelines

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