The First-Time Buyers Guide To Understanding What Program Is Right For You

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Types of Loan Programs that Rock Mortgage Offer’s:

With all of the loan choices out there it can be very confusing and intimidating for the average consumer to pick a loan that best fits their needs. Below you will find a list of the most common loans that we, at Rock Mortgage, make in Texas: (All of these programs are available for first time buyers with the exception of certain Jumbo products)

Conventional Loans

Loan approved form

(Fannie Mae/Freddie Mac) – this is the most common loan in the U.S., the most common term is 30 years, but 20- & 15-year options are available. A common misconception is that conventional loans require 20% down, that hasn’t been the case for over 30 years. If you aren’t putting 20% down, you’ll be required to carry P.M.I (Private Mortgage Insurance), normally that premium is added to your monthly payment and you’ll pay it monthly until you reach 20% equity or when your loan balance reaches 78% of the original sales price. We do have options that will allow you to pay the entire policy in advance or we can buy it out by increasing your interest rate. If you are a first-time home buyer you may qualify our Home Ready or Home Possible (3% down, discount rates and P.M.I) programs (see the link to both programs near the bottom of the blog)

A – Credit Score requirement 640+

B – Down payment requirement 3% – 20% (3% is reserved for first time buyers only)

C – Max loan amount for this region is $548,000 (as of 01/01/2021)


FHA Loans

(Government Loan), this is a loan that is guaranteed by the Federal Housing Administration, and it’s a great choice for first time home buyer with lower credit scores or consumers with a higher debt to income ratio. FHA is also more forgiving on Bankruptcies (2 years) & Foreclosures (3 years). The biggest difference with FHA Vs. Convention is the M.I.P (the government’s version of P.M.I), you will pay an upfront premium equal to 1.750% of your loan amount (this is typically rolled into your loan amount) and a monthly premium of .80% – .85% of your original loan amount. Unlike Conventional the M.I.P (FHA’s version of P.M.I) this monthly premium never goes away, the only way to get rid of the M.I.P is to refinance to a Conventional loan. The other benefit that an FHA Loan provides is a very low rate, many times the FHA rate is lower than Conventional regardless of score. The government supplements the rates so the payments are manageable.

A – Credit Score requirement 580+ (this score can vary by lender)

B Down payment requirement 3.50%

C – Max loan amount for this region is $356,36

Jumbo Loans

(Portfolio Loan) Unlike Conventional or FHA loans that are considered mortgage backed securities and are regulated by the federal government, a Jumbo loan is considered a portfolio product. This means that there are no universal guidelines, each lending institution writes their own guidelines, as long as they follow state & federal usury laws the lender can do anything they want. Jumbo loans are loans that exceed the max lending limit for that region, in our case it would be any loan amount that exceeds $548,000. Because the lending institution doesn’t have any reps or warrants (like Conv & FHA loans do), the guidelines are more restrictive than any other loan program we offer. Typically, these loans require a much stronger borrower with a min of 20% (or more) down and many exclude first time buyers. They also typically come with a higher interest rate and usually require a discount/origination point(s). This is by far the most difficult loan to qualify for, they have tighter debt/income ratios and are reserved for experienced borrowers.

A. Credit Score requirements 740+real estate concept

B. Down payment requirements 20% – 25%

C. Max loan amounts vary by lender but are normally $3,000,000 or less.

Eligibility Criteria:

When it comes to helping first-time home buyers achieve their dreams of homeownership, we want to ensure transparency and clarity in our eligibility criteria. To qualify for our loan programs designed exclusively for first-time buyers, please take note of the following key requirements:

  1. First-Time Buyer Status: To be eligible for our first-time home buyer loans, you must not have previously owned a residential property. This includes not having had any ownership stake in a primary residence within the last three years.
  2. Credit Score: While credit score requirements may vary depending on the specific loan program, a fair to good credit score is typically required. However, we understand that everyone’s financial situation is unique, and our experienced mortgage professionals can work with you to explore options if your credit score is less than perfect.
  3. Income Verification: You’ll need to provide proof of a stable and sufficient income to support the mortgage payments. Income requirements may vary based on the loan program and the cost of the home you intend to purchase.
  4. Down Payment: Most of our first-time buyer programs offer competitive down payment options, and some may even provide assistance with down payment and closing costs. Be prepared to discuss your down payment preferences and financial capabilities during the application process.
  5. Debt-to-Income Ratio: Lenders typically consider your debt-to-income (DTI) ratio, which compares your monthly debt payments to your income. A lower DTI ratio is generally more favorable for loan approval.
  6. Residency and Citizenship: You must be a legal resident or citizen of the United States to qualify for our loan programs.
  7. Completion of Homebuyer Education: Some of our programs may require first-time buyers to complete a homebuyer education course to ensure you are well-informed about the homebuying process.
How to Qualify for Homebuyer Assistance in Texas

To become eligible for first-time homebuyer assistance programs in Houston and throughout Texas, you must typically meet the following requirements:

  1. Lender Selection Matters: It’s crucial to choose the right lender when utilizing these programs. Only specific lenders are authorized to facilitate loans in conjunction with these programs. Rest assured, we have a trusted lending partner with expertise in these programs. Feel free to share this valuable information, and to learn more, contact us via phone or email. We’re here to help and guide you through the process.

Down Payment Assistance Programs Available:

  • Harris County Down Payment Assistance: This program offers a $14,200 grant for first-time home buyers looking to purchase a home in Harris County, outside of city limits.
  • Housing Assistance Program “H.A.P.”: Qualify for a $19,500 grant if you’re a first-time home buyer purchasing a home within the City of Houston, with income at or below 80% of the area median income.
  • Houston HOPE Program: For those seeking homes in Houston’s historic communities, this program provides a generous $30,000 first-time home buyer grant.
  • Workforce Housing Program: If your income falls between 80% to 110% of the area median income, you could be eligible for a $30,000 grant as a first-time home buyer in the City of Houston.
  • HOME OF YOUR OWN “HOYO” (Montgomery County): Outside the city limits of Conroe in Montgomery County, you can receive a $14,500 grant when purchasing a new home.
  • City of Pasadena “SETH”: First-time home buyers in the City of Pasadena can benefit from a $5,000 grant towards their home purchase.
  • SETH Single Family Bond: In Southeast Texas, first-time buyers can qualify for 3% down payment assistance with a fixed 5.25% mortgage rate. This covers areas like Austin, Brazoria, Chambers, Liberty, Matagorda, Waller, Walker, Wharton, and select cities.
  • Mortgage Credit Certificate Program “MCC”: First-time home buyers can enjoy an IRS Tax Credit of up to $2,000 every year for the duration of their home loan.
  • Texas Veteran’s Mortgage Credit Program: Military veterans with an Honorable Discharge can receive an IRS Tax Credit of up to $2,000 each year throughout their home mortgage, and no first-time home buyer requirement is imposed.

Please note that a minimum credit score of 640 or higher is typically required for all these programs. Don’t hesitate to reach out for further details and assistance in navigating these opportunities. Your path to homeownership in Texas is within reach!

Please note that these eligibility criteria are intended as general guidelines, and specific requirements may vary based on the loan program and the lender’s policies. We encourage you to reach out to our dedicated team of mortgage experts who will be happy to discuss your unique situation and guide you through the application process, making your path to homeownership a reality!

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The First-Time Buyers Guide To Understanding What Program Is Right For You | Rock Mortgage — Houston, Texas

Jamie Ayala

Jamie Ayala

Jamie Ayala has been working as a Loan Processor at Rock Mortgage for more than 4 years. As a knowledgeable account executive he has had many years of customer service experience in the loan, information technology, and political industries. Recognized for demonstrating a natural aptitude for working with cross-functional teams, as well as for meeting deadlines and validating loan documents, Jamie has a verifyable history of consistently exceeded sales and performance goals. His professional focal points include loan processing, client negotiations, team collaboration, and project management.