Effective 6/22/09 , the $8,000 first-time homebuyer tax credit can be used as down payment on an FHA loan. Below are some highlights of the program.  Please note there is only a limited amount of funds, $5 million.  It is first come first serve and when its gone its gone.  Please let me know if you have any questions or if you would like any flyers.

Program Overview

In an effort to monetize the $8,000 tax credit and to assist borrowers with down-payment and closing costs, TDHCA created the 90-Day Down Payment Assistance Program.

In accordance with FHA Mortgagee Letter 2009-15 dated May 29th, 2009, TDHCA has the authority to offer tax credit advances with second liens.

90-Day Down Payment Program may be used with FHA 15 & 30 year fixed rate first lien mortgage loan.

Qualified and Eligible Borrowers

· Borrowers must meet the federal first time homebuyer requirements

o First time homebuyers purchasing a home – new or resale that will be used as a principal residence.  Includes single family detached homes, attached homes like townhomes and condominiums.

o First time homebuyer is a buyer who has not owned a principal residence during the 3 year period prior to the purchase.  For married taxpayers, the law tests the homeownership history of both the home buyer and his/her spouse.

o Home purchase must occur on or after 01/01/09 and before 12/01/09.  The purchase date is the date when closing occurs and the title to the property transfers to the homeowner.

o Income limit for single taxpayers is $75K; the limit is $150K for married taxpayers filing a joint return.


  • Min credit score of 620 is required.

Subordinate DPA Funds and Terms

  • Funds Available:
    • $5 Million, First come First Served
  • Amount of Assistance Available:
    • 5% of the total mortgage amount including MIP up to a maximum of $7,000
  • First 90 Days
    • 0% Interest Rate (encourage borrowers to payoff 2nd lien with tax credit refund)
    • Thereafter, 2-Year term at 10% interest rate
  • Max CLTV
    • 100%.

Filing Amended IRS Returns

Borrowers wishing to amend their 2008 IRS tax return may do so utilizing the following forms:

o IRS Form 5405 – First Time Homebuyer Credit

Provides general instructions and identifies who can or cannot claim the credit

o IRS Form 1040X – Amended U.S. Individual Income Tax Return

Allow 8-12 weeks for processing

o Additional Resources: $8,000 Homebuyer Tax Credit At A Glance