The Killeen First Time Homebuyer Program with Down Payment Assistance

Takeaways

Consider using the Killeen Homebuyer Assistance Program if you are a first-time homebuyer in Killeen!
You still have to qualify for a loan, but you can get some of the costs paid
Start here first if you’re a first-time homebuyer

Benefits

The Killeen Homebuyer Assistance Program (HAP) provides up to $7500 toward low-income buyers’ downpayment and/or closing costs.
On a case-by-case basis, there may also be funding available to make repairs on homes.

Most program users probably would use the FHA loan, which has a minimum 3.5% down payment. That is $3500 for a $100,000 home and would be entirely covered under the program if eligible.

If you can use the VA loan, then why would you need the HAP program? Well, it is common in our area that sellers pay closing costs – but that’s negotiable. It is possible that VA home buyers, even with no down payment, will still have closing costs. Sometimes $1000s.

What if you don’t use the whole $7500? Well, that’s that. Killeen, provides only what is necessary to cover your down payment and closing costs so there is money to help more buyers!

Contact

Donna Esquenazi
(254) 501-7844
Executive Assistant

Cinda Hayward
(254) 501-7845
Community Development Administrator

killeen1sthomebuyers@killeentexas.gov

killeentexas.gov/hap

Eligibility

Generally, you must have a high enough income to qualify for a loan, but low enough to qualify as “low-income”. You must be planning to live in the house for at least 5 years. You also must attend the Killeen classes in person before purchasing, as well as use a Realtor and lender who has been approved by the program.

Owner occupants only. If you move from the house prior to living there a full five years, you will be responsible for repaying a prorated amount of the amount you used toward the home.
The home must be located in Killeen, TX. No Harker Heights or Copperas Cove.
Must be a legal resident/citizen of the United States
Must meet credit standards and qualify for a traditional loan
Cannot have owned a home in the past three years
Monthly mortgage payment cannot exceed 30% of your gross monthly income, and total monthly debt payments (car, credit card, student loans) including the mortgage cannot exceed 43% of your gross monthly income
Must contribute at least $500 toward the home as earnest money
Must attend 8 hours of homebuyer education classes – 5 before purchasing and 3 after closing
Must use a HAP certified Realtor and mortgage lender
Must have minimum cash reserves as required by the lender
Lender preapproval letter with a lender qualified with the program
Must have an annual gross income within the range of the program limits, depending on the number of dependents (check with the Program Coordinator for a current income limit table)

Repairs and Inspections

The program is very strict about the quality of the property you purchase – even more so than the VA loan. The home must meet code.

This is both good and bad. Some homes may not qualify that are otherwise in good condition that you like. But it also means the city will not let you buy a lemon, and in some case help you with the cost to repair the home.

You are always highly encouraged to do an inspection. The city will also send their own housing specialist to perform a code inspection. Repairs or deficiencies are still negotiated like normal, but again, it is possible that the program can pay for some items if the seller won’t remedy them.

Realtors and Lenders

The buyer must use a Realtor and a lender who has been through the program themselves. They must also use and qualify for a traditional mortgage product like a conventional, FHA or VA loan. The program is not necessarily a fit for buyers with bad credit or no income. You must still be able to qualify for a loan.

Looking for a HAP approved Realtor? Look no further!

Process

The process of purchasing a home is the same as everyone else, with just an additional few steps.

After talking to a lender and a Realtor, you submit the application packet to the program coordinator. Once reviewed and approved, the office will issue you a HAP Allocation Letter, which will officially confirm your eligibility.

Example documents you will need for the application are:

Drivers license or ID
Social Security Number
Certificate from Homebuyer Course within the last 12 months
Mortgage Approval Letter from the Lender
3 Years Tax Returns
Pay Stubs – Last 3 Months
Bank Statements – Last 3 Months
Credit Report

Once the letter is in hand, it’s time to go buy a house!

NOTE: In the contract, you must have the following written in: “This contract is subject to the City of Killeen First Time Homebuyer Assistance Program”. You also are encouraged to successfully negotiate for the seller to pay up to 5% of the sales price toward closing costs, as well as secure the first year of a home warranty. Finally, you also must include the Notice to Real Property Owner/Seller as part of the contract.

There are additional steps like coordinating the housing specialist to inspect the home, but most of the steps are identical to purchasing a home conventionally.

FAQ

Can I purchase a mobile/modular home with the program?

No.

Can I buy a multi-family home, like a fourplex or duplex, with the program?

No.

Can I buy a new construction home from a builder?

Yes.

Can I use this program if I am already under contract to buy a home?

No. You must go to the training, use a certified Realtor and lender, and get your allocation letter prior to executing a contract to purchase a home.

Is it for first-time homebuyers only?

Sort of. You cannot own a home currently, or at any point in the last three years. You can still use the program if you owned a home prior to three years ago.

Where does the money come from?

The money is appropriated by Congress to the Department of Housing and Urban Development to be used to assist low-income Americans to achieve homeownership.

How do I schedule the 5 hour First Time Home Buyer Course to get started?

Contact the Killeen Program Coordinator, Donna Esquenazi, (254) 501-7844 or killeen1sthomebuyers@killeentexas.gov. Courses are scheduled regularly at the Killeen Arts and Activities Center at 802 N 2nd St., Killeen, in Building E on the 1st floor (next to Head Start).

Where can I get more information?

LEARN MORE

Other Programs

Killeen’s HAP is not the only homebuyer assistance program Check out these others as well:

Conclusion

If you are a First Time Homebuyer with modest means, consider the Killeen First Time Homebuyer program! Don’t put off the American dream of homeownership any longer.