Real estate in texasJULY. 24, 2009
A $68,000 credit on a home? Seriously?By MARTY KRAMER, Consumer columnist

No, it’s no joke. As a first-time homebuyer with a moderate income, you may be able to save $68,000 on a home. That’s $8,000 on the purchase and $60,000 over the life of a 30-year loan. Let that sink in for a minute, but not too long, because there’s a deadline to beat. First, the federal government is offering an $8,000 tax credit to most first-time homebuyers who purchase a home by Nov. 30, 2009. Even better, the Texas Department of Housing and Community affairs has two new programs that allow you to use most of that credit as a downpayment or for closing costs. Without these TDHCA programs, you would have to wait for a refund on your income tax return (or rebate if the credit exceeds your tax liability). By the way, if you and your spouse haven’t owned a primary residence in the past three years, the government considers you a first-time homebuyer.
The TDHCA programs to “monetize” the federal tax credit will make a big difference for many Texans. Coming up with the money for a downpayment and closing costs is one of the steepest challenges many people face when buying a home.
What about the $60,000? Another program offered through the TDHCA gives many homebuyers the ability to save up to that amount over the life of a loan. The Texas Mortgage Credit Program is available to first-time homebuyers who earn up to 115% of their area’s median family income. In certain targeted areas, the first-time buyer requirement is waived and the maximum income level is higher. The first-time buyer requirement is also waived in a similar program for military veterans.
The program allows participants to receive 30% of their annual mortgage interest payments back as a federal income-tax credit, up to a maximum of $2,000 per year, as long as you maintain your home as a primary residence.

You’re thinking there must be a catch. I’ll lay out everything I can think of: 1) When you get to the later years of your loan, you may not qualify for the maximum $2,000. That’s because more of your payment goes toward lowering the principal of your loan rather than paying interest. You also might not qualify for the maximum $2,000 a year on smaller loans; 2) The credit cannot be larger than your tax liability; 3) If you itemize your taxes, you cannot deduct the amount of the credit from your taxes. Keep in mind, though, that the tax credit will save you more than a tax deduction of the same amount; 4) There are up-front fees of $75 and 1% of the loan amount; 5) You must take a homebuyer education course to participate in this program.
I see the last point as a benefit, actually. The TDHCA wants homebuyers to understand the commitment involved in purchasing a home. This class is intended to give you the information you need to stay in your home.
So, yeah, when all is said and done, you may not realize $68,000 in savings. But what if it’s “only” $59,383 or $37,019 or even $17,556? What if you “merely” save $8,000 and get a hefty head start on a downpayment? If I weren’t already a homeowner, I would’ve been on the phone with my Texas REALTOR® the minute I heard about this.