1. (a) First-time homebuyer program eligibility requirements. To be eligible for any assistance under the program a first-time homebuyer must:

   1. (1) qualify as a first-time homebuyer;
   2. (2) be able to sign at loan closing an affidavit of eligible borrower; and
   3. (3) apply with respect to a home whose purchase price does not exceed the maximum purchase price limit for the relevant area, and is either a new or existing single family residence, new or existing condominium or town home, or manufactured housing that has been converted to real property in accordance with the Texas Occupations Code Chapter 1201.
2. (b) Types of assistance available. Depending on the applicants' income, a first-time home buyer that applies for a loan under the program may also be eligible for down payment and closing cost assistance or mortgage credit certificates. Down payment and closing cost assistance or mortgage credit certificates may be awarded only in conjunction with an application for a mortgage loan.
3. (c) Income limits for loans. First-time homebuyers applying for a mortgage loan or a mortgage credit certificate must have an income of not more than 115 percent of area median family income or 140 percent of area median family income in targeted areas.
4. (d) Income limits for down payment and closing cost assistance. First-time homebuyers applying for down payment and closing cost assistance in conjunction with a mortgage loan must have an income of not more than 80 percent of area median family income.

5. (e) Application Procedure.

   1. (1) Only applications filed on or after January 1, 2008 are subject to this Chapter.
   2. (2) Applicants seeking assistance under the program must first contact a participating mortgage lender. A list of participating mortgage lenders may be obtained on the department's website or by contacting the department.

   3. (3) All applicants shall complete an application with a participating mortgage lender and shall provide the following information at the time of application:

      1. (A) written permission to obtain credit reports of the applicants on a form to be provided by the mortgage lender;
      2. (B) an affidavit of Texas residency on a form to be provided by the mortgage lender;
      3. (C) the most recent statements for all credit and bank accounts;
      4. (D) pay stubs for the 3-month period prior to the month in which the application was filed;
      5. (E) W-2 forms for the two most recent calendar years for which they are available;
      6. (F) any information concerning debts that will not be paid off within twelve months of the date the application is filed, including, but not limited to the names of the associated creditors, account numbers and regular payment amounts;
      7. (G) documentation of any other income or other form of support not evidenced above; and
      8. (H) a copy of the executed sales contract for the subject property.

6. (f) Application Fees. Fees that may be collected by the mortgage lender from the first-time homebuyer relating to a mortgage loan include:

   1. (1) an appropriate origination fee and buyer/seller points;
   2. (2) all usual and reasonable settlement or financing costs that are permitted to be so collected by Federal Housing Administration ("FHA"), Veteran's Administration ("VA"), Rural Housing Services ("RHS"), Freddie Mac or Fannie Mae, as applicable, and other applicable laws, but only to the extent such charges do not exceed the usual and reasonable amounts charged in the area in which the home is located in cases where owner financing is not provided through a tax-exempt mortgage revenue bond financing. Such usual and reasonable settlement or financing costs shall include an application fee not to exceed $325 (which includes the funding fee and the tax compliance fee), the total estimated costs of a credit report on the applicants and an appraisal of the property to be financed with the mortgage loan, payable to the mortgage lender at or within ten (10) days of the application for a mortgage loan, title insurance survey fees, credit reference fees, legal fees, appraisal fees and expenses, credit report fees, FHA insurance premiums, private mortgage guaranty insurance premiums, VA guaranty fees, VA funding fees, RHS guaranty fees, hazard or flood insurance premiums, abstract fees, tax service fees, recording or registration fees, escrow fees, file preparation fees; and

   3. (3) with respect to the issuance of mortgage credit certificates:

      1. (A) an issuance fee;
      2. (B) a non-refundable commitment fee; and
      3. (C) a document handling fee.

Source Note:The provisions of this §7.3 adopted to be effective December 2, 2007, 32 TexReg 8436.