In December 2018, the City of San Antonio rolled out its newest Homeownership Incentive Program (HIP120). First-time homebuyers may use this new program to overcome the financial challenge of affording a down payment. Facilitated by the Neighborhood and Housing Services Department, this program works with a homebuyer’s private mortgage lender to secure financial assistance for qualified buyers.
One of the biggest obstacles first-time homebuyers face is saving enough money for a down payment. HIP120 may help these buyers secure the funding they need.
HIP120 is a 0% interest loan ranging from $1,000 to $15,000. Homebuyers may use these funds to cover a lender-required down payment and some additional costs. However, buyers should note that this is not a mortgage—HIP120 is a second and separate loan. The buyer must first qualify for a home loan with a private lender before receiving HIP120 assistance.
The program works with a buyer’s mortgage lender to request and complete a HIP120 loan application. A HIP120 loan works in conjunction with a Conventional, FHA, or VA loan. Additionally, the Homeownership Incentive Program functions in conjunction with the Homeownership Program for Employees (HOPE-City Employees). However, a HIP120 loan cannot be used with the First Responders Homebuyer Assistance Program (FR HAP-City Employees).
Homebuyers do not need to make payments on a HIP120 loan while they live in the purchased house. Seventy-five percent of the loan will be forgiven over a 10-year period. After this period, if there is a change in homeownership, 25% of the loan must be paid back.
Both the homeowner and the house itself must qualify in order to receive HIP120 assistance.
An individual must be a first-time homebuyer purchasing a primary residence. They must complete a homebuyer education class approved by the Department of Housing and Urban Development (HUD), and their income cannot exceed the published limits set by HUD each year. Additionally, a buyer must also make a minimum $500 earnest money deposit on the purchase contract.
Homes located within San Antonio city limits that do not exceed the annually set purchase price maximum may qualify for HIP120 assistance. For 2019, the maximum sales price cannot exceed $221,000 for an existing home, and $235,000 for a completed new construction.
Other qualification details will be reviewed at the time of application.
How to Apply For The Homeownership Incentive Program
Homebuyers can learn more about HIP120 and the HUD-required Homebuyer Education Classes by visiting the City of San Antonio’s website.
For those ready to find out if they may qualify for this program, Generations’ Mortgage Team is happy to help get your applications for a home loan and down payment assistance started. Talk to a Home Loan Specialist today by calling (210) 230-9380, or start your home loan application easily online.
Still not sure if you’re ready to make the change from renting to homeownership? Check out our blog on the five signs to look for that will help you know when you’re financially ready to buy a house.
Samantha Salazar is a University of Texas at Austin alum who has worked in the finance and marketing industry since 2011. She has a background as a CUNA Certified Credit Union Financial Counselor and is a Class II graduate of the Latina Leadership Institute (LLA). True to her millennial nature, Samantha loves coffee, covers her home in hanging plants, lives a frugal lifestyle, and works hard so that her dog, Olive, can have the backyard she deserves.