By Samantha Salazar
In December 2018, the City of San Antonio rolled out its newest Homeownership Incentive Program (HIP120) intended to help first-time homebuyers 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 on a house. HIP120 may help these buyers secure the funding they need.
HIP120 is a 0% interest loan ranging from $1,000 to $15,000 that may help cover a lender-required down payment and some additional costs associated with buying a home. 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, which can be used in conjunction with a Conventional, FHA, or VA loan. HIP120 may also be combined with the Homeownership Program for Employees (HOPE-City Employees), but 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. A buyer must also make a minimum $500 earnest money deposit on the purchase contract.
In order for a home to qualify for HIP120 assistance, it must be located within San Antonio city limits and cannot exceed the purchase price maximum, which is set annually. 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
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.