Buying a home with a lower income can feel difficult, especially when you are trying to save for a down payment, manage monthly bills, and prepare for unexpected expenses.
However, a high income is not the only factor involved in buying a home.
Your mortgage options may also depend on:
- Credit history
- Monthly debt obligations
- Savings
- Household income
- Property location
- Loan program
- Down payment assistance
- Ability to afford the ongoing housing costs
Some Texas homebuyers may qualify for programs that help with a down payment or closing costs. Others may qualify for low-down-payment or no-down-payment mortgage options.
This guide explains how to afford a house with low income in Texas, programs that may help, costs to prepare for, and what to do if a financial emergency occurs during the homebuying process.
Can You Buy a House With Low Income?
It may be possible to buy a house with a low income if you can qualify for an affordable mortgage and manage the ongoing cost of homeownership.
A lender may review factors such as:
- Income
- Employment history
- Monthly debt
- Credit
- Savings
- Available funds
- Property information
- Expected monthly housing payment
The goal should not simply be to qualify for the highest possible purchase price.
A more useful question is:
How much home can I afford while still paying my other bills and preparing for unexpected costs?
Before shopping for a house, estimate:
- Mortgage principal and interest
- Property taxes
- Homeowners insurance
- Mortgage insurance, if applicable
- >Homeowners association fees
- Utilities
- Maintenance
- Repairs
A home may fit the lender’s approval limit but still put too much pressure on your monthly budget.
Can You Buy A House With No Down Payment?
In a nutshell, everyone who’s planning on buying a house here in Texas would have to take care of a down payment, but there is some wiggle room for those who can’t afford to pay anywhere between $10,000 and $70,000 at once because of their low income. First of all, depending on your credit score and debt-to-income ratio, you might be allowed to put down only 3% of the house’s value upfront – which, in a lot of cases, might end up being a realistic sum.
What Is Required To Qualify For A Texas Home With Low Income?
However, that might not be an option for you if your credit score is below 579. Another thing for you to bear in mind is that you wouldn’t necessarily have to pay the entire amount out of your own pocket. There are several programs, in Texas or just in general, that can provide down payment assistance to those who are eligible. Keep in mind that most of these programs are usually available only to first-time home buyers and there are credit score requirements as well, but they can still help.
Top Programs That Help Buy A House In Texas
1. Texas State Affordable Housing Corporation Programs
You must have a credit score of at least 620 to qualify and there is a limit on the cost of the house that you can buy. Furthermore, there is a certain income limit that you would have to meet to be eligible. The housing organization has a short test that you can take to find out whether you might qualify for approval. If you are eligible, you will be instantly shown a list of the participating lenders in your area. Here are two programs from the TSAHC that you should look into:
- TSAHC Home Sweet Home: With this program, first-time home buyers will be able to benefit from a 30-year loan with fixed rates. You would also be provided a 5% down payment assistance.
- TSAHC Homes for Texas Heroes: You can take advantage of the same benefits listed above even if you’re not a first-time home buyer. However, just as the name suggests, you need to be a public service professional (a police officer, firefighter, teacher, etc.).
2. Texas Department Of Housing And Community Affairs Programs
The TDHCA has been created to help specifically low- and moderate-income families. They offer two main programs, each of which can be paired with MCC. To be able to benefit from the programs, you would have to meet a few strict requirements – the property that you’re planning on buying should be your main residence; you must meet the purchase and income limits; you must have a credit score of at least 620. Here are two programs you can find with the TDHCA:
- TDHCA My First Texas Home: Those who are eligible will benefit from a 30-year loan with fixed rates and closing costs and down payment assistance.
- TDHCA My Choice Texas Home: You wouldn’t necessarily have to pick a government-backed loan to qualify for this program. You will also be offered closing costs and down payment assistance.
3. Low-Down-Payment Home Loan And Downpayment Assistance Programs
The third option you should look into is getting a low-down-payment home loan and down payment assistance to help. This basically means you will use Downpayment Assistance Programs to fund your contribution – which means you end up paying zero down payment from your own pocket on the house you want. Downpayment Assistance Programs (or DPAs) are available in any state, even here in Texas. Requirements can vary, so make sure you are looking at eligibility for Texas specifically.
What To Do If You Face A Financial Emergency
What Are Title Loans?
Texas Car Title and Payday Loan Services, Inc. offers title loans for qualified applicants facing urgent expenses.
A title loan generally requires:
- A driver’s license or state-issued photo ID
- A lien-free vehicle title
- The vehicle for inspection
A title loan is secured by a qualifying vehicle.
Because the vehicle secures the agreement, review the repayment and default terms carefully.
A title loan should not be treated as a homebuying or down-payment strategy.
What Are Payday Loans?
Payday loans are a different short-term loan product.
Current required items generally include:
- A driver’s license or state-issued photo ID
- A recent pay stub
- A checking account
A payday loan should not be presented as a way to improve mortgage eligibility or fund a home purchase.
If you are actively applying for a mortgage, talk with your mortgage lender before taking on new debt.
Make Homeownership Possible With the Right Support
Buying a Texas house with low income may be challenging, but it's achievable. Use these programs to reduce your upfront costs and lean on short-term loan options when emergencies strike.
If your savings are tied up in your down payment and you need a boost, we’re here to help with a quick title loan or payday loan.
Texas Car Title and Payday Loan Services, Inc. can explain its current short-term loan products for qualified applicants facing urgent expenses, but these products should not be treated as down-payment or homebuying tools.
Need quick funds while buying a home? Apply for a Title or Payday Loan Today
Frequently Asked Questions
How can I afford a house with low income in Texas?
Start by reviewing your budget, debts, credit, savings, and expected housing costs. Then compare mortgage and down-payment assistance programs that match your income and circumstances.
What programs help you buy a house in Texas?
Programs may include TSAHC Home Sweet Texas, Homes for Texas Heroes, TDHCA My First Texas Home, and My Choice Texas Home. VA, USDA, and FHA mortgage options may also be worth reviewing.
Can I buy a house with no down payment?
Some qualified borrowers may have no-down-payment options through programs such as VA or USDA loans. Eligibility requirements apply.
Note: The content provided in this article is only for informational purposes, and you should contact your financial advisor about your specific financial situation.
