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Down Payment Assistance

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The Down Payment Assistance Program provides qualified homebuyers with shared equity, gap financing of up to 30% of the sales price, capped at $50,000. The assistance amount is determined by the borrower's demonstrated need, or "financial gap." The loan is deferred and non-interest bearing. The percentage of equity repayable is based on the assistance amount divided by the cost of acquire the property, multiplied by the equity realized at the time of sale. The original loan - plus the shared equity amount - is paid back upon sale of the property, or when the buyer ceases to owner-occupy.

Important Documents (PDF):
>> DAP Application Checklist
>> DAP Application
>> DAP Program Summary
>> DAP Program Summary (En español)

To qualify for the Loan, a prospective homebuyer must meet all of the following criteria:

  • Applicant's household income may not exceed 80% of the Area Median Household income;
  • Minimum employment history in the same job, or in the case of professional, salaried employees, in the same field of employment for a minimum of six (6) months;
  • May not have more than $20,000 in liquid assets, excluding retirement accounts and personal property;
  • Have an average credit score of 600 or greater;
  • Provide application fee of $30;
  • Must afford mortgage payments between 20% and 35% of monthly income;
  • Complete a homebuyer education course;
  • Contribute a minimum of 1.5% of the total sales price of the home at closing.
  • Homebuyers must receive housing counseling provided by a HUD-approved counselor and housing counseling agency prior to closing.

To qualify for the Loan, prospective homes must meet all of the following criteria:

  • Must be located within the College Station city limits;
  • Maximum home price shall not exceed 95% of the area median purchase price for the same type of residence (HOME Homeownership Value Limits);
  • Must have passed a lead-based paint risk assessment by a State of Texas licensed Lead Risk Assessor if home is constructed prior to 1978;
  • Only owner-occupied or vacant homes may be purchased unless the DAP participant is the tenant;
  • Tenant-occupied homes may not be purchased.

To qualify for the Loan, your lender must meet all of the following criteria:

  • Be licensed in the State of Texas and provide escrow services to buyer(s) for insurance and property taxes;
  • Provide a mortgage interest rate that does not exceed the local average rate more than 1.5 points;
  • Provide a mortgage term of at least 15 years with a fixed rate for the life of the loan and be fully amortizing.

Applicants are urged to complete the Down Payment Assistance application and approval process prior to making an offer to purchase. The Down Payment Assistance application and approval process normally takes three weeks. Delay in submitting required documentation will delay the closing date. Final approval is not determined until the city reviews the sales contract, lender information, and inspects the home.

Shared Equity Example

If a client borrowed $25,000 to purchase a $100,000 home (25% of the sales price) and sold the home ten years later for $130,000, 25% of the equity accrued would be due back to the City along with the original $25,000 borrowed. In this case, $30,000 in equity was realized, so 25% plus the original loan amount would be due back ($7,500 + $25,000 = $32,000).

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