TSAHC’s Opportunities for Homeowners – Even We Were Surprised at What’s Available!
In this podcast, we talked with, Joniel LeVecque and Michael Wilt, from the Texas State Affordable Housing Corporation. They have lots of products available to help folks get into affordable homes, and the best news is, they have stuff that the average person will qualify for.
The following transcript has been lightly edited for clarity purposes.
Intro: Hey look! It’s the Doublewide Dudes!
Alberto Piña: All right, welcome back to another episode of the Doublewide Dudes podcast. Today we’re joined by two Texans, Joniel LeVecque and Michael Wilt, from the Texas State Affordable Housing Corporation. Appreciate y’all joining us on the podcast.
Michael Wilt: Thank you so much.
Joniel LeVecque: Yeah, we’re great. We’re excited about being here and being able to talk about everything we can offer home buyers.
Alberto Piña: For our audience, I guess we just take a quick minute to introduce yourselves and how y’all got working in the space.
Joniel LeVecque: Michael I’ll let you start.
Michael Wilt: Yeah. I’m Michael Wilt, I do external relations here at Texas State Affordable Housing Corporation. People commonly call us “Tee-Shack” by the way, so you’re free to use that if you want.
I’ve been in real estate for, I don’t know, 12 years. I started out as a lobbyist for a commercial real estate and the only thing I cared about in that space was housing. And so, this opportunity came up seven years ago, jumped at it, and I’m thrilled to work in the housing space. Obviously it’s an important community conversation and across all the state. It used to be just in a few Metro areas, but now everybody’s talking about it, so it’s a delight to work on something I’m passionate about day in and day out.
Joniel LeVecque: Can’t agree with you enough Michael. My name is Joniel LeVecque, as I was introduced, and I’m the director of the home ownership programs here at TSAHC, and I actually just celebrated my five year anniversary here and have been in the real estate industry for over 30 years, or more than 30 years now. In various roles from everything to being a realtor, to a mortgage loan officer, and now I tell folks I have my dream job. I get to give away free money. I mean, what could be more fun than that?
Alberto Piña: That’s awesome. And for our audience and myself as well Michael, what is TSAHC?
Michael Wilt: Simply put, we’re a housing finance agency. There are two of them in Texas. It’s unique in that our state has two that operate statewide. Ours is a nonprofit that was set up by the Texas legislature in 1994. We have three major areas built by state. We provide financing for people that want to build housing, whether it’s for sale housing, home ownership, or rental housing, which we call multi-family housing. We help people purchase a house under the buyer category and then… which Johnny I will tell you more about. And then we help people stay in their house. We have grants for home repairs, for supportive services at supportive housing communities. I saw last week y’all had somebody with the Housing First Community, so places like that, and then foreclosure prevention and other types of homeownership counseling we do as well, or we fund as well.
Alberto Piña: You mentioned when you’re talking about, kind of during the intro, it used to be affordable housing was kind of relegated to a couple cities here and there, or a couple of states, as you see it here in Texas, what is the current state of the affordable housing crisis?
Michael Wilt: So I guess the catchphrase of 2020, one of them was, it’s a fluid situation. And that’s how I would capture the state of housing. Things got really out of control over the past six to nine months. Let me back up though, because I work in the government relations side and the first few sessions you would go to the Capitol and you’d say, “We need more money for housing. We need to fix the housing. Housing prices are going through the roof. People can’t afford the rent,” and nobody would care. You would talk to the Austin Delegation and they would say, “Yeah, we get you. We’re here to help. We understand. Rent’s getting out of control.”
Every session I come back, I have more friends that want to talk about housing from Dallas and Houston, from the Permian Basin, where rents have exploded because of the oil activity, to south Texas, to pretty much every corner of the state, it’s becoming more and more of a problem.
The inventory of affordable rental and home ownership homes continues to shrink, and we can’t produce enough income restricted housing to stay ahead of the curve. You couple that with an influx of out-of-state migration into Texas, a lot of times it’s people who can’t afford what we think of as an unaffordable home. And so that’s adding to the crisis, if you will. And then we have people who didn’t have a paycheck for a long time with the pandemic who fell behind on rent. Luckily we had an eviction moratorium, but at some point the rent’s going to come due and people are going to have to pay that.
So, there are a lot of different moving parts as to how this crisis is unfolding and will continue to unfold. And we’re trying to provide some solutions, obviously we’re part of the overall solution to this, but I don’t think we’re going to have a really good assessment of the true nature of the crisis until six, nine months, a year from now when we see hopefully the stabilization of home prices across the state. We’ll have a better understanding of who ultimately is going to have trouble, or can’t pay their back rent and they find themselves experiencing homelessness. So, it’s hard to have a complete picture at this point in time.
Alberto Piña: Yeah, I’ll echo that…very fluid situation. I think the one thing we can all probably likely agree on is COVID did not make affordable housing any better than it was leading up to it.
Michael Wilt: And the same way that our supply chain got disrupted in the delivery of toilet paper, got disrupted in the delivery of now cars and other things, where you’ve seen the prices just go out of control…grocery items, things like that. The same thing happened with housing. We’re dealing with a lot of people moving to Texas. We already had a shortage of rental housing that was affordable to certain income levels. And then we couldn’t produce enough because lumber prices went through the roof. People had to disrupt their labor crews for months on end. And so it just made things exponentially worse. And then at the same time you’ve got a lot of wealthier people moving into this state who are willing to overbid for what little housing inventory is available.
Joniel LeVecque: And pay cash.
Michael Wilt: And pay cash.
Alberto Piña: Yeah, I can say on the home building side, I think every home builder in the state wants to build more houses just because the demand is so large, but without enough insulation or lumber, it’s supply chain is really throwing that for a loop for sure.
JL, for home buyers looking to get into an affordable place to call home. How specifically does TSAHC help with that?
Joniel LeVecque: So actually I just recently did a podcast and I guess this is the good time to plug our podcasts. We started a podcast last year called On The House, and we talk about everything from purchasing a home through home ownership. And we just recently did a podcast on maybe some tips on how to win the bid in this competitive market. And the tips that we pointed out to folks is use down payment assistance. You may already have your down payment and closing costs, but with the market that we’re in right now, and folks having a difficult time competing on that bid, you might need a little bit of extra cash to put a little bit more down than the minimum down payment. The minimum down payments are about three percent and maybe you could, with down payment assistance, look at putting your five or ten percent down to kind of make your bid look a little bit more competitive and strong.
We also have our mortgage credit certificates program, which can help you maybe qualify for a little bit more house than what you could have qualified for before. So we definitely have a few options that we can help folks out.
Alberto Piña: What is the down payment assistance program and how does that work?
Joniel LeVecque: Very good question. So I’ll start off by explaining the different mortgage loan types have different down payment requirements. I was just mentioning some of the lowest down payments out there are three percent, but unfortunately a lot of folks do have this misconception that they have to save up 20% before they could even buy their first home. And it’s just simply not true. I mean, you can get a mortgage loan with three percent down. And so if you’d like to participate in our down payment assistance programs, we do offer three different options of down payment assistance levels. We can get you three, four or five percent to help you with your down payment and closing costs. So, as an example, if you’re… let’s say you choose our five percent down payment assistance option, and you’re wanting to borrow $100,000, we would be giving you $5,000 to help you pay that down payment and closing costs. So very significant and honestly it helps you come up with less money and having to worry about coming up with as much money out of pocket.
Alberto Piña: Yeah, and I know we see firsthand that is usually one of the main barriers that’s preventing folks from taking that leap is they think they don’t have enough, but there’s all sorts of government loan programs out there with three, three and a half, percent.
Michael, so it sounds like you all don’t just work with homeowners. You work with builders, lenders, property managers, the whole spectrum of this housing equation. What do y’all do with that part of the industry to address the affordable housing conversation?
Michael Wilt: On the development side, the builders side, we’ve got a lot of different financing instruments we can use. Our most common one is we issue private activity bonds. They are not debt that is held by the taxpayers of Texas, they’re all privately held and service the debt. And those are combined with something called four percent tax credits, which is an industry term, and it’s basically some soft equity you get in your development costs, and by soft equity I mean you don’t have to pay it back. It’s in the form of a tax credit that the company is claiming, so it’s money that helps us, or helps developers, to build income-restricted housing, affordable housing. We also have some different financing instruments where we work with banks and foundations, and they invest in our Texas Housing Impact Fund. And then we turn around and we loan that money out to different developers across the state.
We also do some homeownership activity within that as well. We’ll work with… We call them our local non-profit partners. They’re all over the state and they’re doing one, or two, or three homes at a time. And we’ll give them a line of credit and say, “Here’s a quarter of a million dollars, go build three homes, sell them, and then recycle those funds, and keep on doing that as long as you want.” All the lenders that we work with they’re either investing in one of the financing instruments that we use, or they’re one of our corresponding lenders on the mortgage side so that they can issue our down payment assistance and mortgage credit certificate.
Alberto Piña: Yeah, so it sounds like you all are covering the whole spectrum, the home buyer themselves. Here’s some assistance for that down payment that might be that barrier, making it less expensive for builders so they can charge less. And then Joniel, you mentioned this mortgage credit certificate. Definitely not something I had heard of, I imagine there’s a lot of our listeners wondering what that is. What is that and how does that help folks be more competitive when they’re looking to get into a house?
Joniel LeVecque: Well, I’m glad you asked because that’s actually one of my favorite products that we have. And we actually jokingly talk about this program and say that it’s Texas’s best kept secret. I mean, here you are in the affordable housing industry and you didn’t know anything about it, and this is just an amazing program. So we appreciate the opportunity to help spread the word through your podcast.
But essentially an MCC, mortgage credit certificate, is a special income tax credit available to first-time home buyers only. And it helps them claim 20% of their, or rather get back, 20% of their mortgage interest every year when they file their tax returns. So this obviously can save the home buyer thousands of dollars over the life of the loan. Because it is a tax credit it isn’t effectively increasing your net income, so because now you have more income, you can qualify for more house, or maybe you just have a lot of debt from student loan debt or whatever, and the loan officer is saying you’re not qualifying for enough house to buy in the area that you want to buy in. This could help wash out some of that debt and help you qualify for a house that you wanted to buy. So, I mean, it’s truly a powerful tool and it’s available to all first time home buyers and a lot of folks don’t know about it. So yeah, we definitely appreciate the opportunity to get the word out, so it’s no longer Texas’s best kept secret.
Alberto Piña: Yeah, that’s wild. That’s a heck of a secret. We got to let people know about that. I didn’t even know that was a thing, but that could definitely make the difference between someone getting into a home or not. So this is specifically for first time home buyers. How does the state categorize that in how would one qualify for this program?
Joniel LeVecque: That’s actually an excellent question because I think a lot of folks here are first time home buyers and just automatically assume that they don’t qualify. Really the definition of first-time home buyers, anyone who hasn’t had any ownership interest in their primary residence in the last three years. So let’s say you have a ownership interest in a property that you inherited, but you’re not living there. So you still… If you’re renting your own place where you live, you still qualify, even though you have ownership interest in real estate. And it may be you owned a home and lived in your home previously, but you for the last three years have been renting an apartment. So you now qualify again as a first-time home buyer. So it doesn’t mean that you’ve never owned your own home and it doesn’t mean that you don’t have ownership interest in property. It just means that you’re currently renting your residence and have been for the last three years.
Alberto Piña: Yeah, I think that’s important for folks to know because your personal residence is a fluid situation too. You get a new job, or bigger family, smaller family, it’s constantly changing. And for the down payment assistance, surely y’all aren’t just handing out money to anybody that needs it. What are the qualifications to qualify for that program?
Joniel LeVecque: First of all, I’d like to point out we talked about first time home buyer being a requirement for MCC, but with our down payment assistance program, you do not have to be a first time home buyer. So you could currently own your home and… I would normally say that maybe you are selling your home and you’re not making any money off of it, but obviously right now in this market people are making a lot of money on selling homes. You could be selling your home right now, I’d be walking away with very little money out of pock… or getting money in your pocket.
And so not necessarily have enough to get you into that next home or stepping up to that next home. So our down payment assistance is still available to you, or maybe as you mentioned, if someone’s moved for a job and they still own their home and they want to keep it in their small… maybe their hometown, and they’re now moving to the big city and want to buy a home here. They could even own, currently own, a home elsewhere as long as the home that you are purchasing is going to be your primary residence.
So the down payment assistance does have to go towards your primary residence, but otherwise you simply need to qualify for a mortgage loan. Qualify for either an FHA, VA, USDA, or conventional loan type. And then you also need to meet the income limits based on the county that you’re purchasing the home in. So income limits are different for each county and we actually have a quiz on our website where you can go find out the income limits for that county.
Alberto Piña: Very cool, and is that usually a percentage of the median income for the county?
Joniel LeVecque: It’s the area, yes, we go up to 115% of the area family median income.
Alberto Piña: Awesome. Well, we’ll definitely be putting the link to that quiz and your podcast in the show notes so our customers can find out more information that-a-way. One question I had when you were explaining the programs, can these be combined together? Is it you pick one or the other, or how does that work?
Joniel LeVecque: Absolutely. If you’re a first time home buyer, you can utilize both programs. You can get… I always say, “We’ll help you get into the home with the down payment assistance and then help you make those mortgage payments with that mortgage credit certificate.”
Alberto Piña: That is so cool. You mentioned a lot of the loan products that a lot of our customers use: The USDA, a lot of VA, we do a lot of FHA construction loans. Are these programs that consumers in the factory built housing space can take advantage of as well?
Joniel LeVecque: Absolutely. Our programs do allow for manufactured housing. Doublewide only. For our government loan types. It’s not available with our conventional loans, but it is with FHA, VA, and USDA.
Alberto Piña: How can customers reach you, or learn more, and just about what you’re doing, and how they might be able to take advantage of some of these programs with y’all?
Joniel LeVecque: That’s great. We would love for everyone out there to be calling us and getting on our website mostly. We have so much information on our website. Our marketing team has put together an amazing website. As I touched on a little bit earlier, we do have a quiz on (the TSAHC) website, so if you’re at all interested in the down payment assistance or the mortgage credit certificates program, we have a very simple four question quiz. There’s no personal questions. It’s just a simple four answers and it will tell you whether or not you qualify for the down payment assistance, and/or mortgage credit certificate program. And then the great thing from there is it gives you the steps on how to participate in the program. It will help you identify a lender who is one of our approved mortgage lenders that works in our program, so you can help find that loan officer.
It will also walk you through the steps on how to get your home buyer education, which is also a requirement to use our program. And then the next step is once you get those things out of the way is even connecting you with a participating realtor. So our website really truly has all that information available to you to help get you started. And I don’t know if I mentioned earlier as well, we also have a great loan comparison tool on our website where a person can go in and look at this loan comparison and say, “Okay, I want to see what it looks like for me to get a three percent down payment assistance versus a five percent down payment assistance, versus an FHA loan, versus a USDA loan.” So just a lot of amazing tools on our website at tsahc.org.
Alberto Piña: Buying a home, it’s scary. There’s a lot of things you’re going to want to know, and if you’re a first time home buyer you’re not expected to know all that stuff. That’s what resources like this are for, and it’s there to kind of educate you and make it a little less scary. If you know the rules of the game you can play it better, and it sounds like that’s what y’all at TSAHC as a whole is really trying to do. Educate folks and kind of help them get over that hurdle so they can become a homeowner in an affordable way.
Joniel LeVecque: Absolutely. We love doing what we do. Don’t we, Michael?
Michael Wilt: Absolutely.
Alberto Piña: Well awesome. I know I for sure learned a ton and I’m going to do some research on my own to learn even more, but thank you all very much for joining us on the podcast and educating our listeners on these awesome programs here in Texas. Let’s make sure it’s not a secret anymore.
Joniel LeVecque: Sounds great.
Alberto Piña: All right, well that does it for Doublewide Dudes podcast. Appreciate everybody tuning in and we’ll catch you all on the next one.
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