5 Star Texas Advantage Program

The Southeast Texas Housing Finance Corporation (SETH) offers Texas residents the 5 Star Texas Advantage Program, which helps eligible applicants with down payment and closing cost assistance in the form of a grant. The program provides up to 6 percent of the total loan amount in grant money to qualifying applicants. They can choose the amount of assistance and loan option that best meets their needs, out of the many options available. Any borrowers financing with the Freddie Mac/conventional mortgage option and meet SETH’s Affordable Income Subsidy Limits may receive an additional 2 percent of the loan amount.

5 Star Texas Advantage Program is a true gift, as there is no repayment or recapture period for the funds provided, nor is there is a second lien on the property. Additionally, the program does not have the usual first-time homebuyer requirement.

Eligibility Requirements

• Buyers must be income eligible.
• They must purchase a home within the program’s perimeters (the entire State of Texas except the city limits of El Paso, Grand Prairie, and Travis County).
• All buyers on the mortgage must complete the online SETH Homebuyer Education Class.

The purpose of this program is to make funds available to eligible applicants who are interested in purchasing a home but need financial help to pay the upfront costs, which include the down payment, as well as the closing costs and prepaid items required to obtain homeownership. These expenses can add up to a substantial amount, and the inability to pay it might keep people stuck in a renters trap.

*Seller-funded down payment programs were eliminated in the Housing and Economic Recovery Act of 2008, but States and Local government agencies are still permitted to help borrowers finance their homes with second mortgages and grants. These agencies set different requirements that a borrower needs to meet in order to qualify for the grant programs, such as property location, and purchase price and income limits.