Homeowner Assistance Program available for eligible San Marcos residents

Amira Van Leeuwen | Staff Reporter

San Marcos homeowners who have faced financial hardship due to the COVID-19 pandemic and economic inflation have the opportunity to apply for the city’s Homebuyer Assistance Program.

The Homebuyer Assistance Program is a program that offers forgivable loans to eligible low-income homebuyers to purchase a home in San Marcos for downpayment assistance. Homebuyers with incomes less than 80% of area median income who have not purchased a home within the last three years may be eligible for a zero-interest, deferred forgivable loan of up to $12,000. A step-by-step process of the application process can be found here.

San Marcos Community Initiatives Program Administrator Irma Duran said that sometimes when people hear about eligibility for low-income residents, they think they have to be close to the federal poverty threshold

“We’re not saying this is for people at the poverty level. This is for people that are considered low income and this is honestly a lot of people in this county,” said Duran. “A lot of people qualify as low income because inflation has gone up, home values have gone up, but the average salary has not.”

The City has amended the application by removing the limitation that stated homeowners could not have a certain amount of money in their savings accounts.

“Many people have been saving up for years, putting money away into a savings account just to buy a house So we were, unfortunately, eliminating people that were good candidates and good applicants,” Duran said.

“You know, having money saved away doesn’t mean that you’re not still technically low income. And the fact that they were sacrificing this money and putting it away is, you know, it should be considered more of a benefit and not a liability when applying,” Duran said.

The program started off with a total of $87,000 and now has around $51,000 after giving out two 24,000 loans.

“Right now we have some applications being reviewed. So because the applications have not been completely approved yet, because they’re still incomplete then we still have around $51,000 remaining, which could be up to four families if they all apply for the maximum amount,” Duran said.

Homeowners may be eligible to receive assistance if they:

• Had no ownership in principal residence during the 3-yar period ending on the date of purchase of the property (only one spouse in a marriage must meet this criterion).
• Single parent who has only owned a residence with a former spouse while married
• Individual who is now a displaced homemaker and has only one residence with a spouse 
• Individual who has only owned principal residence not permanently affixed to a foundation in accordance with applicable regulations
• Individual who has only owned a property that was not in compliance with state, local or model building codes, and which cannot be brought into compliance for less than the cost of constructing a permanent structure.  

The San Marcos City Council approved the creation of the program back in 2001 when they selected about $120,000 of Community Development Block Grant Funding (CDBGF).

The city receives funding from the CBGF, which is funding from Housing Urban Development (HUD). Every year, San Marcos develops an annual action plan to ask for the priorities for funding.

Duran said it took a few years for the Homebuyer Assistance Program to be “fleshed out.” The first program was launched in 2004 and San Marcos has had the program running under Planning & Development Services for the past 18 years.

The program has had two applicants in the fiscal year of 2022, but overall San Marcos has had over 50 applicants. The first two applicants were single mothers that received a $5,000 loan each in 2005.

“Back when the program started the loans were actually 30-year loans and you’d have to pay about $20 a month,” she said.

“Now what we do, we call them forgivable loans, which means as long as you stay in the house for five years, as long as you don’t sell the house, as long as you don’t demolish the house, you’re forgiven for that loan. If something happens within those five years, then you have to pay us back a percentage of what is remaining,” Duran said.

“If something happens within those five years then you [residents] have to pay us back a percentage of what is remaining,” Duran said.

Duran said there has been a decrease in applicants for the Homeowner Assistance Program in recent years due to the increase of home values and lack of promotion.

“For a few years after 2018 we had a skeleton crew, so now we’re fully staffed, and that really helped us start promoting the program all over again,” Duran said.

“For a while, we only had one person on staff and they were trying to manage all the programs that we had. It was very hard for them to promote the program, take the applications and also run the other programs in the office,” she said. 

The program’s application review, on average, takes about 30-45 days. Duran advises San Marcos residents who are applying to the program to have all their documents ready. A checklist of documents for applicants can be found here.

In addition to the San Marcos Homeowner Assistance Program, the state of Texas is also working to provide financial assistance to Texas homeowners who have faced financial hardships due to the COVID-19 pandemic.

Texas homeowners who are are eligible and apply will soon be able to receive up to $65,000 in aid from the Texas Homeowners Assistance Fund program.

“We anticipate the Texas Homeowners Assistance Fund program will launch in the coming weeks, and the online application portal will be made available to all eligible Texas homeowners needing mortgage payment assistance due to the COVID-19 pandemic,” Texas Department of Housing and Community Affairs Senior Communication Advisor Kristina Tirloni said.

Information about eligibility, required documentation, and how to apply for the Texas Homeowner Assistance Fund can be found here.