SETH 5 Star Texas Advantage Forgivable Lien

The 5 Star Texas Advantage Forgivable Lien is a down payment assistance program offered by the Southeast Texas Housing Finance Corporation (SETH) to help low-to-moderate income buyers lower their upfront costs when they purchase a home.

The assistance comes in the form of a lien, but you don’t have to pay the money back as long as you meet the basic forgiveness criteria. This program can be used to purchase a home almost anywhere in Texas.

Eligibility requirements

To qualify for a SETH 5 Star Texas Advantage Forgivable Lien, you must meet the following eligibility requirements.

1. The property must be in Texas, but it cannot be in Travis County, El Paso, McKinney, or Grand Prairie.
2. You’ll need a credit (FICO) score of 640 or higher.
3. The total purchase price of the home must not exceed $492,500, unless you are financing with an FHA loan. 
4. With an FHA loan, the purchase price limit ranges from $472,030 to $571,550, depending on the location of the home.
5. Your income must be below the program’s threshold. This threshold is between $78,820 and $171,220,* depending on the location of the home. 

*For all DPA programs, income and purchase price limits are regularly reviewed and updated. These amounts were correct at the time of publication but may change with time.

Type of loan

The SETH 5 Star Texas Advantage Forgivable Lien operates in essentially the same way as a forgivable loan. This means that, after three years, the lien dissolves and you don’t have to repay the assistance money as long as you consistently make your monthly mortgage payments on time and don’t move or sell the home during the three-year period. 

If you purchase your home using a SETH Freddie Mac conventional loan, you could qualify to receive this down payment assistance in the form of a grant instead of a lien. This grant doesn’t need to be repaid and has no forgiveness requirements. 

Amount of down payment assistance

The SETH 5 Star Texas Advantage Forgivable Lien offers up to 5% of your loan amount in down payment assistance. Although there is no fixed maximum amount of assistance, the maximum purchase price set by the program functions as an informal cap on the total amount of assistance you can receive.

Minimum borrower contribution

This program does not require a minimum contribution from the borrower. You can receive help with your down payment through the program without using any of your own savings. This makes this program an appealing option for buyers with limited resources for covering upfront costs.

Purchase price limits

If you use an FHA loan, the purchase price limit for the SETH 5 Star Texas Advantage Forgivable Lien is between $472,030 and $571,550, depending on where you purchase your home. This sliding scale is intended to make the program viable in all of the housing markets in Texas. 

The purchase price limit for a non-FHA loan is $492,500. 

Income limits

To qualify for the SETH 5 Star Texas Advantage Lien, your income must fall below the program threshold, which varies depending on the location of the home you’re purchasing. This cap is between $78,820 and $171,220. 

The program’s income limits are subject to frequent evaluation and adjustment. To verify if you qualify based on your income, utilize our free down payment assistance finder.

How to qualify for the SETH 5 Star Texas Advantage Forgivable Lien

To be eligible for this down payment assistance program, you must satisfy the eligibility criteria outlined above. Our free down payment assistance finder can help you determine if you qualify.

How to apply for the SETH 5 Star Texas Advantage Forgivable Lien

Your application for the SETH 5 Star Texas Advantage Forgivable Lien can only be submitted through an approved, participating mortgage lender. SETH does not accept direct applications. To find a lender who can help you apply for this down payment assistance program, use our free down payment assistance finder.