0% interest. Forgiven after 10 years in the home. Income limits apply and almost nobody in this town talks about it. Here is exactly how it works, including the part you need to think hard about.
Most first-time buyers in Laredo think the down payment is what is stopping them. For a lot of people it is not, because the city will lend you up to $30,000 toward it and forgive the whole thing if you stay in the house.
The City of Laredo runs a down payment assistance program through its Community Development Department. Here are the terms as the city publishes them:
The assistance is recorded as a second lien on the property. You are not making a payment on it. It sits behind your mortgage, and at the 10-year mark it goes away.
First-time buyers, which for this program generally means you have not owned a home in the last three years. The home has to be inside Laredo city limits and it has to be where you actually live. Income limits are tied to household size and get updated, so the number that matters is the current one from the city, not a number you read on a website.
This is the honest trade-off and you should hear it before you get excited. The money is forgiven only if you live in the home for 10 consecutive years as your principal residence. Sell early, rent it out, or move, and you may owe a portion back.
The city spells out what happens if you fall out of compliance. The full face value of the loan becomes immediately due. You get 30 days to come back into compliance. If you do not, the entire amount is due and starts accruing interest at 4% per year.
For a family buying a starter home they plan to stay in, this is a great deal. For someone who expects to relocate for work in three years, or who wants to turn the house into a rental, it may not be. I would rather tell you that up front than have you find out at closing.
Take a $180,000 home with an FHA loan. Here is the shape of it. These are illustrative numbers to show the math, not a quote:
| Item | Typical amount |
|---|---|
| Purchase price | $180,000 |
| FHA minimum down payment (3.5%) | about $6,300 |
| City assistance available | up to $30,000 |
| Effect on cash you bring | assistance can cover the down payment and reduce what you bring to closing |
Closing costs, prepaid items, and lender requirements are separate and still apply. Your actual figures come from your lender's Loan Estimate, not from this page.
1. Get pre-approved, and use an approved lender. The assistance is not a substitute for qualifying for a mortgage. You still need a lender to approve you, and the city maintains an Approved Lender List for this program. If your lender is not on it, the assistance does not happen. Check this before you get attached to a loan officer, not after.
2. Confirm your income eligibility with the city. Household size matters. This is the step that decides everything else.
3. Complete the city's requirements. Programs like this typically involve an application, documentation, and homebuyer education. Funding is limited and can run out during a budget year.
4. Write the offer with the assistance in mind. This is where an agent matters. The timeline and the second lien have to be handled correctly in the contract or it falls apart late.
The city publishes the DPA Brochure, the Policy and Procedures document with the application, and the Approved Lender List on its HOME Program page. Those are the official documents. Anything on this page is my plain-language summary of them.
Verify before you rely on it. The city runs this through its Community Development Department, where it is listed as the HOME Program. Program terms, income limits and available funding change, and funding can run out during a budget year. Confirm current details directly:
HOME Program direct line: (956) 795-2680
Community Development: (956) 795-2675 · cdcomments@ci.laredo.tx.us
1301 Farragut St, Transit Center, 2nd Floor East Wing, Laredo, TX 78040
Program page: cityoflaredo.com HOME Program
Titan Real Estate Group does not administer this program and does not decide who qualifies. The city does.
I do not run the program and I cannot approve you for it. What I do is make sure you know it exists, connect you with a lender who has actually closed loans using it, and write your offer so the timeline and the second lien do not blow up the deal two weeks before closing. That last part is where most of these fall apart.
The City of Laredo's down payment assistance program provides loans of up to $30,000 to income-eligible first-time homebuyers purchasing inside Laredo city limits. The loan carries 0% interest and is forgiven once you have used the home as your principal residence for 10 consecutive years.
The program is for first-time homebuyers, generally meaning you have not owned a home in the last three years, with household income at or below 80% of the area median family income. The home must be inside Laredo city limits and must be your principal residence. Income limits change with household size and are updated periodically, so current figures should be confirmed with the City of Laredo Community Development Department.
Not if you stay. The assistance is structured as a 0% interest loan secured by a second lien and it is forgiven after 10 consecutive years of living in the home as your principal residence. If you sell or move out before that, you may be required to repay a portion. That 10-year condition is the real trade-off and you should think about it before you apply.
Down payment assistance is commonly layered with a first mortgage such as FHA. Your lender confirms whether the specific loan program accepts the city's second lien and how it affects your approval. This is a conversation to have with your lender before you write an offer, not after.
The City of Laredo states that it will subordinate its second lien on a refinance provided the structure of the loan remains the same. That means refinancing is possible, but it requires the city's cooperation and should be planned rather than assumed.
Four questions. No credit pull, no pressure. I reply personally, usually same day.
Message me and I will tell you straight, even if the answer is that this program is not right for your situation.
Titan Real Estate Group