FAQs • City of San Marcos, TX • CivicEngage

At what point in my home-buying process should I apply for the program?: An application should be submitted when an eligible employee has found an eligible home and is working with a lender on a home loan. It is important to notify your lender as soon as possible that you have applied for this program.

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Human Resources - City Employee Homebuyer Incentive Program

1. Who is eligible for the program?: Full-time City of San Marcos employees who have not owned a home in the city limits in the past 12 months. Only one application per household.

2. Which types of homes qualify for the program?: Single family homes (including townhomes, condos, duplexes and patio homes) inside the San Marcos city limits. The home must be used as the employee’s primary residence and the employees must obtain a homestead exemption for the home.

3. What type of assistance does the program offer?: Eligible employees may receive $5,000 in the form of a zero interest, 5-year, deferred forgivable loan paid directly to the title company handling the home closing.

4. How can the loan be used?: The loan can be used for down payments and closing costs associated with the home purchase.

5. How do I apply for the program?: Submit the completed form to the City of San Marcos Human Resources Department for eligibility verification. After Human Resources signs the form, it should be turned in to the Community Initiatives Office in the Development Services Department. Please include a copy of the Good Faith Estimate for the primary loan with your application. Anyone included as co-borrowers on the primary mortgage loan must also be included as co-applicants for the program.

6. At what point in my home-buying process should I apply for the program?: An application should be submitted when an eligible employee has found an eligible home and is working with a lender on a home loan. It is important to notify your lender as soon as possible that you have applied for this program.

7. Will I need to make monthly loan payments?: No loan payments are made as long as the employee remains eligible for the program. The City of San Marcos reduces the balance by 20% each year ($1,000) on the anniversary date of the loan closing provided the employee continues to meet eligibility requirements. At the end of the fifth year, the loan balance has been reduced to zero and a lien release will be filed by the City.

8. What happens after I apply for the program?: City staff reviews the application for completeness and eligibility. If approved, an approval letter is sent to the employee. Staff will work with the applicant, as well as their lender and the title company, to prepare loan documents and to have the City’s funds available at the loan closing.

9. What happens if I move out of the home during the 5-year affordability period?: If at any point an employee becomes ineligible for the program; the current loan balance is due to the City. Employees become ineligible if they are no longer a full-time employee of the City, or if the home ceases to be the employee’s primary residence.