TruePath vs. Traditional Mortgage: A Side-by-Side Comparison

Buying your first home is one of life's biggest decisions. With so many mortgage options available, finding the right path forward can feel overwhelming.

TCHFH Lending, Inc. is a subsidiary of Twin Cities Habitat for Humanity and offers its own mortgage product called TruePath Mortgage. Below, we look at the differences between TruePath Mortgage and traditional mortgage options. Note: TruePath Mortgage is only available through Twin Cities Habitat's Homeownership Program. 

The Financial Foundation

The REAL cost of homeownership might surprise you as you look at mortgage options. Here are some things to know about traditional mortgages and how TruePath Mortgage is different.

Traditional Mortgage:

• Down payment: Typically 3-20%, with first-time buyers averaging 9%

• Closing costs: Often thousands of dollars

• Private mortgage insurance (PMI): 0.2-2% of your loan annually if you put down less than 20%

• Monthly impact: PMI adds $100-500 per month that doesn't build equity

TruePath Mortgage:

• Down payment assistance included

• Closing cost help available

• No PMI required

• Interest rates can sometimes be lower than conventional lenders

• Most pre-approvals include about $55,000 in total assistance

• Monthly payment capped at 30% or less of your income

With traditional mortgages, you'll need large savings upfront and will pay more each month. TCHFH Lending, Inc.'s TruePath Mortgage removes these barriers, making homeownership accessible without draining your savings or stretching your monthly budget.

Homeownership: Support vs. Speed

Traditional lenders often promise quick pre-approvals—sometimes within 24-48 hours. While speed sounds appealing, this can leave you unprepared for the realities of homeownership. You're left to figure out inspections, insurance, maintenance planning, and long-term financial management.

TruePath's intake process takes about six weeks, which includes participation in Habitat's Homeownership Program. During this time, you’ll complete eight hours of mortgage education and receive HomeStretch certification. This preparation helps you understand exactly what you're signing up for, from reading inspection reports to planning for future repairs. 

By the time you reach the Lending department, you've already provided three years of tax returns, three months of paystubs, and bank statements and are fully prepared.

Finding Your Fit

Traditional mortgages and TruePath Mortgage have different requirements. Here's how they compare:

Traditional Mortgage:

• Minimum credit score: Usually 620-640

• Strict income verification needed

• Variable income often rejected

• Limited property types accepted

• Who struggles: Gig workers, seasonal employees, those rebuilding credit

TruePath Mortgage:

• Credit coaching available to help you become mortgage-ready

• Works with variable incomes

• Welcome: Teachers, nurses, gig workers, moderate-income families

• Stackable with other city and county funds

• Property options: Single-family homes, condos, townhomes, multi-family properties (up to four units)

• Special programs like Advancing Black Homeownership available

Long-Term Partnership

Twin Cities Habitat for Humanity remains your partner throughout your homeownership journey. Our relationship continues after closing, with ongoing support and resources available when you need them. Our mission centers on keeping families in affordable housing for the long term. This continued partnership means having someone to turn to when questions arise about refinancing, home maintenance, or financial planning. 

Your Next Step

To access TruePath Mortgage, you first must meet the guidelines for Twin Cities Habitat's Homeownership Program. Review the Homeownership Program's full criteria, including the income guidelines. Twin Cities Habitat annually updates our Homeownership Program income requirements based on area market conditions.

Then, fill out our Eligibility Form! This is a simple form we use to confirm you meet the guidelines for any of our programs. After you complete the form, you will be emailed next steps.

For more general information about buying your first home, check out our First-time Homebuyer Guide with additional information.