Texas First-Time Home Buyer Assistance Programs

10 Min Read
Published April 19, 2024
FACT-CHECKED
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Written By Terence Loose
Reviewed By Tom McLean

Homes are expensive. Fortunately, Texas offers down payment assistance programs to help primarily first-time home buyers afford the upfront costs of buying a home. These programs range from low-interest mortgages to grants and forgivable loans. And while there are income limits for borrowers, the rising price of homes means more borrowers in the Lone Star state are eligible for these programs.

Key Takeaways:

  • Statewide Texas assistance programs provide grants and deferred forgivable loans that help buyers afford a down payment and closing costs when buying a home.
  • The state’s mortgage credit certificate program gives first-time buyers a tax credit equal to a portion of the mortgage interest they pay each year.
  • Many local down payment assistance programs are available from local governments throughout the state.

My First Texas Home Program

My First Texas Home is offered through the Texas Department of Housing and Community Affairs for first-time home buyers and veterans. You qualify as a Texas first-time home buyer if you haven’t owned a home in the past three years.

It offers 30-year, fixed-rate government-backed loans with a low interest rate. Assistance for down payment and closing costs of up to 5% of the purchase price is available through a 30-year zero-interest, deferred-payment second loan or a three-year forgivable second loan.

The program is aimed at low-income buyers, so borrowers must meet credit score and income requirements. There also are price limits on the homes you can buy.

Features:

  • Available with 30-year fixed-rate Federal Housing Administration, Veterans Affairs and U.S. Department of Agriculture primary loans.
  • Between 2% and 5% of the primary loan amount is available for a down payment and closing costs through a no-interest, deferred-payment second lien with a 30-year term or a three-year forgivable lien.
  • Eligible for a mortgage credit certificate that gives borrowers a tax credit equal to 20% of their mortgage interest payments each year, up to an annual maximum of $2,000.

To Qualify You:

  • Must be a Texas first-time home buyer or veteran.
  • Must have a credit score of 620 or above.
  • Must have a debt-to-income ratio below 55%.
  • Must meet income and property value limits.
  • Must have approval for a mortgage with an approved lender.

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My Choice Texas Home Program

Another TDHCA-run program is My Choice Texas Home. It’s similar to My First Texas Home, except it’s open to all borrowers, including first-time home buyers and repeat buyers. It also adds the option of a Fannie Mae HFA Preferred conventional primary loan, and the program has higher income limits and no purchase price limits.

Features:

  • Available with 30-year fixed-rate FHA Preferred conventional, FHA, VA and USDA primary loans.
  • Higher income limits than the My First Texas Home program.
  • No maximum purchase price.
  • Between 2% and 5% of the primary loan amount is available for a down payment and closing costs through a no-interest, deferred-payment second lien with a 30-year term or a three-year forgivable lien.
  • Eligible for a mortgage credit certificate that gives borrowers a tax credit equal to 20% of their mortgage interest payments each year, up to an annual maximum of $2,000.

To Qualify You:

  • Must have a credit score of 620 or above.
  • Must have a debt-to-income ratio below 55%.
  • Must meet income limits.
  • Must have approval for a mortgage with an approved lender.

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Home Sweet Texas Home Program

This program is administered through the nonprofit Texas State Affordable Housing Corp. and is aimed at low-income families and underserved communities.

It offers FHA, VA and USDA loans with up to 5% of the purchase available as down payment assistance in the form of grants or three-year deferred forgivable second loans. It also offers HFA conventional loans with a three-year deferred forgivable second lien.

Features:

  • Available with 30-year fixed-rate Fannie Mae HFA Preferred, Freddie Mac HFA Advantage, FHA, VA and USDA primary loans.
  • On all loans, between 2% and 5% of the primary loan amount is available for a down payment and closing costs through a three-year deferred forgivable second lien.
  • Grant assistance between 2% and 5% of the purchase price is available with government-backed loans.
  • Eligible for a mortgage credit certificate that gives borrowers a tax credit equal to 20% of their mortgage interest payments each year, up to an annual maximum of $2,000.

To Qualify You:

  • Must have a credit score of 620 or above for government-backed loans and 640 or above for conventional loans.
  • Must meet income limits and property requirements.
  • Must have approval for a mortgage with an approved lender.

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Homes For Texas Heroes Program

If you serve your community as a firefighter, public school teacher, or one of many other professions, you might qualify for assistance through Homes for Texas Heroes. This program provides 30-year fixed-rate home loans and up to 5% down first-ance as a grant or a deferred-payment forgivable second mortgage. Buyers must meet income requirements. While the program accepts all home buyers, only first-time buyers can get a mortgage credit certificate.

Features:

  • Available with 30-year fixed-rate Fannie Mae HFA Preferred, Freddie Mac HFA Advantage, FHA, VA and USDA primary loans.
  • On all loans, between 2% and 5% of the primary loan amount is available for a down payment and closing costs through a three-year deferred forgivable second lien.
  • Grant assistance between 2% and 5% of the purchase price is available with government-backed loans.
  • Eligible for a free mortgage credit certificate that gives borrowers a tax credit equal to 20% of their mortgage interest payments each year, up to an annual maximum of $2,000.

To Qualify You:

  • Must work in one of the following occupations:
    • Classroom teacher in a K-12 public school.
    • Full-time teacher aide in a K-12 public school.
    • School librarian in a K-12 public school.
    • School nurse in a K-12 public school.
    • School counselor in a K-12 public school.
    • Nursing and Allied Health Faculty member.
    • Veteran (including active military).
    • Firefighter.
    • Emergency medical service personnel.
    • Peace officer.
    • Corrections officer.
    • County jailer.
    • Public security officer.
  • Must have a credit score of 620 or above.
  • Must meet income limits.
  • Must have approval for a mortgage with an approved lender.

Mortgage Credit Certificate Program

Offered by both TDHCA and TSAHC, the mortgage credit certificate program gives you a chance to get a tax credit equal to 20% of the mortgage interest you pay, up to $2,000 annually.

“It’s available to Texas first-time home buyers and certain veterans and can be used in conjunction with down payment assistance programs,” says Eric Bramlett, a Realtor based in Austin and owner of Bramlett Residential. “Eligibility criteria similar to those for down payment assistance programs apply, including income and purchase price limits.”

In addition, there are limits on how long you need to own your home without selling it to avoid having to repay the credit once you sell, says Mason Whitehead, a Dallas-based branch manager for Churchill Mortgage.

To find out if you qualify, take the TSAHC’s online eligibility quiz.

Local Texas Down Payment Assistance Programs

In addition to nationwide and statewide down payment assistance programs, several local home buyer assistance programs exist.

“Many local municipalities have programs to help home buyers, so you need to check with local city government offices for these,” says Whitehead. “If your city has one, many times a local lender can also participate with it or use those funds as part of your loan package.”

A good place for Texans to start searching for these local programs is the U.S. Department of Housing and Urban Development website.

Local Texas Down Payment Assistance Programs

Texas DPA ProgramDescription
Abilene First-Time Home BuyerProvides up to $5,000 for a down payment and eligible closing costs based on income and family composition.
Austin Down Payment Loan AssistanceOffers up to $40,000 in down payment and closing cost assistance to first-time home buyers who meet income limits.
Beaumont Down Payment AssistanceProvides down payment assistance of up to $14,999 to qualifying first-time home buyers.
Bryan Home Buyers Down Payment and Closing Costs AssistanceProvides $3,500 to $14,000 — more when appropriate — via a deferred zero-interest five-year lien.
College Station Down Payment AssistanceGives qualifying home buyers up to $50,000 in deferred and non-interest-bearing loans for gap financing assistance.
Corpus Christi Home Buyer Assistance ProgramProvides down payment assistance up to $25,000 and closing cost assistance up to $10,000 to buyers who meet income requirements.
El Paso HFC FTHB ProgramProvides grants to eligible buyers for down payment assistance of 1% to 5% on homes with a purchase price of $349,525 or less.
Fort Worth Home Buyer Assistance ProgramProvides down payment and closing cost assistance of up to $25,000 to eligible first-time home buyers.
Frisco Down Payment Assistance ProgramOffers up to $10,000 in forgivable loans for down payment assistance to employees of the City of Frisco or the Frisco Independent School District.
Galveston Home Buyer AssistanceProvides down payment and closing cost assistance of up to $14,500 to eligible first-time home buyers with a forgivable zero-interest second loan.
Houston Home Buyer AssistanceProvides first-time income-qualified home buyers with up to $50,000 assistance in the form of a no-interest forgivable loan.
Irving Home Buyer Down Payment AssistanceProvides down payment assistance to qualifying first-time buyers in the form of a no-interest, deferred forgivable loan.
Laredo HOME ProgramProvides no-interest forgivable loans up to $30,000 for first-time buyers who live in the home as their primary residence for 10 years.
Midland Home Buyer Assistance ProgramOffers up to $15,000 in assistance to low-income, first-time home buyers of a “decent, safe and sanitary home.”
Plano First-Time Home Buyers AssistanceProvides down payment assistance up to $55,000 in the form of block grants and no-interest forgivable loans to qualifying first-time buyers.
San Antonio Homeownership Incentive ProgramsProvides up to $30,000 in down payment and other cost assistance, with various loan types available.
Waco Home Buyer Down Payment AssistanceProvides qualifying first-time home buyers with up to $25,000 of down payment and closing cost assistance.
Wichita Falls HOME First Time Home Buyer ProgramOffer qualifying low-to-moderate-income families and individuals up to $10,000 for down payment or closing costs or to reduce mortgage principal.

How To Apply For Texas Down Payment Assistance Programs

Applying for down payment assistance programs can be daunting, but fortunately, there are clear places to begin. For instance, the Texas State Affordable Housing Corp. website has an online eligibility quiz.

For Texas Department of Housing and Community Affairs programs, contact an approved lender who can prequalify you for the program.

Home Buyer Education Requirement

Many first-time home buyer programs in Texas require applicants to complete a home buyer education course to ensure they understand the costs and responsibilities of homeownership, says Bramlett.

Whitehead says taking the course is usually not too burdensome. “The course is online, and I’ve never had anyone say it was difficult,” he says. “It is usually an hour or two to complete it. Some classes can also be done in person, but most people prefer to do them online.”

FAQ

Here are answers to common questions about Texas first-time buyer assistance programs.


Sometimes. Some loans do not need to be repaid if you meet the requirements, such as living in the home as your primary residence for a specific time without selling or refinancing your mortgage. Other deferred-payment loans don’t have to be repaid until you sell, refinance or pay off your home. If you fail to meet the conditions of the loan in some way, the lender can require you to repay it.

If you haven’t owned a home in the three years before applying for assistance, you are considered a first-time buyer in Texas.

For most programs, a credit score of 620 or above is required.

The Bottom Line

If you need some help affording a home in Texas, there are plenty of options. Borrowers who qualify have access to grants, deferred-payment loans, and forgivable loans that can be used to make a down payment on a home and pay closing costs. Most programs also offer first-time buyers the chance to earn a tax credit based on how much they spent on mortgage insurance. Most programs require borrowers to meet credit and income requirements and take a home buyer education course. However, for buyers who qualify, down payment assistance programs can help them achieve their goal of buying a home in Texas.

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