Texas First-Time Homebuyer Assistance Programs

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The Texas economy continues to grow, and an influx of residents has pushed home prices up. As of January 2025, the number of homes for sale was up 13.6 percent year-over-year, presenting more inventory for buyers than has been available over much of the last five years.

If you’re a first-time homebuyer in the state, the Texas Department of Housing and Community Affairs (TDHCA) and other organizations oversee several programs that could help you more easily afford a home. These initiatives for first-time buyers include loans and down payment assistance.

Texas first-time homebuyer programs

TDHCA My First Texas Home

Through The Texas Homebuyer Program, the TDHCA offers numerous first-time homebuyer programs, including the My First Texas Home program, a 30-year mortgage with a low interest rate and up to 5 percent in interest-free down payment assistance. You can obtain a Fannie Mae HFA Preferred conventional loan through this program, or opt for an FHA, VA or USDA loan.

• Requirements
  

  • Minimum credit score of 620
  • Income and purchase limits apply
  • Must complete a free homebuyer education course through Texas Homebuyer U

• Pros and cons
  

  Pros

  • Open to first-time buyers and veterans
  • Flexible down payment and closing cost assistance, from 2 to 5 percent of the loan amount
  • 30-year second lien with zero percent interest
  • Three-year forgivable second lien available

  Cons

  • Funds must be repaid when you sell your home, refinance or pay off your mortgage
  • Must utilize an approved lender

TDHCA My Choice Texas Home

If you’re a first-time or repeat homebuyer, TDHCA’s My Choice Texas Home program offers a similar low-rate mortgage and up to 5 percent assistance to help cover your closing costs and down payment. This assistance is a zero-interest, no-monthly payment second mortgage.

In addition to an FHA, VA or USDA loan, you can also obtain a Fannie Mae HFA Preferred conventional loan through this program.

• Requirements
  

  • A credit score of at least 620
  • Must meet property value and income limits
  • Need to be approved for a home loan by a Texas Homebuyer Program-approved lender

• Pros and cons
  

  Pros

  • Open to first-time or repeat buyers
  • Flexible down payment and closing cost assistance, from 2 to 5 percent of the loan amount
  • Higher income limits than other state programs

  Cons

  • Must utilize an approved lender
  • Funds must be repaid if the home is sold, refinanced or paid off

TSAHC Home Sweet Texas Home Loan Program

The Home Sweet Texas Home Loan Program through the Texas State Affordable Housing Corporation (TSAHC) offers a 30-year fixed-rate mortgage and up to 5 percent down payment assistance, either as a grant or second mortgage. Income, purchase price, and credit score limits apply, and buyers must complete a homebuyer education course before closing.

This program can be used to get a Fannie Mae HFA Preferred or Freddie Mac HFA Advantage conventional loan, an FHA loan, VA loan or USDA loan.

• Requirements
  

  • A credit score of at least 620
  • Must meet income and purchase price limits

• Pros and cons
  

  Pros

  • Open to first-time and repeat buyers
  • Down payment assistance can be taken as either a grant or deferred forgivable second mortgage
  • No interest and no monthly payments on second mortgages; forgiven after three years

  Cons

  • If you sell your home or refinance your mortgage before the three-year mark, you’ll need to repay funds
  • Targeted areas are more advantageous than non-targeted areas, so be mindful of your prospective home’s location

TSAHC Homes for Texas Heroes Program

If you work in a public service profession — such as a teacher, police officer or firefighter — or are an eligible veteran, you might qualify for TSAHC’s Homes for Texas Heroes Program. This program offers a 30-year mortgage along with down payment assistance up to 5 percent. Like the Home Sweet Texas Home Loan Program, the assistance can be either a grant or second mortgage.

You don’t have to be a first-time homebuyer, but your income and the home’s price can’t exceed income and purchase price limits. You can view a list of eligible occupations here.

• Requirements
  

  • A credit score of at least 620
  • Meet the program’s income and purchase price limits
  • Must work in an eligible occupation

• Pros and cons
  

  Pros

  • Open to first-time and repeat buyers
  • Down payment assistance can be taken as either a grant or deferred forgivable second mortgage
  • No interest and no monthly payments on second mortgages; forgiven after three years

  Cons

  • Only qualifying professions are eligible for this program
  • If you sell your home or refinance your mortgage before the three-year mark, you’ll need to repay funds

City-specific homebuyer assistance programs

Austin

First-time homebuyers in Austin could qualify for up to $40,000 in down payment and closing cost assistance via a forgivable loan through the city.

• Requirements
  

  • Income limits apply
  • Home price cannot exceed $579,025 and must be within Austin city limits
  • Must complete a homebuyer education course
  • Must work with an approved lender

• Pros and cons
  

  Pros

  • Open to both first-time buyers and others who qualify
  • Funds may be used flexibly within program parameters, including toward pre-paid expenses associated with buying a home

  Cons

  • Limited to a short list of lenders

Dallas

The Dallas Homebuyer Assistance Program (DHAP) is designed to provide purchase assistance for low- and moderate-income buyers. A home price limit of $342,000 applies, regardless of whether the purchase is an existing home or a new construction.

• Requirements
  

  • Must meet income and property price limits
  • Home must be within Dallas city limits
  • Must complete a homebuyer education course and get prequalified by a program-approved lender before applying

• Pros and cons
  

  Pros

  • Homes in qualifying areas may be eligible for up to $60,000 in assistance, depending on buyer eligibility
  • Multiple program extensions offer additional financing opportunities for qualifying Dallas residents

  Cons

  • Properties must appraise for the sale price
  • Applicants must have an executed real estate sales contract and lender approval for a first mortgage

Fort Worth

Through its Homebuyer Assistance Program, the City of Fort Worth offers up to $25,000 toward a down payment and closing costs for qualified buyers looking to purchase a home within city limits. Sales price maximums apply — $309,000 for existing homes or $329,000 for new constructions — and buyers must work with an approved lender.

• Requirements
  

  • Income and purchase price limits apply
  • Home must be located within Fort Worth city limits
  • Must work with an approved lender
  • Requires a minimum homebuyer contribution of $1,000 or two percent of the purchase price, whichever is less
  • You need to live in the home for 10 years (up to $25,000 in assistance) or five years (up to $14,999 in assistance)
  • Requires cash reserves equal to two mortgage payments, and they cannot be gift funds
  • Must complete a homebuyer education course

• Pros and cons
  

  Pros

  • Tiers of assistance are available based on how long you expect to occupy the property
  • Funds can be used for down payment and closing costs or for the down payment alone

  Cons

  • Strict qualifying criteria, including having a cash reserve in place to cover the required homeowner contribution and two months’ worth of mortgage payments
  • You’re responsible for any out-of-pocket costs associated with the home purchase, including earnest money, option fee, home inspection and appraisal

Houston

First-time buyers may qualify for assistance in Houston, where the entire application may be completed via an online portal. The city has several active homebuyer programs, including a homebuyer assistance program that provides qualified buyers with up to $50,000 that can be used for eligible purchase-related expenses. The assistance comes in the form of a zero-percent interest, forgivable loan.

• Requirements
  

  • Income and liquid asset limitations apply
  • Loan is forgivable after five years
  • Must be located within City of Houston jurisdiction
  • Must be able to obtain a 30-year fixed-rate mortgage for the home, including a preapproval letter from your lender
  • Must complete a homebuyer education course

• Pros and cons
  

  Pros and cons

  Pros

  • No minimum credit score
  • No purchase price cap
  • Funds can be used for down payment and closing costs, buying down the mortgage interest rate or reducing your loan principal

  Cons

  • If you sell or move out of the home before the end of five years, you’ll need to repay a portion of the original loan amount
  • Preapproval letters are only valid for 120 days and cannot be extended due to program funding limitations

San Antonio

Homeowner incentive programs (HIPs) through the City of San Antonio offer options to help buyers afford the down payment on a home. HIP 80 and HIP 120 have different requirements and program benefits.

HIP 80: Lends between $1,000 and $30,000 to qualifying buyers as a second mortgage with zero interest. Up to $14,999 will be forgiven at 100 percent after you live in the home for five years; up to $30,000 will be forgiven at 100 percent after you live in the home for 10 years.

• Requirements
  

  • Income limits apply based on household size, starting at $49,600
  • Purchase price limits apply ($263,000 for existing properties or $278,000 for new constructions)
  • Homebuyer education class required
  • Home must be within San Antonio city limits
  • An earnest money deposit of at least $500 is required

• Pros and cons
  

  Pros

  • Loan is 100 percent forgivable over a 10-year period
  • Requires no payments by the homebuyer
  • Can provide more assistance than HIP 120

  Cons

  • Lower purchase price limits than HIP 120
  • Buyers must prequalify for a first-lien mortgage, as this a second lien based on the homeowner’s financial need

HP 120: Lends between $1,000 and $15,000 as a zero-interest, no-payment second loan. The loan is 75 percent forgivable after 10 years, with 25 percent loaned perpetually until the home is either sold, transferred or refinanced with cash back.

• Requirements
  

  • Income limits apply based on household size, starting at $74,350
  • Purchase price limits apply ($305,200 for existing properties or $325,800 for new constructions)
  • Homebuyer education class required
  • Home must be within San Antonio city limits
  • An earnest money deposit of at least $500 is required

• Pros and cons
  

  Pros

  • Funds may be used toward a down payment or other approved costs associated with buying a home
  • Open to both first-time buyers and eligible buyers who have otherwise been displaced
  • Higher purchase price limits than HIP 80

  Cons

  • Less assistance than HIP 80
  • Buyers must prequalify for a first-lien mortgage, as this a second lien based on the homeowner’s financial need

Other first-time homebuyer loan programs

A mortgage credit certificate (MCC) is a federal tax credit for a percentage of your annual mortgage interest. The credit is equal to up to $2,000 per year.

You can combine the MCC with a My First Texas Home loan, but you’re not required to have that type of loan in order to be eligible. The certificate is only available to first-time homebuyers and veterans who are within income and price limits.

In addition to MCCs and the Texas state homebuying programs, consider any of the nationally available first-time buyer loan programs, including:

• FHA loans – If you have a lower credit score or limited savings, consider an FHA loan. These loans are widely available, have a minimum credit score of 580 and require a down payment as little as 3.5 percent.
• VA loans – If you’re a member of the military or veteran, you could qualify for a VA loan, which doesn’t require a down payment.
• USDA loans – USDA loans don’t have a down payment requirement, but are only available to borrowers buying in a USDA-eligible rural area. You typically need a credit score of 640 or higher to qualify.
• Good Neighbor Next Door program – This HUD program has a very low down payment requirement on homes in certain areas, coupled with the ability to save 50 percent on the purchase price.

Get started

• Do your homework. If you’re interested in a Texas Department of Housing and Community Affairs program, find an approved mortgage lender to help you get the process started. It’s helpful to have your documentation handy ahead of time, including three months’ worth of bank statements and two months’ worth of recent pay stubs. If you’re considering a program through the Texas State Affordable Housing Corporation, begin by taking this eligibility quiz. You can then browse through the organization’s list of lenders to learn more.
• Work on your credit score. It’s the most important factor in determining your mortgage rate, so focus on boosting your number.
• Compare lenders. Whichever lender or loan program you decide on, compare mortgage rates and loan offers with at least three lenders. This can help you find the most affordable mortgage for your first home purchase.

Curious to learn more about homeownership in Texas? Here are some resources that might help:

• Explore other first-time homebuyer programs by state