Down Payment Assistance Programs in Texas (2026)

Q: Do Texas DPA programs work with FHA loans?

Yes. Both TDHCA programs and TSAHC work with FHA loans . FHA’s 3.5% minimum down payment can be covered entirely by DPA, leaving buyers with only closing costs to fund out of pocket. FHA manual underwriting is allowed for TSAHC programs up to 43% DTI with a 640 FICO minimum. Ready to compare... Learn More at SuperMoney.com

Last updated 05/22/2026 by

Ante Mazalin

Edited by

Andrew Latham

Fact checked by

Andy Lee

Summary:

Texas down payment assistance is a collection of state, nonprofit, and city-run programs that provide grants or forgivable loans to help buyers cover their down payment and closing costs.

Two state agencies, TDHCA and TSAHC, run statewide programs, while major cities like Houston, Dallas, Austin, and Fort Worth each operate their own funded programs.

My First Texas Home (TDHCA): Best for first-time buyers who want a government-backed loan with up to 5% assistance and the option to have the second lien forgiven after three years.
My Choice Texas Home (TDHCA): Best for repeat buyers who want the same up-to-5% structure without a first-time buyer requirement.
TSAHC Homes for Texas Heroes: Best for teachers, first responders, veterans, and corrections officers who want a grant that never needs to be repaid.
TSAHC Home Sweet Texas: Best for income-qualified buyers who don’t work in a hero profession and want flexible DPA through a nonprofit lender network.
City programs: Best for buyers in Houston, Dallas, Fort Worth, or Austin who meet tighter income limits and want larger forgivable loans specific to their city.

Texas is the second-largest housing market in the country, and the gap between median incomes and median home prices in cities like Austin and Dallas has made down payment assistance more relevant than ever for working buyers.

Every major statewide program is accessed through a participating lender. You don’t apply directly to TDHCA or TSAHC. The right program depends on your buyer status, occupation, income, and the city you’re buying in.

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Statewide Down Payment Assistance Programs in Texas

Texas has two statewide agencies running down payment assistance programs: the Texas Department of Housing and Community Affairs (TDHCA) and the Texas State Affordable Housing Corporation (TSAHC). Both reach buyers in every county, including rural areas where city programs don’t apply.

Program	DPA Amount	Structure	First-Time Buyer Required	Min FICO
My First Texas Home (TDHCA)	2%–5% of loan	30-yr deferred repayable or 3-yr forgivable second lien	Yes (veterans exempt)	620
My Choice Texas Home (TDHCA)	2%–5% of loan	30-yr deferred repayable or 3-yr forgivable second lien	No	620
TSAHC Homes for Texas Heroes	2%–5% of loan	Outright grant (up to 4%) or 3-yr forgivable lien (up to 5%)	No	620
TSAHC Home Sweet Texas	2%–5% of loan	Outright grant (up to 4%) or 3-yr forgivable lien (up to 5%)	No	620
Texas MCC	15% of annual mortgage interest, up to $2,000/yr tax credit	Annual tax credit	Yes (with TSAHC, must pair with DPA)	No minimum

My First Texas Home

My First Texas Home is TDHCA’s flagship bond program for first-time buyers. It pairs a 30-year fixed-rate FHA, VA, or USDA loan with down payment and closing cost assistance of 2% to 5% of the total mortgage loan amount.

Two DPA structures are available: A 30-year deferred repayable second lien at 0% interest (no monthly payments; balance due in full on sale, refinance, transfer, or payoff of the first mortgage), or a 3-year deferred forgivable second lien, also at 0%, fully forgiven at the 3-year anniversary if the borrower is current on the first mortgage and the home remains their primary residence.

Who qualifies: Borrowers must be first-time buyers, defined as not having owned and occupied a primary residence in the last three years. Qualified veterans who have not previously used a mortgage revenue bond program are exempt from this requirement. All borrowers must occupy the home within 60 days of closing, and the property must be in Texas. Income and purchase price limits apply and vary by county. Check the current limits at welcomehome.tdhca.texas.gov.

Minimum credit score: 620 for all FHA, VA, and USDA loans. DTI follows automated underwriting findings.

Homebuyer education: Required for all borrowers. TDHCA provides a list of approved online course options.

Recapture tax notice

Because My First Texas Home is a bond-funded program, the federal government may recapture a portion of the tax benefit if you sell within nine years, make a profit, and your income has risen above program thresholds. TDHCA provides a recapture tax notice at closing. Most borrowers are not affected. The recapture applies only when all three conditions are met simultaneously.

Additional bonus funds: TDHCA has partnered with several Housing Finance Corporations to layer extra grants on top of the standard DPA. Harris County HFC adds $1,000; McKinney HFC adds $5,000; and the Capital Area HFC adds $7,500 (Bastrop, Blanco, Burnet, Caldwell, Fayette, Lee, and Llano counties) or $2,500 (Hays and Williamson counties). These are provided as gifts with no repayment required, and are subject to funding availability.

My Choice Texas Home

My Choice Texas Home is TDHCA’s program for repeat buyers. It uses the same loan structure, DPA options, income and purchase price limits, and credit requirements as My First Texas Home. The only difference is the absence of a first-time buyer requirement.

This makes My Choice particularly valuable for buyers who owned a home in the last three years but still fall within the program’s income limits. Like My First Texas Home, it pairs with FHA, VA, or USDA loans, and the DPA is available as either a 30-year deferred repayable lien or a 3-year forgivable lien at 0%.

Homebuyer education is required, and recapture tax provisions apply in the same way as My First Texas Home.

TSAHC: Homes for Texas Heroes and Home Sweet Texas

The Texas State Affordable Housing Corporation runs two programs with identical DPA mechanics but different eligibility gates: Homes for Texas Heroes for buyers in qualifying occupations, and Home Sweet Texas for all other income-eligible buyers.

Both programs offer:

2% to 5% of the first mortgage loan as DPA
Choice of structure: outright grant (up to 4%, no repayment required) or 3-year deferred forgivable second lien (up to 5%, forgiven if home remains primary residence for three years)
30-year fixed-rate FHA, VA, USDA, or conventional loans (Fannie Mae HFA Advantage or Freddie Mac HFA Preferred)
Minimum 620 credit score; no maximum DTI with AUS approval
Income limits vary by county. Check current limits at tsahc.org

Homes for Texas Heroes qualifying occupations: Full-time public school teachers, teacher aides, school librarians, school counselors, and school nurses; police officers and public security officers; firefighters and EMS personnel; veterans and active military; corrections and juvenile corrections officers; nursing faculty and allied health faculty at accredited Texas institutions. Heroes can also get the MCC for free (see below). Teachers and first responders looking for additional profession-specific programs can find more options in SuperMoney’s teacher DPA guide and first responder DPA guide.

No first-time buyer requirement for either TSAHC program. Repeat buyers qualify as long as they meet income limits.

Grant vs. forgivable lien: which is better?

The grant option carries a slightly higher interest rate on the first mortgage than the 3-year forgivable lien. If you plan to stay in the home well past three years, the forgivable lien typically produces a lower total cost because the rate premium on the grant compounds over 30 years. If there’s any chance you’ll refinance or sell within three years, the grant removes the repayment risk entirely.

Texas Mortgage Credit Certificate (MCC)

The MCC converts a portion of the mortgage interest you pay each year into a direct federal income tax credit, not a deduction. The credit rate through TSAHC is 15%, which means if you pay $12,000 in mortgage interest, you get a $1,800 tax credit directly off your federal tax bill. The annual maximum is $2,000.

This credit reduces your effective tax liability every year for the life of the loan, and it can help you qualify for a larger mortgage by lowering your effective cost of housing.

How to get it: Through TSAHC, the MCC must be combined with their DPA program. It is no longer available as a standalone product. It is available exclusively to first-time buyers (or buyers in targeted census tracts, or qualified veterans). Heroes receive the MCC at no cost; other buyers pay a standard issuance fee through the lender.

Through TDHCA, the MCC is also available to first-time buyers purchasing with a My First Texas Home bond loan but cannot be combined with a TDHCA DPA loan simultaneously on bond-funded transactions. Borrowers choosing the MCC through TDHCA should discuss the tradeoff with their lender.

Houston Down Payment Assistance

The City of Houston’s Homebuyer Assistance Program (HAP) provides up to $50,000 to income-qualified first-time buyers purchasing within Houston city limits. The assistance is a 0% interest forgivable loan secured by a lien on the property, forgiven in full after five years of owner-occupancy. If you sell or move before five years, you repay a prorated portion of the original amount.

Eligibility:

First-time buyer (or not owned in the last three years)
Household income at or below 80% of Area Median Income for Houston
U.S. citizen or permanent resident (applies to co-applicant and spouse)
Liquid assets must be under $30,000 at eligibility determination and at closing
Minimum $350 buyer contribution (can be inspection fee, down payment, or appraisal)
DTI requirements: 33% front-end, 45% back-end
No credit score minimum — the program does not consider credit score during underwriting

Property requirements: The home must pay property taxes to the City of Houston. There is no maximum purchase price, but the DTI limits will naturally cap what buyers can afford. The program does not cover properties in the Fifth Ward/Kashmere Gardens UPRR sampling zone while an EPA environmental investigation is ongoing.

Funding note: The program operates on a first-come, first-served basis and pre-approval letters expire after three months with no extensions. Contact the City at 832-394-6200 or apply through the online portal at houstontx.gov/housing/hap.html.

Can you stack Houston HAP with TSAHC?

Houston HAP acts as a second lien, and TSAHC programs also require a second lien position. Stacking both is generally not permitted because two second liens cannot occupy the same position. Most buyers use either HAP or a TSAHC program, not both. Confirm with your lender before applying.

Harris County Down Payment Assistance

Harris County’s Down Payment Assistance Program (DAP) covers buyers purchasing in the unincorporated areas of Harris County, outside the city limits of Houston, Pasadena, and Baytown. As of November 18, 2025, the maximum award increased from $23,800 to $40,000, reflecting updated federal program year guidelines.

The award covers down payment, prepaid items, closing costs, a 3-year home warranty (up to $1,800), flood insurance for year one (up to $3,000), homeowner’s insurance including wind and hail coverage for year one (up to $5,700), and an elevation certificate if required. After deducting all eligible incentives, the base amount available for down payment, prepaid items, and closing costs is up to $27,100.

Affordability period: 5 years for awards under $25,000; 10 years for awards of $25,000 to $40,000.

Eligibility:

First-time buyer (not owned in the last three years)
Minimum credit score: 580
Front-end DTI ≤39%; back-end DTI ≤42%
Minimum $1,000 buyer contribution
Liquid assets under $30,000
Maximum purchase price: $285,000 (existing) / $296,000 (new construction)

How to apply: Contact a participating lender. The program is not applied for directly through Harris County HCD. Contact the department at 832-927-4955 or email hcd@harriscountytx.gov for a current lender list.

Dallas Down Payment Assistance

The Dallas Homebuyer Assistance Program (DHAP) transitioned to a new administrator effective May 1, 2026. Business and Community Lenders of Texas (BCL of Texas) now manages the program. Contact BCL directly at dhap@bcloftexas.org or (214) 919-1866, or visit bcloftexas.org/dhap.

DHAP provides up to $50,000 in assistance for buyers in most Dallas neighborhoods, and up to $60,000 in designated High Opportunity Areas. The assistance is a 0% interest deferred loan, with no monthly payments, prorated for forgiveness annually based on the affordability period.

Eligibility (standard DHAP):

Income at or below 80% AMI (4-person household limit: $93,850 as of June 2025)
Maximum purchase price: $342,000 for both existing homes and new construction
Housing payment may not exceed 35% of gross monthly income
Home must be within Dallas city limits

Anti-Displacement extension: Buyers who have lived in Dallas for at least 10 years and have incomes between 50% and 120% AMI may qualify for up to $50,000 through the Anti-Displacement Homebuyer Assistance Program, which requires purchase in designated targeted areas. This extension is also now managed by BCL of Texas.

Targeted Occupations extension: As of this writing, funding for the Targeted Occupations extension has been fully expended. That extension served healthcare workers, educators, and protective services professionals.

Fort Worth Down Payment Assistance

The City of Fort Worth’s Homebuyer Assistance Program provides up to $25,000 in mortgage assistance for first-time buyers purchasing within Fort Worth city limits. The assistance is a 0% interest deferred loan, forgivable over an affordability period of five years for amounts up to $14,999, or ten years for amounts up to $25,000.

Eligibility: Buyers must be first-time buyers, meet income requirements, and complete a HUD-approved homebuyer education course. The home must be within Fort Worth city limits.

Fort Worth’s $25,000 HAP can be stacked with a TSAHC DPA loan and an MCC. Borrowers working with an approved lender familiar with both programs can layer all three to maximize assistance. Contact the City of Fort Worth Neighborhood Services at fortworthtexas.gov.

Austin Down Payment Assistance

The Austin Housing Finance Corporation (AHFC) provides up to $40,000 in down payment and closing cost assistance to income-eligible first-time buyers purchasing within Austin’s Full Purpose city limits. The assistance is a 0% interest deferred forgivable second lien: fully forgiven after 5 years for loans up to $14,900, and after 10 years for loans between $14,901 and $40,000.

Eligibility:

First-time buyer
Household income at or below 80% of Area Median Income
Must purchase within Austin’s Full Purpose city limits (not ETJ or neighboring cities)
Must complete a HUD-approved homebuyer education course
Single-family homes and condominiums qualify; multi-family properties do not

Austin’s housing market is among the most expensive in Texas, and the $40,000 ceiling is meaningful, but buyers should verify current funding availability directly with AHFC, as program funds are subject to annual appropriation. For more on navigating high-cost markets, SuperMoney’s guide to winning a bidding war without overpaying covers strategies specific to competitive environments.

San Antonio Down Payment Assistance

The City of San Antonio runs two Homeownership Incentive Programs (HIP): HIP 80 for lower-income buyers and HIP 120 for moderate-income buyers. Both provide 0% interest second loans for down payment and closing costs within San Antonio city limits.

Important funding notice: As of this article’s publication date, both HIP 80 and HIP 120 are not accepting new applications for FY 2026. The City of San Antonio has indicated funding may become available again on October 1, 2026, if renewed by City Council. Buyers should monitor updates at sa.gov or call the Neighborhood and Housing Services Department at 210-207-6459.

When funding is active:

HIP 120: Lends $1,000–$15,000. Of that, 75% is forgiven over 10 years; 25% is a perpetual loan repaid at sale or transfer. Income up to 120% AMI (4-person household: $115,900 per 2025 limits). Max price: $305,200 existing / $325,800 new construction.

HIP 80: Lends $1,000–$30,000. 100% forgivable: over 5 years for loans up to $15,000 and over 10 years for loans between $15,001 and $30,000. Income up to 80% AMI (4-person: $77,300 per 2025 limits). Max price: $263,000 existing / $278,000 new construction.

Both programs require a $500 earnest money deposit, a HUD-approved 8-hour homebuyer education class, and qualification for a first-lien mortgage through a private lender.

Other Ways to Lower Your Down Payment in Texas

State and city programs are the primary tools, but several national programs layer on top or serve buyers who don’t qualify for income-limited assistance.

Fannie Mae HomeReady and Freddie Mac Home Possible reduce the minimum down payment to 3% for buyers at or below 80% of Area Median Income. HomeReady requires a 620 credit score; FHA loans have the same threshold. Home Possible requires a 660 minimum for purchase loans.

VA loans eliminate the down payment requirement entirely for eligible veterans and active military. Texas is home to major military installations — Fort Cavazos, Fort Sam Houston, Joint Base San Antonio — and a large veteran population. One cost to account for: VA loans carry an upfront funding fee of 2.15% of the loan amount for first-time users at 0% down (3.3% for subsequent use), though this can be rolled into the loan.

Homes for Heroes is a national program that provides an average of $3,000 in savings on realtor and lender fees, not a down payment check, for healthcare workers, teachers, military, law enforcement, and firefighters. Veterans looking for more specific options can read SuperMoney’s veterans DPA guide.

Nurse Next Door and Teacher Next Door provide grants of up to $9,000 plus additional DPA of up to $24,000 (just over $33,000 total potential assistance) through their respective programs. Neither requires first-time buyer status. Nurses can find program details at nursenextdoorprogram.us.

Leasehold homeownership is a less familiar path that separates land ownership from home ownership. You own the structure and lease the land at a reduced rate, which can cut 20–30% off the total purchase price in some markets. Jubilee is one of the leading national providers of this model; the full range of trade-offs of leasehold homeownership are worth reviewing before deciding if it’s right for you.

Down payment assistance with lower credit scores is possible through several Texas programs. Houston HAP has no credit score minimum, Harris County DAP accepts scores down to 580, and TSAHC accepts 620. SuperMoney’s guide on qualifying for DPA with bad credit covers the full range of options.

Key takeaways

TDHCA and TSAHC both offer 2%–5% DPA statewide. TDHCA’s My First Texas Home requires first-time buyer status (veterans exempt); My Choice Texas Home and both TSAHC programs do not.
TSAHC’s grant option requires no repayment but carries a slightly higher rate; the 3-year forgivable lien typically costs less over 30 years if you stay in the home.
The Texas MCC converts 15% of annual mortgage interest into a dollar-for-dollar federal tax credit (up to $2,000/year) and must be paired with TSAHC DPA. It is no longer available as a standalone product through TSAHC.
Houston HAP offers up to $50,000 with no credit score minimum, but pre-approval letters expire in three months and funding is first-come, first-served.
Harris County DAP increased its maximum award to $40,000 in November 2025, but only covers unincorporated county areas, not Houston city limits.
Dallas DHAP transferred to BCL of Texas management on May 1, 2026. Contact dhap@bcloftexas.org for current applications.
San Antonio’s HIP programs are not accepting new applications in FY 2026. Funding may resume October 1, 2026 if renewed by City Council.
Most Texas DPA programs, including TSAHC and TDHCA, require homebuyer education. The most widely used HUD-approved provider, Framework, charges $75 for its 4–6 hour online course.

Frequently Asked Questions

Can I combine My First Texas Home with a city program like Houston HAP?

Generally no. Both programs use a second lien, and lenders can’t place two second liens on the same property. Most buyers choose one or the other. If you’re buying in Houston, compare the Houston HAP amount to 5% of your loan amount. Whichever is larger often wins. Talk to a lender familiar with both programs before deciding.

Does Texas have down payment assistance for repeat buyers?

Yes. My Choice Texas Home (TDHCA) and both TSAHC programs, Homes for Texas Heroes and Home Sweet Texas, have no first-time buyer requirement. Income limits still apply. The DPA guide for non-first-time buyers covers the full national picture.

What credit score do I need for Texas down payment assistance?

It depends on the program. Houston HAP has no credit score minimum. Harris County DAP accepts 580. TDHCA and TSAHC programs both require 620. If your score is below 620, start with Houston or Harris County programs and work on improving your credit while you save. SuperMoney’s guide on DPA with bad credit has specific steps.

Is down payment assistance taxable income in Texas?

DPA structured as a forgivable loan is generally not treated as taxable income. It’s a loan that gets forgiven, not a wage or prize. Grant-style DPA can technically be taxable income, but in practice most lenders and tax professionals treat HUD-compliant grants as non-taxable because they’re conditioned on homeownership use. Consult a tax professional for your specific situation.

What is the income limit for Texas down payment assistance?

It varies by program and county. TDHCA and TSAHC income limits are set by county and household size and are updated annually. Check down payment assistance income limits for a broader overview, then verify current Texas-specific figures at welcomehome.tdhca.texas.gov or tsahc.org. Houston HAP uses 80% AMI for the Houston metro. Dallas DHAP uses 80% AMI for the Dallas metro.

How long does it take to get down payment assistance approved in Texas?

TDHCA and TSAHC work through lenders, so the timeline is tied to your mortgage process, typically 30 to 45 days from application to close. City programs vary more: Houston HAP estimates about six weeks from complete application submission. Dallas DHAP timelines depend on BCL of Texas processing capacity. Apply early and have all documents ready before going under contract.

Do Texas DPA programs work with FHA loans?

Yes. Both TDHCA programs and TSAHC work with FHA loans. FHA’s 3.5% minimum down payment can be covered entirely by DPA, leaving buyers with only closing costs to fund out of pocket. FHA manual underwriting is allowed for TSAHC programs up to 43% DTI with a 640 FICO minimum.

Ready to compare lenders who work with Texas DPA programs? Compare mortgage lenders on SuperMoney to find one familiar with TDHCA, TSAHC, and city programs in your area.

Down Payment Assistance in Other States

Programs vary significantly by state. Income limits, assistance amounts, forgiveness terms, and lender networks all differ. These guides cover verified program details for five other states.

Oregon: OHCS’s Flex Lending program provides 4–5% of the loan amount as a second mortgage paired with a fixed-rate first, and the OHCS DPA Program reaches up to $60,000 for first-time and first-generation buyers at or below 100% AMI.
New Jersey: NJHMFA provides $15,000 as a zero-interest second mortgage that becomes fully forgivable after five years of continuous occupancy.
Massachusetts: MassHousing provides $25,000 at 0% deferred, and ONE+ reaches up to $50,000 for buyers in 29 Gateway Cities.
Virginia: Virginia Housing’s DPA Grant delivers 2–2.5% of the purchase price as a true gift, never repaid. DHCD’s deferred loan reaches $50,000 for buyers at or below 60% AMI.
Florida: Florida Housing’s FL Assist provides $10,000 at 0% deferred for 30 years. Hometown Heroes reaches up to $35,000 for Florida workers. Orange County offers tiered assistance up to $70,000.

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