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State Guide

First-Time Homebuyer Programs in Texas

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Overview

Texas offers one of the most comprehensive first-time homebuyer assistance ecosystems in the country. Programs are administered primarily through two state agencies: the Texas Department of Housing and Community Affairs (TDHCA) and the Texas State Affordable Housing Corporation (TSAHC). Both agencies offer 30-year fixed-rate mortgages paired with down payment and closing cost assistance, and most programs can be stacked with a federal Mortgage Credit Certificate (MCC) for ongoing tax savings. Texas also has a large network of approved lenders trained on these programs, making access straightforward compared to many other states.

Down Payment Assistance Programs

  • TDHCA My First Texas Home. A 30-year fixed-rate mortgage for first-time buyers with down payment and closing cost assistance of up to 5% of the loan amount, structured as a forgivable second lien. Available statewide and compatible with FHA, VA, USDA, and conventional loans.
  • TSAHC Homes for Texas Heroes. Designed for teachers, peace officers, firefighters, EMS personnel, corrections officers, nurses, and veterans. Includes a fixed-rate loan and down payment assistance of 3% to 5% as a grant or forgivable second lien. The grant option does not require repayment under any circumstances.
  • TSAHC Home Sweet Texas Home. Open to any low- to moderate-income Texas buyer regardless of profession. Pairs a 30-year fixed-rate loan with 3% to 5% down payment assistance as a grant or forgivable second. Income limits apply.
  • Texas Mortgage Credit Certificate (MCC). A federal tax credit worth up to $2,000 per year for the life of the loan, applied directly against your federal income tax bill - not a deduction, a dollar-for-dollar credit. Issued at closing and can typically be combined with TDHCA or TSAHC loans for maximum benefit.

Income and Purchase Price Limits

Income limits in Texas generally range from $90,000 to $130,000 depending on the program, county, and household size, with higher limits available in federally targeted areas. Purchase price limits typically fall between $300,000 and $450,000, varying by county and program. These figures are updated periodically - always confirm current limits with an approved lender or directly on the TDHCA or TSAHC website before proceeding.

City and County Programs Worth Knowing

Texas has some of the most active city-level homebuyer assistance programs in the country. These stack on top of state programs in many cases and are frequently overlooked by buyers who stop their research at the state level.

  • City of Houston. Houston's Harvey Recovery and Housing programs left a substantial local DPA infrastructure. The City of Houston Housing and Community Development Department offers down payment assistance of up to $30,000 for eligible buyers purchasing within city limits, structured as a forgivable loan after five years of occupancy. Income limits apply and funding is allocated in cycles - availability can vary mid-year.
  • Dallas Homebuyer Assistance Program (DHAP). The City of Dallas offers up to $60,000 in down payment and closing cost assistance for buyers purchasing within Dallas city limits, making it one of the largest city-level programs in the state. Assistance is structured as a forgivable loan forgiven after five years. Income limits are tied to area median income and the home must be the buyer's primary residence.
  • San Antonio. The City of San Antonio's Homeownership Incentive Program (HIP) provides up to $30,000 in down payment assistance for buyers purchasing within San Antonio city limits. A separate Neighborhood Revitalization Program targets specific ZIP codes with additional incentives. Both are administered through the city's Neighborhood and Housing Services Department.
  • Austin. The Austin Housing Finance Corporation (AHFC) administers the Down Payment Assistance Program for buyers purchasing within Austin city limits. Given Austin's home prices, assistance amounts and income limits are structured to address the local affordability gap. The program has historically provided up to $40,000, though amounts and funding cycles should be confirmed directly with AHFC given Austin's rapidly changing market conditions.
  • Fort Worth. The City of Fort Worth offers a Homebuyer Assistance Program providing up to $14,999 in down payment and closing cost assistance for eligible buyers, structured as a forgivable loan after five years. The program targets low- to moderate-income buyers and requires completion of a homebuyer education course.

Texas city programs can exhaust their funding mid-year and amounts change between funding cycles. Always confirm current availability directly with the city agency or an approved lender before counting on local assistance in your offer strategy.

FHA Loan Requirements in Texas

FHA loans - insured by the Federal Housing Administration - are one of the most commonly used mortgage products for first-time buyers in Texas and work alongside most TDHCA and TSAHC assistance programs.

Minimum requirements to qualify for an FHA loan in Texas:

  • Credit score: 580 or higher for 3.5% down payment. Scores between 500 and 579 may qualify with 10% down at lender discretion.
  • Down payment: 3.5% of the purchase price with a 580+ credit score.
  • Debt-to-income ratio (DTI): Generally 43% or below, though lenders may approve up to 50% with compensating factors such as significant cash reserves or strong employment history.
  • Employment history: Two years of consistent employment or income history required.
  • Primary residence: FHA loans are for owner-occupied properties only - not investment properties or vacation homes.
  • Mortgage insurance: FHA loans require an upfront mortgage insurance premium (UFMIP) of 1.75% of the loan amount, plus an annual premium ranging from 0.45% to 1.05% depending on loan term and down payment size.

FHA loan limits in Texas for 2025:

FHA loan limits vary by county. In most Texas counties the standard limit is $524,225 for a single-family home. High-cost counties including some Austin and Dallas-area markets have higher limits. Check the current limit for your specific county at HUD.gov before assuming eligibility.

FHA property requirements in Texas:

The home being purchased must meet FHA minimum property standards. An FHA-approved appraiser will flag issues including structural deficiencies, roof condition, working utilities, and health or safety hazards. Properties that fail FHA inspection can still close if the seller agrees to make required repairs before closing, or if the buyer uses an FHA 203(k) rehabilitation loan.

Stacking FHA with Texas state assistance:

FHA loans are compatible with both TDHCA My First Texas Home and TSAHC programs. A common structure for Texas first-time buyers is an FHA loan for the primary mortgage, a TSAHC or TDHCA down payment assistance grant to cover the 3.5% down payment and closing costs, and a Texas MCC for ongoing annual tax savings. An approved lender who works with Texas state programs daily can confirm which combination applies to your income, credit profile, and target county.

How to Apply

  1. Confirm you have not owned a primary residence in the past three years (waived in federally targeted areas and for qualifying veterans).
  2. Check your credit score - 580 is the minimum for FHA with 3.5% down, and most Texas state programs require a 620 minimum.
  3. Check current income and purchase price limits for your county at TDHCA.state.tx.us or TSAHC.com.
  4. Research city-specific programs in your target market - Dallas, Houston, San Antonio, Austin, and Fort Worth all offer assistance that can stack on top of state programs.
  5. Choose an approved lender from the program's participating lender directory - the lender must be approved by both the state agency and FHA.
  6. Complete a HUD-approved homebuyer education course, required by most Texas programs.
  7. Apply through your approved lender, who will submit the state assistance application on your behalf during the mortgage process.

FAQ

What credit score do I need for first-time homebuyer programs in Texas?

Most TDHCA and TSAHC programs require a minimum credit score of 620. FHA loans allow scores as low as 580 for 3.5% down, but the state assistance programs layered on top typically set 620 as their floor. If your score is between 580 and 619, an FHA loan is still available - you just may not qualify for the state down payment assistance simultaneously.

Can I use down payment assistance with an FHA loan in Texas?

Yes. FHA loans are explicitly compatible with both TDHCA and TSAHC down payment assistance programs. This is one of the most common loan structures used by first-time buyers in Texas - an FHA loan handles the mortgage, and the state assistance covers the down payment and closing costs.

Can I stack city programs with state programs in Texas?

In most cases, yes. Dallas, Houston, San Antonio, Austin, and Fort Worth all offer city-level assistance that is designed to layer on top of state programs. The key requirement is that your lender must be approved for both the state program and the city program. Confirm stacking eligibility with your lender before submitting an offer, as some programs have restrictions on combined assistance amounts.

Do I have to be a first-time buyer to use these programs?

Under most Texas program rules, a first-time buyer is anyone who has not owned a primary residence in the past three years. If you owned a home but sold it more than three years ago, you likely qualify. Veterans and buyers in federally targeted areas are often exempt from the first-time buyer requirement entirely.

How long does it take to close using a Texas state program?

Expect 30 to 45 days, which is comparable to a standard mortgage timeline. State program loans do not inherently take longer, but working with a lender experienced in TDHCA and TSAHC programs reduces the risk of delays from paperwork or compliance requirements.

Where do I find a participating lender for Texas first-time buyer programs?

Both TDHCA and TSAHC publish searchable directories of approved lenders on their websites. Search "TDHCA participating lenders" or "TSAHC approved lenders" to find current lists filtered by city or county.