Texas First-Time Homebuyer Programs

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Texas First-Time Homebuyer Programs: How to Qualify and Apply

Texas offers two main paths to first-time homebuyer assistance: statewide programs through TDHCA (My First Texas Home and My Choice Texas Home) and nonprofit grants through TSAHC. Your fastest next step is to take an eligibility quiz or call an approved lender that works directly with these programs.

TL;DR:

  • Texas first-time buyers can qualify for up to 5% down payment assistance through TDHCA programs, with current rates and terms changing daily.
  • TSAHC offers non-repayable grants and forgivable second liens, often layering with local programs to maximize assistance for qualifying buyers.
  • Eligibility depends heavily on a strict three-year residency rule, verified through tax transcripts, with income and purchase limits varying by county and targeted area.
  • Combining FHA loans with Texas assistance is common, but requires pre-approval from an FHA specialist due to overlays and county-specific restrictions.
  • All programs require completion of HUD-approved homebuyer education and must go through approved lenders, not direct applications from buyers.

Table of Contents

  • What Are the Main First-Time Home Buyer Texas Programs?
  • How Do TSAHC Grants Compare to TDHCA Loans?
  • Who Qualifies as a First-Time Buyer in Texas?
  • What Are the Tradeoffs of Down Payment Assistance?
  • What Does Homebuyer Education Require?
  • How Do You Apply for These Programs?
  • Do Targeted Areas Change Your Eligibility?
  • A Lender’s View on Pairing FHA Loans With Texas Assistance
  • Ready to Pair an FHA Loan With Your Down Payment Assistance?
  • Where to Verify Program Details and Limits
  • Sources

What Are the Main First-Time Home Buyer Texas Programs?

Two statewide programs, both administered by TDHCA, form the backbone of down payment help in Texas.

My First Texas Home is built exclusively for first-time buyers and qualified veterans. It pairs a 30-year fixed-rate mortgage with down payment assistance of up to roughly 5% of the loan amount, structured either as a deferred second lien that you repay later or as a 0% loan forgiven after three years. My Choice Texas Home works almost identically but drops the first-time buyer restriction, so repeat buyers can use it too.

Both programs run on daily availability set by TDHCA, meaning rates and funding can shift day to day. Before you get attached to a number, confirm current terms directly:

  • My First Texas Home: first-time buyers and veterans only, up to 5% DPA
  • My Choice Texas Home: open to any qualified buyer, similar DPA structure
  • Both use 30-year fixed mortgages with FHA, VA, USDA, or conventional financing
  • Rate Notices and the official program matrix confirm same-day terms

How Do TSAHC Grants Compare to TDHCA Loans?

TSAHC, a separate nonprofit from TDHCA, takes a different approach: some of its down payment assistance comes as an outright grant that never has to be repaid, while other options are structured as forgivable second liens.

Two flagship programs sit under TSAHC’s umbrella. Homes for Texas Heroes serves teachers, firefighters, police officers, EMS personnel, corrections officers, and veterans. Home Sweet Texas is open to any qualifying buyer regardless of profession, with similar income limits and credit requirements. Both generally look for a credit score around 620, though exact income and purchase-price ceilings shift by county.

  • TSAHC grants: non-repayable, no forgiveness period to track
  • TSAHC forgivable seconds: convert to $0 owed after a set holding period
  • Minimum credit score guidance: approximately 620
  • City and county programs (Houston, Dallas, Austin, and others) often layer on top of state assistance, sometimes adding thousands more in local funds

Local programs vary enormously. Austin’s housing department, for example, has offered assistance packages that go well beyond typical state DPA amounts in select cases, though funding and eligibility change by jurisdiction and application cycle.

Who Qualifies as a First-Time Buyer in Texas?

The definition is stricter than most people expect. You qualify as a first-time buyer if you have not held ownership interest in a primary residence during the previous three years, and if you’re married, your spouse must meet that same three-year test even if only your name goes on the loan.

Lenders verify this using three years of tax returns or IRS transcripts to confirm that you never claimed a mortgage interest deduction. If you weren’t required to file taxes in a given year, an affidavit stands in for the transcript.

  • No ownership interest in a primary residence for 36 months prior
  • Both spouses must independently satisfy the three-year rule
  • Income and purchase-price limits are set county by county, not statewide
  • Targeted census tracts often allow higher limits and can waive the first-time requirement entirely
  • Credit and debt-to-income guidance generally follows standard FHA, VA, or conventional underwriting, layered on top of program-specific minimums

What Are the Tradeoffs of Down Payment Assistance?

Not all DPA behaves the same way once you close, and the structure you choose has real consequences on the road.

A deferred repayable second lien doesn’t require monthly payments, but the balance comes due when you sell, refinance, or pay off the first mortgage. A 3-year forgivable loan wipes out that balance entirely if you stay in the home and keep the loan current for three years. A TSAHC grant is different from both. It’s a gift, not a loan, so it never becomes due at sale or refinance.

  • Deferred repayable seconds: no monthly cost, but full repayment triggered by sale or refinance
  • 3-year forgivable loans: balance disappears if you hold the loan for three years
  • Grants: no repayment obligation under any circumstance

Pro Tip: If you’re planning to sell or refinance within three years, run the math on a forgivable loan versus a straight grant before you pick a lender. The difference in what you owe at closing can be several thousand dollars.

The one tradeoff worth planning for: assistance programs sometimes carry a slightly higher interest rate than a standalone loan, and pairing DPA with an FHA loan can trigger specific underwriting rules your lender needs to walk through.

What Does Homebuyer Education Require?

Every TDHCA and TSAHC program requires a HUD-approved homebuyer education course before closing.

  1. Complete a HUD-approved course, typically 6 to 8 hours and costing $50 to $100.
  2. Keep your certificate on file. It’s generally valid for 12 to 24 months, so timing matters if your closing gets delayed.
  3. Know who’s exempt. Non-occupying co-signers usually do not have to meet the requirement, but you and your purchasing spouse do.

Lenders will also want tax transcripts proving first-time status, a residency affidavit, and a DD-214 if you’re claiming the veteran exemption.

How Do You Apply for These Programs?

Neither TDHCA nor TSAHC accepts applications directly from buyers. Everything routes through an approved lender, which is why choosing the right one early is so valuable.

  1. Take an eligibility quiz through TDHCA or TSAHC, or skip straight to contacting an approved lender who already knows the current program matrix.
  2. Get prequalified. Your lender runs automated underwriting and matches you to a compatible first mortgage, whether FHA, VA, USDA, or conventional.
  3. Let your lender submit the DPA paperwork on your behalf while you complete your education course, then move toward closing.

Reviewing a loan program guide for first-time Texas buyers before that first lender call helps you ask sharper questions about which program fits your situation.

Do Targeted Areas Change Your Eligibility?

Qualified census tracts change the math in your favor. Buying in a targeted area often raises the income and purchase-price limits you’d otherwise face, and in some cases waives the three-year first-time buyer rule altogether. Qualified veterans get a similar exception regardless of location, provided they can show a DD-214.

Don’t assume you’re priced out or disqualified until you’ve checked. Agency lists and county housing pages publish current targeted-area boundaries, and they change more often than most buyers realize.

A Lender’s View on Pairing FHA Loans With Texas Assistance

As a Full Eagle FHA-approved lender, TexasFHA works daily with buyers trying to stack an FHA loan on top of state or nonprofit down payment assistance. That layering isn’t automatic. FHA overlays, manual underwriting exceptions, and county-specific limits all affect whether a given DPA option fits your loan.

The buyers who move fastest are the ones who bring their questions to an FHA Loan Specialist before they fall in love with a house, not after.

— Gerry Nicodemus

Ready to Pair an FHA Loan With Your Down Payment Assistance?

FHA loans pair naturally with most Texas DPA programs because they already accept lower credit scores and smaller upfront cash contributions, which is exactly the gap TDHCA and TSAHC assistance is designed to close. TexasFHA works through this combination daily, matching buyers to the right first mortgage while a program’s second lien or grant covers the down payment.

If you’re not sure whether your credit profile or income fits an FHA loan alongside state assistance, start by reviewing FHA loan requirements for Texas borrowers. From there, an FHA Loan Specialist can walk through your specific county’s limits and tell you within a conversation whether you qualify and for how much.

Where to Verify Program Details and Limits

Program terms shift, so confirm the details directly before making decisions based on this guide.

Start with TDHCA’s program page for current Rate Notices and DPA availability on My First Texas Home and My Choice Texas Home. Cross-check TSAHC’s down payment assistance page for grant versus forgivable-loan terms and current credit-score guidance. For county-specific income and purchase-price limits, TSAHC’s combined limits tables break down the figures by location rather than providing a single statewide number.

For lender-side product questions, including how a DPA option interacts with FHA, VA, or conventional financing, First Choice Home Loans publishes plain-language resources on loan-type compatibility worth a look before your first lender call.

This article is general information, not a substitute for advice from a qualified financial advisor. Consult a qualified financial professional about your own circumstances before acting on anything here.

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