Texas Down Payment Assistance: Every Program Available in 2026

The down payment is what stops most first-time buyers before they even start. If you're buying in Texas, it shouldn't. The state has built an infrastructure of down payment assistance that can cover your entire down payment, contribute to closing costs, and in some cases, reduce your annual federal tax bill — all at the same time.

The system has two primary state-level players — TSAHC and TDHCA — plus a network of local city programs that stack on top. Understanding how each one works, and which ones you can combine, is how you get from "I can't afford to buy yet" to keys in hand.

TSAHC: Texas State Affordable Housing Corporation

TSAHC is a state-chartered non-profit that offers 30-year fixed-rate mortgages paired with down payment assistance. What makes TSAHC attractive is the structure of its assistance: you can choose between a non-repayable grant and a forgivable second lien, and you don't need to be a first-time buyer to qualify.

Home Sweet Texas

Designed for buyers at low-to-moderate incomes who meet county-specific household income limits. Requires a minimum FICO score of 620 for FHA, VA, and USDA loans; 640 for conventional HFA loans.

Assistance ranges from 2% to 5% of your first mortgage loan amount. On a $320,000 loan, 5% assistance equals $16,000. You choose the format:

• Non-repayable grant: You never pay it back. The tradeoff is that the grant option typically carries a slightly higher mortgage rate to offset the cost.
• 3-year forgivable second lien: Zero interest, no monthly payments. After 36 months of occupying the home as your primary residence and staying current on the first mortgage, the entire balance is forgiven. If you sell or refinance within three years, any remaining balance becomes due.

TSAHC's income limits were expanded in 2021 to 115% of the Area Median Family Income, making more moderate-income households eligible than before.

Homes for Texas Heroes

Identical in financial structure to Home Sweet Texas, but reserved for specific occupations: K-12 teachers and teacher's aides, school librarians, school counselors and nurses, police officers, public security officers, firefighters and EMS personnel, veterans and active-duty military, corrections officers, and nursing faculty.

The key difference: Texas Heroes participants receive a Mortgage Credit Certificate (MCC) at no cost. Everyone else has to pay for the MCC separately.

TDHCA: Texas Department of Housing and Community Affairs

TDHCA is a state agency — not a non-profit — running two programs for distinct buyer profiles.

My First Texas Home

Restricted to first-time buyers (defined as anyone who hasn't owned a primary residence in the past three years) and qualified veterans. Requires a minimum FICO of 640 and a maximum debt-to-income ratio of 45%.

Provides up to 5% of the first mortgage amount as a 30-year, zero-interest second lien. This is the key difference from TSAHC: there's no grant option. The assistance is always a soft second lien that comes due when you sell, refinance, or pay off the first mortgage. It doesn't forgive after three years.

MFTH can be combined with a Mortgage Credit Certificate under the "My First Texas Combo" program. This pairing is powerful: the MCC provides a direct federal tax credit worth 15% of your annual mortgage interest, which reduces your tax liability dollar-for-dollar and artificially lowers your effective DTI, helping you qualify for a larger loan amount.

My Choice Texas Home

Removes the first-time buyer requirement, making it available to repeat buyers. Same FICO and DTI requirements as My First Texas Home, but with higher income limits — more flexibility for moderate-income households who've owned before.

Assistance of up to 5% structured as either a 30-year deferred repayable second lien or a 3-year deferred forgivable second lien. Cannot be combined with an MCC.

The Mortgage Credit Certificate

The MCC converts a portion of your annual mortgage interest into a federal income tax credit at a 15% rate. The remaining 85% of interest is still deductible if you itemize. The credit reduces what you owe the IRS directly — not what you deduct, but what you owe.

For a buyer with a $300,000 mortgage at 6.5%, annual interest in year one is roughly $19,500. The 15% MCC credit equals $2,925 in direct federal tax savings per year. Over a typical seven-year holding period, that's over $20,000 in cumulative tax benefit.

The standalone MCC program is no longer available. It must be combined with a TDHCA or TSAHC first mortgage loan. TSAHC Heroes participants get it automatically; other TSAHC buyers can add it with a fee; TDHCA My First Texas Home buyers can pair it through the My First Texas Combo program.

Comparing the Programs Side by Side

Both TSAHC and TDHCA require working with an approved participating lender. Not every mortgage company or bank is on the lists. Confirming your lender is approved is step one.

Local City Programs: Stack on Top

State programs are the floor. Local programs can add significantly more.

Dallas — The Dallas Homebuyer Assistance Program (DHAP), now administered by BCL of Texas as of May 1, 2026, offers up to $50,000 (or $60,000 in High Opportunity Areas). Requires income at 80% AMI for standard applicants, up to 120% AMI for targeted occupations. Property value cap: $342,000.

Houston — The City of Houston Homebuyer Assistance Program provides up to $50,000 based on financial need. Income limit: 80% AMI. Liquid assets capped at $30,000. Five-year compliance period before forgiveness.

Austin — The Austin Down Payment Assistance Program offers up to $40,000. Income limit: 80% AMI. Forgivable over 5 years (under $14,900 assistance) or 10 years (above $14,900). Property value limit: $579,250.

San Antonio — The Homeownership Incentive Program is suspended for FY 2026 with a proposed resumption on October 1, 2026. Check back in the fall.

How to Stack Everything

Here's what an aggressive stacking strategy looks like for a first-time buyer in Dallas purchasing a $340,000 home with FHA financing:

• FHA requires 3.5% down ($11,900)
• TSAHC Home Sweet Texas provides 5% assistance ($17,500 based on loan amount after minimum down payment)
• That $17,500 covers the FHA down payment requirement with surplus left for closing costs
• A 3% seller concession ($10,200) can cover most remaining closing costs
• Add an MCC for $2,900+ in annual federal tax credits
• Add Dallas DHAP for up to $50,000 in additional assistance

In this scenario, the buyer's out-of-pocket cash to close can be reduced to essentially the earnest money and option fee — which are credited back at closing anyway.

The specific combinations that work together depend on your income, county, credit score, and loan type. Working with an approved lender who specializes in these programs is essential — they know which layers are compatible and how to structure the transaction.

For a step-by-step breakdown of how to qualify, find an approved lender, and navigate the application process, the Texas First-Time Home Buyer Guide covers each program in detail with current 2026 income limits and purchase price thresholds by county.

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