Texas First Time Home Buyer Programs 2026: DPA Guide

For how Texas compares with other states, and for FHA, VA and USDA details, see our national first-time home buyer grants guide.

Texas Down Payment Assistance Programs Compared (2026)

Texas has 7 statewide options from two state-chartered agencies, and they differ most in what happens when you sell. The Texas Department of Housing and Community Affairs (TDHCA) is the state agency; the Texas State Affordable Housing Corporation (TSAHC) is a nonprofit the Legislature created. Both work only through approved lenders, so you never apply to the agency directly.

Homes for Texas Heroes uses the same assistance as Home Sweet Texas, with higher income limits, for full-time public K-12 teachers and aides, school librarians, counselors and nurses, police and other peace officers, firefighters, EMS personnel, county jailers, corrections officers, public security officers, nursing and allied health faculty, and veterans. According to the Homes for Texas Heroes program page, a Texas Hero who combines TSAHC's DPA with an MCC gets the MCC free, a $400 savings.

The honest headline: TSAHC's grant and the small HFC gifts are the only statewide money that's truly free. Everything else is a loan with conditions, even when it's 0% and forgivable.

How the 0% Down Payment Help Is Priced Into Your Rate

TDHCA's rate notice effective November 3, 2026 shows that the bigger the assistance, the higher your first mortgage rate: My First Texas Home on an FHA, VA or USDA loan is 6.500% with no DPA, 6.750% with 3%, 6.875% with 4% and 7.000% with 5%. Nobody hands out 0% money for free; the cost is built into the first mortgage.

Grantsights analysis of TDHCA's November 3, 2026 rate notice, using a $300,000 home and a $289,500 FHA loan (3.5% down, before the FHA upfront premium), shows what that means:

With the 5% repayable option, you pay about $1,155 more a year in interest, and you still owe the $14,475 back when you sell or refinance. Over 10 years, that's roughly $11,546 in extra payments plus the payoff. The forgivable 5% option is forgiven after 3 years, but at 8.125% it costs about $11,509 more over those first 36 months than the no-DPA rate, and the higher rate stays until you refinance.

TSAHC shows the same pattern. Its November 2, 2026 table prices a 2% grant at 7.625% against 6.750% with no DPA. On the same $289,500 loan, the 2% grant is $5,790, and the higher rate costs about $171 a month, so the grant is used up in about 34 months. That's still worth it if you can't close without the cash. It's not worth it if you could cover the gap with savings or a family gift and keep the lower rate.

Texas Income and Purchase Price Limits by County (2026)

TDHCA's limits took effect July 13, 2026, and they're set by metro area, not county, so every county in a metro shares one number. My First Texas Home and the TDHCA MCC use the same household income limits and a purchase price cap. My Choice Texas Home uses one higher income limit at 170% of area median income and no purchase price limit.

Sources: TDHCA Income and Purchase Price Limits (opens in a new tab), effective July 13, 2026; TSAHC county income limits tool, read November 3, 2026 (the tool shows no effective date).

A few rules sit behind those numbers:

• Targeted census tracts get more room. In a targeted tract in Harris County, the My First Texas Home limit rises to $124,800 for 1 or 2 people and $145,600 for 3 or more, and the price cap rises to $692,211. The first-time buyer rule is also waived there.
• Who counts differs. My First Texas Home and the MCC count everyone who'll sign the deed of trust, including a non-purchasing spouse. My Choice Texas Home counts only the borrowers on the loan application, and TSAHC's non-bond DPA without an MCC does the same.
• TSAHC has no price cap on non-bond DPA used without an MCC. Its guidelines say price limits apply only to bond DPA and MCCs.
• Texas Heroes limits are higher. TSAHC's tool shows $176,800 for Harris County and $205,870 for Dallas County for Heroes on government loans.

For how HUD sets the area median income behind these numbers, see our HUD income limits guide.

Local Programs in Houston, Dallas, San Antonio, Austin and Fort Worth

City programs offer the biggest dollar amounts in Texas, $15,000 to $75,000, but they come with lower income limits (usually 80% of area median income), price caps, longer stay requirements and limited funds. Most are funded through HUD's HOME and CDBG programs, which our HUD HOME Investment Partnerships guide explains.

Houston. The city's Homebuyer Assistance Program page (opens in a new tab) says that due to the exhaustion of available program funds, it isn't accepting or processing new applications, and pre-approval letters now expire after three months with no extensions. The Harvey Homebuyer Assistance Program 2.0, which lists up to $125,000 for Harvey-affected buyers, has put applications without pre-approval on hold. Houston's v8.0 guidelines require an 8-hour HUD-approved class, a $350 minimum buyer contribution and a fixed-rate first mortgage.

Dallas. The City of Dallas moved DHAP to Business and Community Lenders of Texas (BCL of Texas) on May 1, 2026. BCL's DHAP page lists 80% AMI limits of $67,850 for one person and $96,900 for four, effective June 1, 2026, and requires a DHAP-approved lender, a signed purchase contract and a certificate from a DHAP education provider before you start. The DHAP manual says the loan is 0% with no payments and is forgiven over 5 years for under $25,000, 10 years for $25,000 to $50,000, and 15 years above $50,000. An Anti-Displacement option offers up to $50,000 to buyers between 50% and 120% AMI who've lived in Dallas at least 10 years, with no sales price limit. The Targeted Occupations extension has spent all its funds.

San Antonio. The city's Homeownership Incentive Programs page (opens in a new tab) lists HIP 80 and HIP 120, both 0% second loans for homes inside city limits, with an 8-hour HUD-approved class and a $500 minimum earnest money deposit. Note that HIP 120 keeps 25% of the loan as a permanent lien you repay.

Austin. The city's homebuyer resources page (opens in a new tab) lists up to $40,000 for buyers in Austin's full-purpose city limits who haven't owned a home in 3 years, with a $440,000 sales price cap. The city's homebuyer education course costs $99, plus a handbook. Ask the city how the loan is repaid before you count on it.

Fort Worth. The city's HAP page (opens in a new tab) lists up to $25,000 for homes within city limits, a minimum buyer contribution of $1,000 or 2% of the price (whichever is less), and two months of reserves that can't come from gifts.

City funds and agency funds can often be layered, but not always. TSAHC's guidelines say other second liens may be allowed with its DPA only when its help is the grant, not a second lien. Ask your lender before you assume the city money stacks.

FHA, VA and USDA Loans in Texas

FHA loans start at 3.5% down, according to HUD's FHA loans page (opens in a new tab), and TDHCA's and TSAHC's down payment help is built to sit on top of FHA, VA and USDA loans. VA purchase loans often need no down payment, and USDA's guaranteed loan offers 100% financing in eligible rural areas, which covers much of Texas outside the big metros. Our USDA housing grants guide covers the rural options, and the national guide explains each loan in detail.

Two Texas-specific points matter here. TSAHC's grant works only with FHA, VA and USDA loans, not conventional. And the TDHCA and TSAHC first-time buyer rules are waived for qualified veterans, so a veteran who owned a home 2 years ago can still use My First Texas Home or the MCC.

What TDHCA and TSAHC Don't Tell You Up Front

The 5% headline is the part everyone sees. Here's what Grantsights found when we compared the agency pages with the documents lenders use.

1. The forgivable option for My First Texas Home may not be priced. TDHCA's November 2, 2026 matrix lists both a 30-year repayable and a 3-year forgivable second lien for My First Texas Home. The November 3 rate notice prices My First Texas Home only as the repayable option; the forgivable option appears only under My Choice Texas Home. Ask your lender which option it can actually lock today.
2. TSAHC's grant may be only 2%. The program pages say the grant is up to 5% of the loan. The November 2, 2026 rate table lists a grant rate only in the 2% column. The 3% to 5% options on that table are forgivable second liens.
3. The TSAHC grant has a six-month string. TSAHC's guidelines say grant assistance "does not need to be repaid after six months" from closing. Selling or refinancing in the first six months can put it back on the table.
4. TSAHC's limits documents don't match. The online county tool shows a $156,000 Home Sweet Texas limit for Harris County. A combined limits PDF still linked from TSAHC's rate page is labeled effective for locks on and after May 28, 2025 and shows $126,375. Your lender's system decides; ask which table it's using.
5. Fees still apply. TDHCA's matrices list a $319 funding fee, $80 tax service fee and $225 compliance review fee, plus a $400 MCC issuance fee with a combo loan or $1,000 for a stand-alone MCC. Lenders may also charge up to 1% in origination. TSAHC's rate page adds that lenders can charge another 0.25% on 620 to 639 FICO government loans.
6. Forgiven doesn't mean free on day one. Both agencies' forgivable loans come due in full if you sell, refinance or stop living there before 36 months. A job move in year 2 means repaying the whole amount.
7. The bond option can be cheaper. TSAHC's 5% bond second lien was priced at 6.875% on November 2, 2026, compared with 7.750% for its 5% forgivable lien, but it's repayable and limited to first-time buyers at or below 80% of area median income.

Common Mistakes and Red Flags

The most expensive mistake is picking the biggest DPA percentage without pricing the rate. A 0.5 to 1.6 point higher rate, as the TDHCA table above shows, can cost more than the assistance over the time you'll own the home.

• Red flag: anyone charging a fee for a "grant." TDHCA and TSAHC don't charge you to apply; the costs are lender and closing fees listed on your Loan Estimate. If someone asks for an upfront payment to unlock a Texas housing grant, report it at ReportFraud.ftc.gov (opens in a new tab).
• Red flag: "free money" ads with no agency name. Real Texas programs name TDHCA, TSAHC, a city, or a local housing finance corporation, and they always run through an approved lender.
• Common mistake: forgetting the non-purchasing spouse. For My First Texas Home, the MCC and TSAHC's bond option, a spouse who isn't on the loan still counts toward income and must also meet the 3-year first-time rule.
• Common mistake: ignoring recapture tax. According to IRS guidance on Form 8828 (opens in a new tab), recapture applies to a federally subsidized home sold within 9 years. TSAHC's guidelines say it's never more than 50% of your gain, and it doesn't apply with no gain, after year 9, or after a sale due to death or divorce. Many buyers underestimate it because it only shows up if their income rises and they sell at a gain.
• Common mistake: starting with a lender that isn't approved. Each program publishes its own list. A lender approved for TDHCA may not be on Dallas's DHAP list.
• Warning: wire fraud at closing. Call your title company at a number you already know before you wire any money.

How to Apply, Step by Step

Most Texas buyers can be ready in 30 to 60 days if their credit is already at 620 or above. Here's the order that avoids wasted time.

1. Check your numbers. Find your county in the table above. Count every adult who'll be on the deed, including a spouse, for the first-time and MCC programs.
2. Take a HUD-certified homebuyer education course. TDHCA, TSAHC, Houston, Dallas, San Antonio, Austin and Fort Worth all require one, and city programs often require an 8-hour class from a specific provider list. Take the one your city requires so it counts for both. A HUD-approved housing counselor (opens in a new tab) can also help you compare options free or at low cost.
3. Talk to two approved lenders. Use TDHCA's participating lender list (opens in a new tab) and TSAHC's lender search. Ask each for a Loan Estimate with no DPA and with the DPA, so you can see the rate cost.
4. Ask about the MCC. If you're a first-time buyer, ask whether the TDHCA (20%) or TSAHC (15%) MCC fits. TSAHC's guidelines show a $2,700 first-year credit on a $240,000 loan at 7.50%. The credit can't exceed your federal tax bill, but unused credit carries forward 3 years, and it's claimed on IRS Form 8396 (opens in a new tab).
5. Apply for city help through the same lender. Dallas and Fort Worth require the lender to submit for you, and Dallas requires a signed contract first.
6. Lock and close. TDHCA requires you to move in within 60 days of closing. Keep your homebuyer education certificate and the DPA note; you'll need them if you refinance.

For example, a family of two in Harris County earning $95,000 and buying a $300,000 home with an FHA loan fits under My First Texas Home's $104,000 income limit and $566,354 price cap, and under Home Sweet Texas's $156,000 limit. Specifically, TDHCA's 5% repayable option would give them $14,475 at 7.000%. With TSAHC's 2% grant, they'd get $5,790 at 7.625% and never repay it after six months. With no DPA, they'd have a 6.500% TDHCA rate and need about $10,500 for the 3.5% down payment plus closing costs. If the family can cover the down payment, the no-DPA rate plus a TDHCA MCC is often the cheapest route over 5 years. Houston's city HAP would have been the best first route if it were open, but it isn't.

What Happens If Funds Run Out or You're Denied

2 statewide agencies mean you have a backup if one says no. If TDHCA's DPA is unavailable, ask a lender about TSAHC, and the reverse. If a city program is closed, as Houston's is, the state programs still work inside city limits.

If you're denied:

• For income, check whether you used the right limit. My Choice Texas Home counts only borrowers, while My First Texas Home counts a non-purchasing spouse too. A targeted census tract also raises the limit.
• For credit, a score under 620 rules out TDHCA and TSAHC DPA, but TDHCA's stand-alone MCC has no minimum score for the certificate. A HUD-approved counselor can build a credit plan.
• For price, TDHCA's My Choice Texas Home and TSAHC's non-bond DPA without an MCC have no purchase price limit.
• For city programs, ask how to get on the waiting list. Houston says applicants may reapply once funding is replenished and will be handled first come, first served.

If buying has to wait, our rental assistance programs guide covers help with rent while you save, and our home repair grants guide covers help after you buy. Moving out of state? See our California and Florida guides. Our how to apply for grants as an individual guide explains how to spot real help from fake offers. Grantsights' free eligibility checker points you to official programs for rent, utilities and other needs; it doesn't give out grants or apply for you.

FAQ: Texas First-Time Home Buyer Programs

Does Texas give first-time home buyers a grant?

Sometimes. TSAHC's grant option is free after six months, and some local HFC gifts are free; TDHCA's help is a 0% loan.

How much down payment assistance can I get in Texas?

2% to 5% of the loan from the state, and up to $50,000 to $60,000 from Dallas DHAP.

What are the income limits for TDHCA's My First Texas Home?

$101,500 for 1 or 2 people and $116,725 for 3 or more in most counties, effective July 13, 2026; higher in big metros.

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

620 for TDHCA and for TSAHC government loans; 640 for TSAHC conventional loans.

Do I have to be a first-time buyer?

No for My Choice Texas Home and TSAHC's non-bond DPA; yes for My First Texas Home and the MCC.

Is the Houston Homebuyer Assistance Program open?

No. Houston says program funds are exhausted and it isn't accepting new applications.

What is the recapture tax on a Texas MCC or bond loan?

A federal tax that can apply if you sell within 9 years, capped at 50% of your gain.

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Sources

1. TDHCA: My First Texas Home Program Matrix (opens in a new tab), published November 2, 2026
2. TDHCA: My Choice Texas Home Program Matrix (opens in a new tab), published November 2, 2026
3. TDHCA: TX Combo DPA with MCC Program Matrix (opens in a new tab), published November 2, 2026
4. TDHCA: Stand-alone MCC Program Matrix (opens in a new tab), published November 2, 2026
5. TDHCA: Rate Notice (opens in a new tab), rates effective November 3, 2026
6. TDHCA: Income and Purchase Price Limits (opens in a new tab), effective July 13, 2026
7. TDHCA: Homebuyer Programs (opens in a new tab) and Texas Mortgage Credit Certificate (opens in a new tab), checked November 3, 2026
8. TDHCA: Additional Grant Down Payment Assistance (HFC gift funds) (opens in a new tab), checked November 3, 2026
9. TDHCA: Participating Lenders (opens in a new tab)
10. TSAHC: Guidelines for Down Payment Assistance and Mortgage Credit Certificates (opens in a new tab), revised September 9, 2026
11. TSAHC: Home Buyer Program Interest Rates (opens in a new tab), rates effective November 2, 2026
12. TSAHC: County Income Limits tool (opens in a new tab), read November 3, 2026
13. TSAHC: Combined Income and Purchase Price Limits PDF (opens in a new tab), labeled effective for locks on and after May 28, 2025
14. TSAHC: Homes for Texas Heroes (opens in a new tab) and Home Sweet Texas (opens in a new tab), checked November 3, 2026
15. City of Houston: Homebuyer Assistance Program (opens in a new tab), checked November 3, 2026
16. City of Houston: HAP Guidelines Version 8.0 (opens in a new tab), approved June 23, 2026
17. City of Dallas: Dallas Homebuyer Assistance Program (opens in a new tab), checked November 3, 2026
18. BCL of Texas: Dallas Homebuyer Assistance Program (opens in a new tab), income limits effective June 1, 2026
19. BCL of Texas: DHAP Program Manual 2025-2026 (opens in a new tab), revised May 1, 2026
20. City of San Antonio: Homeownership Incentive Programs (HIP) (opens in a new tab), checked November 3, 2026
21. City of Austin: Homebuyer Resources (opens in a new tab), checked November 3, 2026
22. City of Fort Worth: Homebuyer Assistance Program (opens in a new tab), income table updated October 2026
23. HUD: FHA Loans (opens in a new tab)
24. HUD: Find a Housing Counselor (opens in a new tab)
25. IRS: About Form 8396, Mortgage Interest Credit (opens in a new tab)
26. IRS: About Form 8828, Recapture of Federal Mortgage Subsidy (opens in a new tab)
27. FTC: ReportFraud.ftc.gov (opens in a new tab)