First-Time Homebuyer Programs in Texas

If you are buying your first Texas home within the next year, almost all of the down payment help available to you comes from three places: two state housing agencies, which each offer up to 5% of your loan amount, and, in Austin and Dallas, the city, which can add tens of thousands more. You do not apply to any of them directly. You reach every one through a participating lender, so the first real step is a pre-approval that names the program you will use.

This page explains how the programs are built and who each one is wrong for. It ends at that pre-approval.

Every major Texas program attaches its help to a 30-year fixed-rate first mortgage that a participating lender makes. The help comes in one of three forms, and the form matters more than the headline percentage.

• A grant is money you never repay.
• A second lien is a second, smaller loan recorded against the house behind your main mortgage. A deferred second lien charges no monthly payment and is repaid later, usually when you sell, refinance or pay off the first mortgage.
• A forgivable second lien is erased after you have lived in the home for a set number of years. Move or refinance before then and you may owe it.

Here is the arithmetic in its simplest form. Say your first mortgage is $300,000. A program offering 5% of the loan amount gives you $15,000 toward your down payment and closing costs. Whether that $15,000 is free money, money you repay when you sell, or money that disappears after three years depends on which program and which option you pick.

The second term you will see everywhere is AMFI (area median family income), sometimes written AMI. Income limits are set as a percentage of it, so the same salary can qualify in Austin and fail in a smaller county.

The requirements overlap across programs. The checklist covers the state programs; the two city programs add a few conditions, noted where they apply.

On time: lenders cited in TDHCA's program materials put a typical My First Texas Home closing at 30 to 45 days from application, including 7 to 10 business days for TDHCA's compliance review. Allow for the education course before that clock starts.

The answer for most readers: if you are using an FHA, VA or USDA loan and have not owned a home in three years, start with TDHCA's My First Texas Home. If you are a teacher, firefighter, EMS worker, police or corrections officer, or veteran, look first at TSAHC's Homes for Texas Heroes, which has the highest income limits. If you want money you never have to repay, TSAHC's grant option is the only state choice that offers it. Then check whether your city adds more on top.

Who each is wrong for:

• My First Texas Home is wrong for you if you want a conventional loan, or if you expect to refinance soon, because the 5% is repaid when you refinance or sell. TDHCA's program page lists the companion My Choice Texas Home for buyers who are not first-timers.
• TSAHC's grant option is wrong for you if the lowest possible monthly payment matters most, because TSAHC says choosing the grant brings a slightly higher first-mortgage rate.
• The Austin and Dallas city programs are wrong for you if you earn above 80% of area median income or might move within the forgiveness period, which runs 5 or 10 years in Austin and up to 15 years in Dallas.

Every program on this page runs through a lender, so a pre-approval is the point where all of this becomes a real number. Ask more than one lender whether they participate, since rates and fees differ even inside the same program.

The city programs pay far more than 5% at most price points, and both can be combined with a state program on the same purchase.

Austin. The City of Austin Down Payment Assistance program offers a 0% interest, deferred-forgivable loan in two tiers. Option I runs $1,000 to $14,999, with a minimum 5-year affordability period. Option II runs $15,000 to $40,000, with a 10-year period. Household income cannot exceed 80% of Austin's median family income, adjusted for household size. Third-party guides give different purchase price caps for this program ($579,025 in Bankrate's guide, $614,054.70 in The Mortgage Reports), so confirm the current figure with the city.

Dallas. The Dallas Homebuyer Assistance Program (DHAP), administered by Business & Community Lenders of Texas for the city, offers a 0% forgivable second lien of up to $50,000 within city limits and up to $60,000 in designated High Opportunity Areas. Income limits effective June 1, 2026 are published in tiers at 50%, 80% and 120% of AMI; for a four-person household those are $60,550, $96,900 and $145,320. Bankrate reports a $342,000 home price limit. The sources do not explain how the tiers change the amount you receive, so ask BCL of Texas which tier applies to you.

Treating a deferred loan as free money. My First Texas Home's 5% has no interest and no payment, but it is repaid when you sell, refinance or pay off the mortgage. You can tell this has happened if you planned to refinance when rates fall and did not budget to repay the second lien. Before you sign, ask the lender to show you the payoff amount and when it is triggered. If you expect to refinance within a few years, compare TSAHC's grant or 3-year forgivable option instead.

Moving before the forgiveness period ends. TSAHC's forgivable lien needs 3 years in the home. Austin needs 5 or 10 years, depending on the tier. Dallas ties forgiveness to occupancy of up to 15 years. The sign is a job offer in another city two years in. Pick the tier and program against how long you realistically expect to stay, not against the largest number.

Missing the limit because of who counts as household. TDHCA counts everyone who will live in the home and be on the mortgage. A partner's income added late can push you over the county limit. Run the household total before step 2, not after you find a house. Also watch the price cap: a house over your county's maximum disqualifies you from the program no matter what you earn.

Applying in the wrong order for Dallas. DHAP will not take your application until you have a pre-approval from a DHAP-approved lender and an executed purchase contract, and it then runs a Readiness Check, Intake Application, Eligibility Determination Session and a Home Review (inspection and environmental) before closing. BCL of Texas states that "submitting an intake information does not guarantee funding." Build that review into your contract timeline.

One thing that should not drive your timing: TSAHC says its down payment assistance funding is not capped, so you do not need to rush a purchase to beat a funding cutoff on its programs. City programs make no such statement.

With a program-specific pre-approval in hand, two things are worth doing before you tour homes.

First, if your lender has put you on an FHA loan, check the full underwriting bar it has to clear, since the program's 620 floor sits on top of the loan's own rules. This blog covers what FHA qualification takes in 2026.

Second, if you are outside Austin and Dallas, look at your own city. Bankrate's survey lists Fort Worth (up to $25,000, 10-year occupancy for full forgiveness, $1,000 minimum cash reserves), Houston (up to $50,000, forgivable after 5 years, no minimum credit score or price cap) and San Antonio (HIP 80 at $1,000 to $30,000, and HIP 120 at $1,000 to $15,000, of which 25% stays a loan). For how Texas fits against federal options, see the national programs breakdown.