Texas First-Time Homebuyer Programs 2026 - TDHCA, TSAHC, Down Payment Assistance, and Income Limits

In Texas, a first-time homebuyer program is not just for someone who has never owned a home. Most programs follow the federal definition: you are usually treated as a first-time buyer if you have not owned and occupied a primary residence during the last 3 years. That means many renters who owned long ago can still qualify.

Texas programs usually help in three ways. First, they can lower upfront cash by providing down payment assistance, often called DPA. Second, they can pair that assistance with a 30-year fixed mortgage priced through a state or nonprofit housing program. Third, they can add a mortgage credit certificate, or MCC, which can reduce your federal tax bill and sometimes help qualifying income. The core promise is simple: if you qualify, you may be able to reduce or nearly eliminate the cash you need for the down payment from your own savings.

These programs do not work like a direct grant application to the state. In practice, you apply through an approved lender, and the lender reserves the program layer inside your mortgage file. That is why the right first step is not sending paperwork to Austin. It is comparing lenders who actually know how to structure TDHCA or TSAHC files correctly.

Texas first-time buyers usually start with two statewide issuers. The first is the Texas Department of Housing and Community Affairs, or TDHCA. Its homebuyer site is tdhca.state.tx.us, and its current buyer portal lives at welcomehome.tdhca.texas.gov. TDHCA runs My First Texas Home, My Choice Texas Home, the Texas Mortgage Credit Certificate Program, and a statewide homebuyer education pathway. TDHCA is the more traditional state-housing-agency option, and its income and purchase-price rules are tied closely to county and metropolitan-area median-income tables.

The second is Texas State Affordable Housing Corporation, or TSAHC. Its public site is tsahc.org. TSAHC is a statewide nonprofit created by the Texas Legislature, and its main buyer programs are Home Sweet Texas and Homes for Texas Heroes, plus a statewide MCC option. The practical difference is that TSAHC often feels more occupation-forward. Heroes is built around teachers, first responders, corrections staff, veterans, and certain nursing or allied-health faculty, while Home Sweet Texas is the broader statewide path for buyers who are income-eligible but not in a qualifying hero category.

The most important operational point is the same for both: you do not apply directly to TDHCA or TSAHC as a retail borrower. You work through participating lenders who reserve the program for you, price the first mortgage, and assemble the file for state or nonprofit approval.

My First Texas Home is TDHCA's flagship first-time-buyer path. It pairs a 30-year fixed-rate mortgage with down payment assistance and is designed for buyers who meet the first-time-buyer rule or a targeted-area or veteran exception. The assistance is commonly structured as 2% to 5% of the loan amount through a 0% interest deferred second lien. There is no monthly payment on that second lien, but it becomes due when you sell, refinance, or pay off the first mortgage.

The first mortgage can be paired with FHA, VA, USDA, and certain conventional HFA structures, which makes the program flexible for different credit and down-payment profiles. Credit planning usually starts at 620, and TDHCA requires an approved homebuyer education certificate before closing. Current county limits are far more useful than old statewide rules of thumb. For example, TDHCA's limits effective May 27, 2025 show Harris County at $101,100 for 1-2 people and $116,265 for 3 or more, while Dallas-area limits rise to $117,300 and $134,895. In the same 2025 table, the non-targeted one-unit purchase-price cap is $544,232 in the Houston-area HMFA and $585,006 in Dallas-area counties.

The biggest practical appeal of My First Texas Home is that it can get you through the cash barrier without pretending cash no longer matters. You still need a sustainable monthly payment, but the program can move a buyer from "I qualify on income but do not have enough cash" to "I can actually close."

A mortgage credit certificate is one of the most overlooked Texas buyer tools because it does not look like down payment help at first glance. An MCC gives you a federal tax credit tied to a percentage of the mortgage interest you pay each year. It is a credit, not a deduction, which matters because credits reduce tax owed dollar for dollar. In Texas programs, the exact certificate percentage can vary by issuer and current program rules, so buyers should confirm the live rate before relying on a specific annual number.

The easiest way to understand the value is with a concrete example. Suppose your first-year mortgage interest is about $17,500 on a $250,000 loan at 7%. At a 20% certificate rate, the raw credit would be about $3,500, but federal rules cap the annual claim at $2,000 once the certificate percentage is above 20%. That still means the credit can materially reduce your tax bill, and some lenders may count part of the expected benefit as qualifying income under their guidelines. That can improve buying power even if the tax credit itself does not hand you cash at closing.

TDHCA offers MCC access alongside its homebuyer programs and, in some cases, as a stand-alone option. TSAHC also publishes MCC guidance for participating lenders. One caution matters: there can be federal recapture tax risk if you sell the home within 9 years at a profit and meet certain income and gain tests. It does not hit every borrower, but it is real enough that you should read the recapture explanation before you decide the MCC is free upside with no strings.

TSAHC runs two buyer-facing statewide assistance tracks. Home Sweet Texas is the broad low-to-moderate income path. Homes for Texas Heroes is the occupation-based path for full-time professional educators in public districts, certain first responders, corrections staff, veterans or active military, and certain nursing or allied-health faculty roles. Both programs are built around fixed-rate first mortgages plus down payment assistance that buyers typically take as either a true grant with no repayment or a 3-year deferred forgivable second lien that is repaid only if you sell or refinance inside that window.

In practical planning, many buyers see assistance options around 3%, 4%, or 5% of the loan amount depending on the current TSAHC rate sheet and lender setup. Credit planning starts at 620. Home Sweet Texas is the broader path if you are not in a qualifying hero profession. Heroes is often the better first stop if you are, because it can carry slightly better pricing on some loan types and can waive certain MCC fees when paired correctly. The current public buyer pages do not ask you to self-underwrite the full matrix, which is why the participating lender matters so much.

If you want rough planning examples, recent Austin-area Hero income examples have landed around $103,800 for smaller households, while San Antonio-area examples have landed around $91,800. Treat those as orientation numbers, not final approval figures. TSAHC maintains current lender resources, combined income tables, and program FAQs, and those live documents should control before you rely on any older city-by-city blog post.

Texas down payment assistance does not replace the underlying loan program. It sits on top of it. In most cases, you still close with FHA, VA, USDA, or a conventional HFA mortgage. That first-mortgage choice drives the interest rate, mortgage-insurance structure, appraisal rules, and long-run payment behavior. State assistance helps you get in, but the first mortgage determines a large share of what ownership feels like after closing.

FHA is still the most common Texas DPA pairing because it allows 3.5% down and can work from 580 in many standard cases, though state-assistance overlays often start higher. VA loans are powerful for eligible veterans and active-duty borrowers because the first mortgage can be 0% down, letting DPA focus more on closing costs and reserves. USDA works well in eligible rural areas and suburban fringes that many buyers do not realize still qualify. Check the live map at eligibility.sc.egov.usda.gov before assuming a town is too built-out. Conventional HFA Preferred or HFA Advantage structures are often the best fit when credit is stronger and you want a 3% down conventional path instead of FHA insurance.

Statewide programs are only part of the Texas assistance map. Several cities and local housing departments also run their own down payment assistance layers, and in some cases they can be combined with TDHCA or TSAHC. This is where buyers can find the biggest cash-to-close swing, but it is also where funding changes most often.

Houston is the clearest reminder that buyers should check the live city page instead of relying on old summaries. As of the City of Houston page I verified in June 2026, the Homebuyer Assistance Program offers up to $50,000 to income-qualified buyers at or below 80% AMI, structured as a no-interest forgivable loan that is fully satisfied after 5 years of owner occupancy. San Antonio's Homeownership Incentive Program, or HIP, has recently offered up to $30,000 through a 0% deferred second for lower-income buyers, with a separate higher-income track carrying different caps and forgiveness rules. Dallas has run assistance up to about $60,000 for lower-income buyers through its homebuyer assistance framework, while Austin-area assistance through Austin Housing Finance Corporation has commonly reached up to about $40,000.

The reason buyers should stay flexible here is that city programs can pause, reopen, or change amounts much faster than state agency pages. Layering city and state assistance is sometimes possible, but you still have to respect the first-mortgage program's combined-assistance cap, property requirements, and underwriting timeline. Always confirm the current city amount, forgiveness period, and lender compatibility before you structure an offer around stacked assistance.

Older Texas buyer articles often quote one statewide number for income limits and another for purchase price. That is no longer a reliable way to plan. TDHCA's official table effective May 27, 2025 is county- and metro-specific, and the correct number depends on both location and household size. Use the tables below as quick orientation, then confirm the live PDF with your lender before pre-approval or contract.

Targeted census tracts are areas of severe economic distress that can carry higher limits or relaxed first-time-buyer rules. TDHCA publishes targeted-area resources and map tools for lenders and buyers, and you should verify the property address there instead of guessing from neighborhood reputation alone.

Credit score is one of the fastest ways to move from "maybe" to "yes" in a Texas assistance file. Plan around 620 for most TDHCA and TSAHC programs, 640 for some conventional HFA structures, and 580 for standalone FHA in many standard cases. The state-program overlay is why you should not assume a generic FHA minimum is the only number that matters. The underlying loan and the assistance layer both influence the final threshold.

If you need to improve quickly, focus on the three levers that move scores fastest. First, pay revolving balances down below 30% utilization, because that alone can lift some borrowers 20 to 40 points within 30 to 60 days. Second, review all three reports at AnnualCreditReport.com and dispute genuine errors early. Third, if a trusted family member has an older low-utilization account, becoming an authorized user can help some borrowers faster than opening new credit. What you should not do is open fresh credit lines inside 90 days of application unless your lender specifically recommends it.

Some participating lenders also pair program borrowers with credit counseling or homebuyer-education support before closing. That can be useful if your score is close but not quite there. The main idea is to improve score before the file is priced, not after you are already rushing through contract deadlines.

Both TDHCA and TSAHC require an approved homebuyer education course before closing, and this is more than administrative busywork. The course is where many buyers finally see the full connection between credit, escrow, taxes, insurance, and cash to close. Most online versions take around 6 to 8 hours, commonly cost about $75 to $125, and produce a certificate that many lenders treat as valid for 1 year from completion.

TDHCA currently points buyers to Finally Home as its preferred course and also accepts other HUD-certified options such as Freddie Mac CreditSmart Homebuyer U and Fannie Mae HomeView. TSAHC maintains its own list of approved providers and lender resources. Some lenders also accept Framework or eHome America when the course is on the current approved list, but the safest approach is to confirm acceptance before you pay. Do not assume any general homebuyer class will work just because it is online.

Timing matters. You do not need to finish the course before your first phone call with a lender, but you do need the certificate in the file before the loan closes. A smart workflow is to start pre-qualification and education at roughly the same time, then keep the certificate PDF saved in multiple places so you can upload it quickly when underwriting asks for it. Some borrowers are also required to complete one-on-one counseling in addition to the online class, especially in city-assistance layers.

Buyers move faster when they follow the sequence in the right order. The key is to solve eligibility and payment early, then let the lender reserve the assistance layer before contract timing gets tight.

1. 1. Check eligibility: income, purchase price, first-time-buyer status, and approximate credit score.
2. 2. Decide whether TDHCA or TSAHC is the better first stop based on income, occupation, and assistance structure.
3. 3. Choose an approved participating lender from the official lender list.
4. 4. Get pre-qualified or pre-approved so the lender can pull credit, calculate DTI, and size the maximum loan.
5. 5. Complete the required homebuyer education course and save the certificate.
6. 6. Make an offer on a home that fits the live income and purchase-price limits.
7. 7. Have the lender submit the file for TDHCA or TSAHC program approval, which often adds about 3 to 5 business days.
8. 8. Close: assistance funds are wired to title, and you sign the first mortgage plus any second-lien DPA documents.

Steps 4 and 5 can happen at the same time, and they usually should. Waiting too long on education is one of the easiest ways to create an avoidable closing delay.

The real value of assistance only shows up when you run a full payment, not when you stop at the grant amount. Here is a simple planning example using a $285,000 home. Suppose you receive a 5% TSAHC grant equal to $14,250. Your modeled first-mortgage balance in this simplified example is $270,750 on a 30-year fixed loan at 7.25%. Principal and interest land around $1,847 per month. Add approximate FHA mortgage insurance of $124 per month, Texas property tax at roughly 1.8% or about $428 per month, and homeowners insurance at about $175 per month.

That produces an estimated all-in payment around $2,574 per month. The lesson is not that every $285,000 Texas home will cost exactly that amount. The lesson is that assistance may solve the cash-to-close problem while taxes and insurance still determine whether the monthly payment is comfortable. Also remember that DPA can cover the minimum required down payment in some structures while leaving closing costs, reserves, or first-year escrow as the remaining cash hurdle.

Treat the numbers above as illustrative only. Loan type, county tax rate, insurance quote, and exact DPA structure will change the final result. The strongest comparison is to run your likely home price through the calculator with your target county and your expected program path, then compare that result to your recommended affordability range instead of your stretch number.

Texas has no state income tax, which helps take-home pay, but the tradeoff is that many counties and school districts rely heavily on property taxes. In practical buying terms, Texas taxes often run around 1.6% to 2.2% depending on county, school district, and special district overlays. That range is large enough to change affordability more than many buyers expect.

Suppose you can comfortably support about $2,500 per month in total housing cost. In a lower-tax scenario near 1.2%, that budget might support something closer to a $290,000 purchase. In a higher-tax scenario near 2.1%, the same buyer may need to stay closer to $235,000 to keep the payment stable. That is why Texas buyers should never shop by principal and interest alone. County and district tax assumptions belong in the first draft of the budget, not the last.

Texas also offers a meaningful school-district homestead exemption for owner-occupants. The statewide school tax homestead exemption increased to $100,000 under 2023 law, which can save many homeowners around $1,000 to $1,500 per year depending on the local rate. But buyers should still model pre-exemption taxes first, because you do not want a purchase to work only after a future exemption, protest, or appraisal appeal goes perfectly. For a county-by-county planning view, read the Texas Property Tax by County guide.

Texas closing costs usually land around 2% to 5% of the loan amount, but the final number depends on your lender fees, title charges, prepaids, and how much escrow needs to be funded. Common line items include an origination fee around 0.5% to 1%, title insurance using Texas promulgated rate schedules, appraisal fees that often run about $500 to $800, survey costs that commonly land around $400 to $600 when required, plus prepaid interest and initial escrow deposits for taxes and insurance.

Texas buyers using state assistance should ask one very practical question: if the grant or DPA amount is larger than the minimum down-payment requirement, can the extra be applied to closing costs? In many cases, yes. That is one reason a buyer can arrive at a near-zero-cash close even without a large personal savings balance. Seller concessions matter too. Depending on loan type and down-payment percentage, sellers may be able to contribute roughly 3% to 6% of the purchase price toward allowable closing costs.

The smart move is to model down payment and closing costs separately. Assistance that solves one does not always solve the other in full. Run the numbers in the closing cost calculator before you assume a grant automatically means no cash due at closing.

Applying directly to the agency instead of an approved lender. TDHCA and TSAHC are program issuers, not the retail loan desk. Start with an approved lender who already knows how to reserve and close these files.

Making a large undocumented deposit before closing. Underwriters want a clear paper trail for funds used to close. A surprise deposit with no documentation can slow or derail a file that was otherwise clean.

Changing jobs or switching to self-employment after pre-approval. Program loans still sit on top of ordinary mortgage underwriting. A major employment change in the middle of the file can reset the lender's confidence quickly.

Shopping above the live purchase-price cap. This usually shows up late, after a buyer falls in love with a house and only then discovers the program limit was lower than expected for that county or tract type.

Failing to compare multiple participating lenders. Even inside the same program family, rates, overlays, communication quality, and processing speed can vary enough to change both payment and closing risk.

Ignoring Texas property taxes in the long-run budget. Buyers sometimes solve the down payment problem and then get payment shock later because school district, city, or MUD taxes were under-modeled from the start.