For many prospective homebuyers in Texas, saving a down payment is the biggest hurdle to buying a first home. To help more Texans own their own home, a range of Texas down payment assistance programs exist. These programs can help you save thousands or tens of thousands on buying your first home.
To help you find the right program for you, we’ve compiled a comprehensive inventory of all the down payment assistance (DPA) programs accessible to homebuyers in Texas. Before you dive in, let’s take a quick look at what DPA is, how you can qualify, and how to apply.
Down payment assistance defined
You’re probably wondering why anyone would want to help you buy a house with free or low-cost money. Well, it’s in the interest of states, cities, and lenders to help you afford a home. This helps them meet their goals of making homeownership more equitable and assisting more people to build up generational wealth.
Most DPA programs you’ll encounter in Texas take the form of forgivable loans and liens. Grants also exist, like the City of Abilene First Time Buyer Program. But, generally speaking, when you apply for DPA in Texas you’ll be applying for a forgivable loan or lien.
What exactly is a forgivable loan or lien? This is financial assistance that you won’t have to repay as long as you meet a set of basic forgiveness requirements. Once you meet these requirements the loan or lien is lifted and you do not have to repay the assistance you received.
The most common requirement is that you must live in your new home for a number of years — most often between three and ten years — without selling, refinancing, or renting it out. You also have to consistently make your mortgage payments on time.
How to qualify
Qualifying for DPA is as simple as meeting the relevant eligibility requirements for a particular program. You’ll find that each DPA program has its own set of rules. Generally, each program will require that you have a minimum credit score and that your household income isn’t above a certain level.
These are the most common requirements for DPA programs in Texas.
- Income: Equal to or less than 80% of the median income in your area. Note that some programs allow for higher incomes.
- Credit score: On average, yours will need to be lower than 620 or 640. Note that some programs allow for lower credit scores.
How to apply
Most people submit their DPA application at the same time they apply for a mortgage. To apply for a particular DPA program, you need to apply through a lender that is approved by the program.
In nearly all cases, assistance has to be used for your down payment, but in some cases, assistance can also be used to pay your closing costs.
Whichever program you end up using, be sure to follow the requirements and only use the funds to pay for costs approved by the program. Also, pay close attention to the forgiveness period and follow the rules so you don’t have to pay the loan or lien back.
If you need help finding a trusted lender who works with your assistance program, a specialist like Stairs Financial may be able to help you.
Now, let’s take a look at the wide variety of programs you can apply for in Texas.
National DPA programs you can access in Texas
These national programs are available across the country, including Texas.
NHF Down Payment Assistance Program
Forgivable. The forgiveness timeframe is determined at the time of closing.
- Forgivable loan / Up to 5% down payment, no fixed maximum
- More info: NHF Down Payment Assistance Program
Statewide DPA programs in Texas
These DPA programs are available wherever you live in Texas.
Veterans Housing Assistance Program
A special mortgage loan program for veterans and active duty service members. Structure is flexible, offering repayment timelines between 15 and 30 years. Interest rate is generally lower than the market rate.
- Discounted mortgage loan / Up to $726,200 mortgage loan
- More info**: Veterans Housing Assistance Program**
TDHCA My First Texas Home Down Payment Assistance Lien
A flexible program for first-time home buyers. Lien is either a three-year forgivable lien or a 30-year deferred repayment lien, determined based on your needs.
- Forgivable loan / Up to 5% down payment, no fixed maximum
- More info: My First Texas Home Forgivable Down Payment Assistance Lien
TDHCA My Choice Texas Home Down Payment Assistance Lien
A forgivable or deferred repayment second lien for first-time homebuyers. Forgivable liens are eligible for forgiveness after three years and deferred repayment liens are eligible after thirty years.
- Forgivable loan / Up to 5% down payment, no fixed maximum
- More info**: My Choice Texas Home Down Payment Assistance Lien**
TSAHC Home Sweet Texas HFA Loan
A forgivable loan available everywhere in Texas. Can be fully forgiven after three years so long as you don’t sell or refinance in that period.
- Forgivable loan / Up to 5% down payment, no fixed maximum
- More info**: Home Sweet Texas HFA Loan**
TSAHC Homes for Texas Heroes HFA Loan
Available to teachers, emergency medical professionals, police, veterans, and active duty service members. Eligible for forgiveness after three years.
- Forgivable loan / Up to 5% down payment, no fixed maximum
- More info**: Homes for Texas Heroes HFA Loan**
Local DPA Down payment assistance in Texas
These DPA programs are only available for specific cities, counties, or regions in Texas.
San Antonio Housing Assistance Program
A forgivable loan of up to $30,000 for first-time homebuyers buying within city limits. Assistance timeline is between five and ten years, depending on your loan amount.
- Forgivable loan / $30,000 maximum
- More info**: San Antonio Housing Assistance Program**
San Antonio Homeownership Incentive Program: HIP 80
A forgivable loan for homebuyers in San Antonio with a household income less than or equal to 80% of the median income in your area.
- Forgivable loan / $30,000 maximum
- More info**: San Antonio Homeownership Incentive Program**
San Antonio Homeownership Incentive Program: HIP 120
Similar to the HIP 80 program above, but with a higher income limit (120% of the area median income) and a lower loan maximum. After ten years, seventy-five percent of the amount is forgivable.
- Forgivable loan / $15,000 maximum
- More info**: San Antonio Homeownership Incentive Program**
SETH 5 Star Texas Advantage Forgivable Lien
Eligible for forgiveness after three years. Available in most parts of Texas, with the exception of El Paso, McKinney, Grand Prairie, and Travis County.
- Forgivable loan / Up to 5% down payment, no fixed maximum
- More info**: 5 Star Texas Advantage Forgivable Lien**
City of Abilene First Time Buyer Program
A grant for those buying a first home inside the Abilene city limits.
- Grant / $5,000 maximum
- More info**: City of Abilene First Time Buyer Program**
The City of Ft. Worth Homebuyer Assistance Program
A forgivable loan with a five or ten-year forgiveness timeframe, depending on the loan amount.
- Deferred forgivable loan / $20,000 maximum
- More info**: City of Ft. Worth Homebuyer Assistance Program**
Houston Homebuyer Assistance Program
A forgivable loan for homebuyers purchasing within Houston city limits. A forgiveness timeframe of five years.
- Forgivable loan / $30,000 maximum
- More info**: Houston Homebuyer Assistance Program**
City of Irving Down Payment Assistance Program
A large down payment assistance loan for first-time homebuyers. Only available in Irving. The forgiveness period is determined by the loan amount. Larger loans have longer forgiveness periods.
- Deferred forgivable loan / $50,000 maximum
- More info**: City of Irving Down Payment Assistance Program**
City of McKinney Down Payment and Closing Cost Assistance
A forgivable loan that can be used to pay closing costs or make a larger down payment. Forgiveness timeframe is five years.
- Forgivable loan / $10,000
- More info**: City of McKinney Down Payment and Closing Cost Assistance Program**
City of Arlington Homebuyer Assistance Program
A forgivable loan available to first-time home buyers. Only available in Arlington. Forgiveness occurs at five or ten-year mark, depending on terms set at closing.
- Forgivable loan / $20,000 maximum
- More info**: City of Arlington Homebuyers Assistance Program**
Austin’s Down Payment Assistance Program
A forgivable loan for first-time homebuyers purchasing buying within Austin. Offers a maximum payout of up to $40,000. A longer forgiveness timeline is required to recieve the full amount.
- Forgivable loan / $40,000 maximum
- More info**: Austin’s Down Payment Assistance Program**
Dallas Homebuyer Assistance Program
Up to $60,000 in down payment assistance to homebuyers living in Dallas. Useful for those on higher incomes who are long-term Dallas residents and buyers who work in healthcare, education, or emergency services.
- Deferred forgivable loan / $60,000 maximum
- More info**: Dallas Homebuyer Assistance Program**
City of Frisco Targeted Down Payment Assistance Program
A forgivable loan for homebuyers who have worked for at least six months for the City of Frisco or the Frisco Independent School District. Forgiveness occurs after five years.
- Forgivable loan / $10,000
- More info**: City of Frisco Targeted Down Payment Assistance Program**
City of Waco Homebuyer Down Payment Assistance Program
A low-cost loan for first-time homebuyers that live in Waco. Intended to pay down payment and closing costs. To be repaid over the life of your mortgage loan.
- Loan / $25,000 maximum
- More info**: City of Waco Homebuyer Down Payment Assistance Program**
City of Odessa Homebuyer Assistance Program
A forgivable loan with a higher maximum for those buying a newly constructed home. You can also receive up to $4,000 to pay closing costs.
- Forgivable loan / Maximum: $24,000 for new construction or $10,000 for existing homes
- More info**: City of Odessa Homebuyer Assistance Program**
The City of Plano’s First Time Homebuyers Program
A forgivable loan with a higher assistance amount available to lower-income buyers. Forgiveness timeline takes place between five and fifteen years, depending on loan amount.
- Forgivable loan / $10,000 to $60,000, based on income
- More info**: City of Plano’s First Time Homebuyers Program**
Author
Mike Romano is a mortgage industry veteran with over 20 years of experience. His expertise spans mortgage technology, credit risk, and loan origination, and he has spoken at many mortgage and fintech conferences. Mike is a licensed mortgage broker.
If you have any questions and want to learn more about the down payment assistance programs you may be eligible for in Houston, reach out to Jennifer Yoingco, REALTOR® and her team, The Houston Suburb Group, so you can get ready to EXPERIENCE LIVING IN HOUSTON, TEXAS!
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