How Does TSAHC Down Payment Assistance Work?

What Is TSAHC?

The Texas State Affordable Housing Corporation (TSAHC) is a nonprofit organization created by the Texas legislature to serve the housing needs of low-income and moderate-income Texans. While it operates independently from the state government, it is one of the two primary agencies that administer down payment assistance programs in Texas.

What sets TSAHC apart from other DPA providers is its grant option. Unlike programs that provide assistance as a loan that must eventually be repaid, TSAHC offers a true grant that never needs to be paid back. This makes TSAHC programs some of the most attractive DPA options available to Texas home buyers in 2026.

TSAHC operates two primary programs: Homes for Texas Heroes and Home Sweet Texas. Both provide down payment and closing cost assistance, but they serve different audiences and have slightly different structures. In this guide, we will break down everything you need to know about both programs so you can determine which one is right for you.

The Two TSAHC Programs

TSAHC administers its DPA through two distinct programs, each designed to serve a specific group of Texas home buyers.

Homes for Texas Heroes

The Homes for Texas Heroes program was created to honor Texans who serve their communities through public service careers. It provides down payment and closing cost assistance to eligible professionals including:

• Teachers and educators (including full-time classroom teachers, teacher aides, school librarians, and school counselors employed by a public or private school district)
• Law enforcement officers (including police officers, sheriffs, deputies, and constables)
• Firefighters and emergency medical technicians (including paid and volunteer firefighters and licensed EMTs and paramedics)
• Corrections officers (including state and county corrections employees)
• Veterans (including those currently serving in the military)
• Public security officers (including 911 dispatchers and juvenile corrections officers)
• County jailers and other eligible public servants

If you are employed in one of these professions, the Heroes program may offer you slightly more favorable terms compared to the general Home Sweet Texas program. Both programs offer grant and second lien options, but the Heroes program is specifically branded and marketed as a thank-you to those who serve their communities.

Home Sweet Texas

The Home Sweet Texas program is available to all eligible Texas home buyers regardless of their profession. If you do not qualify for the Heroes program because of your occupation, Home Sweet Texas provides the same types of assistance with the same general structure.

Home Sweet Texas is open to both first-time and repeat buyers, making it an excellent option for anyone who meets the income and credit requirements, even if they have owned a home before.

Grant vs. Second Lien: Understanding Your Options

One of the most important decisions you will make when using a TSAHC program is choosing between the grant option and the second lien option. Here is how each one works.

The Grant Option

The TSAHC grant is a true, non-repayable gift. When you choose the grant option, you receive a percentage of your loan amount (typically 3% to 5%) at closing to cover your down payment and closing costs. You never have to pay this money back, regardless of whether you sell the home, refinance, or pay off the mortgage.

The trade-off for the grant option is typically a slightly higher interest rate on your primary mortgage. Because the grant costs the program money that is never recouped, TSAHC offsets this cost by charging a modestly higher rate on the first mortgage. Even with this adjustment, the overall financial benefit of the grant usually makes it the best choice for buyers who plan to sell or refinance within the first few years of ownership.

Here is an example:

• Home price: $325,000
• FHA loan amount: $313,625
• Grant at 5%: $15,681
• This covers: Full 3.5% FHA down payment ($11,375) plus $4,306 toward closing costs
• Interest rate: May be 0.25% to 0.75% higher than the second lien option

The Second Lien Option

The second lien option provides the same dollar amount of assistance but structures it as a subordinate loan on the property. This second lien typically carries a 0% interest rate and requires no monthly payments. Repayment is deferred until you sell, refinance, transfer title, or pay off the primary mortgage.

The advantage of the second lien option is a lower interest rate on your primary mortgage. Because TSAHC eventually recoups the DPA funds, the program can offer a more competitive rate on the first mortgage. This makes the second lien option a better choice for buyers who plan to stay in their home for the long term.

Here is a side-by-side comparison to illustrate the difference:

Feature	Grant Option	Second Lien Option
DPA Amount	Up to 5%	Up to 5%
Repayment Required	No, never	Yes, upon sale or refinance
Monthly Payments on DPA	None	None
First Mortgage Rate	Slightly higher	Lower
Best For	Short to mid-term ownership	Long-term ownership

Your loan officer at Cook Brothers Mortgage Team at Cornerstone First Mortgage (NMLS #173855) can run both scenarios for you and show you which option saves you the most money based on your expected timeline in the home.

Eligibility Requirements

TSAHC programs share many eligibility requirements with other Texas DPA programs, but there are important details specific to TSAHC.

Income Limits

TSAHC sets income limits based on the county where you are purchasing and the size of your household. These limits are designed to serve low-to-moderate-income buyers, but in many Texas counties the limits are generous enough to include households earning six-figure incomes.

Income limits are updated annually. As a general guideline, many Texas metro areas allow household incomes up to approximately $100,000 to $125,000, depending on household size and location. To see the exact limits for your area, check your eligibility through our online qualifier quiz.

Credit Score Requirements

TSAHC programs typically require a minimum credit score of 620. Some loan types within the program may accept scores as low as 580 with additional conditions. Your loan officer can help you understand what score you need based on the specific program and loan type you are pursuing.

Purchase Price Limits

Like all Texas DPA programs, TSAHC sets maximum purchase price limits by county. These limits are based on area home prices and are updated regularly. In most major Texas metro areas, the purchase price limit is high enough to cover the majority of homes on the market.

Buyer Type

Both TSAHC programs are available to first-time and repeat home buyers. You do not need to be a first-time buyer to qualify for either Homes for Texas Heroes or Home Sweet Texas. This is a significant advantage over programs like My First Texas Home, which requires first-time buyer status.

Professional Eligibility for Heroes Program

If you are applying for the Homes for Texas Heroes program, you must provide documentation of your employment in an eligible profession. This typically means a verification letter from your employer or other proof of employment. The eligibility verification is straightforward, and our team will guide you through what documentation is needed.

Property Requirements

The home must be your primary residence. Eligible property types include single-family homes, townhomes, condominiums, and certain manufactured homes. Investment properties and second homes are not eligible.

Homebuyer Education

TSAHC requires all borrowers to complete an approved homebuyer education course before closing. This can typically be done online at no cost and takes a few hours to complete. Your loan officer will provide you with a list of approved providers and ensure this requirement is met well before your closing date.

The Application Process

Applying for TSAHC down payment assistance is a streamlined process when you work with an approved lender like Cook Brothers Mortgage Team at Cornerstone First Mortgage.

Step 1: Pre-Qualification and Program Selection

Reach out to our team for a pre-qualification assessment. We will review your financial profile and help you determine whether the Homes for Texas Heroes or Home Sweet Texas program is the right fit. We will also help you decide between the grant and second lien options.

Step 2: Homebuyer Education

Complete your homebuyer education course early in the process. This prevents any delays once you find a home and need to move quickly.

Step 3: Home Search

Armed with your pre-qualification letter, work with a real estate agent to find a home that meets the program's purchase price and property requirements.

Step 4: Full Application and Documentation

Once you have a signed contract on a home, submit your full mortgage application with all supporting documentation, including income verification, employment history, bank statements, tax returns, and identification.

Step 5: Processing, Underwriting, and Fund Reservation

Your loan moves through processing and underwriting while we reserve your DPA funds through TSAHC's system. Fund availability is generally reliable, but we monitor it closely to protect your reservation.

Step 6: Closing Day

At closing, your DPA funds are applied to the transaction. You sign your documents, receive your keys, and become a homeowner. The timeline from application to closing is typically 30 to 45 days, consistent with standard mortgage timelines.

TSAHC vs. TDHCA: Which Should You Choose?

Both agencies offer excellent DPA programs, but the right choice depends on your circumstances:

• Choose TSAHC if you want a true grant that never has to be repaid, if you are a repeat buyer, or if you qualify for the Heroes program through your profession.
• Choose TDHCA if you prefer a forgivable second lien structure or if TDHCA's income or purchase price limits are more favorable for your specific county.

In many cases, you may qualify for programs from both agencies. Our team at Cook Brothers Mortgage Team at Cornerstone First Mortgage will compare all available options and recommend the program that puts you in the best financial position. Use our DPA calculator to start exploring the numbers.

Ready to Get Started?

TSAHC's down payment assistance programs are among the best in the nation, offering grants that never have to be repaid and competitive mortgage rates for Texas home buyers of all backgrounds. Whether you are a teacher, firefighter, veteran, or simply a Texan looking for a path to homeownership, TSAHC may have a program for you.

Take the first step today. Check your eligibility using our free online quiz and see which programs you qualify for in minutes. You can also call us directly. Reach Tanner Cook at 480-420-4918 or Zac Cook at 480-406-2016 to speak with a DPA specialist at Cook Brothers Mortgage Team at Cornerstone First Mortgage.

Tanner Cook is a licensed mortgage loan originator (NMLS #2090424). This content is for informational purposes only and does not constitute financial advice. Loan approval is subject to credit and property qualification. Equal Housing Lender.