How to Apply for Texas Down Payment Assistance: Step-by-Step

Applying for down payment assistance in Texas is more straightforward than most people think. While the process involves a few more steps than a standard mortgage, working with the right lender makes it manageable and efficient. In this guide, we walk through the entire process from start to finish so you know exactly what to expect.

Whether you are applying through TDHCA or TSAHC, the general process follows the same eight steps. Here is your complete roadmap to getting Texas down payment assistance.

Step 1: Get Pre-Qualified

The journey starts with a pre-qualification. This is an initial assessment of your financial picture to determine whether you are likely to qualify for down payment assistance and a mortgage.

During pre-qualification, your lender will review:

• Your approximate income and employment status
• Your general credit profile
• Your debt obligations
• Your savings and assets

Pre-qualification is typically a quick conversation or online submission. It does not require a hard credit pull in most cases, and it gives you a preliminary idea of which DPA programs may be available to you.

Our qualifier quiz is a great way to start this process before you even speak with a loan officer. It takes just a few minutes and gives you an initial read on your eligibility.

Timeline: Same day to a few days

Step 2: Complete Homebuyer Education

Every Texas DPA program, whether through TDHCA or TSAHC, requires completion of a homebuyer education course. This is a non-negotiable requirement, so it is best to get it done early.

Homebuyer education courses cover topics like:

• The mortgage application process
• Understanding loan terms and interest rates
• Budgeting for homeownership
• Maintaining your home and protecting your investment
• Avoiding predatory lending

You can complete the course online or in person through a HUD-approved housing counseling agency. Online courses typically take four to eight hours and can be completed at your own pace. Costs are usually modest, ranging from free to around $100.

Some approved providers include:

• eHome America
• Framework Homeownership
• Various local HUD-approved agencies

Once you complete the course, you will receive a certificate of completion that your lender will need during the application process.

Timeline: 1 day to 2 weeks (depending on when you schedule it)

Step 3: Find a DPA-Approved Lender

This step is critical. Not every mortgage lender is approved to originate loans through TDHCA and TSAHC programs. You must work with an approved lender who has been trained and certified to offer these specific products.

The Cook Brothers Mortgage Team at Cornerstone First Mortgage (NMLS #173855) is approved for all four state DPA programs. Working with a team that specializes in down payment assistance means you get expert guidance on which program fits best, and the process runs more smoothly because your lender knows the program requirements inside and out.

What to look for in a DPA lender:

• Approval status with both TDHCA and TSAHC
• Experience closing DPA transactions
• Ability to compare all four programs side by side
• Responsiveness and clear communication

Timeline: Same day (if you contact us, we are ready to go)

Step 4: Get Fully Pre-Approved

Pre-approval is more thorough than pre-qualification. This step involves a formal mortgage application, a hard credit pull, and verification of your income, assets, and employment.

During pre-approval, your lender will:

• Pull your credit report and scores
• Verify your income through pay stubs, W-2s, and tax returns
• Confirm your employment with your employer
• Review your bank statements for assets and reserves
• Determine the specific DPA programs you qualify for
• Issue a pre-approval letter with your maximum purchase price

A pre-approval letter is essential when you start making offers on homes. It shows sellers that you are a serious, qualified buyer with financing in place.

Timeline: 1 to 3 business days

Step 5: Find Your Home

With your pre-approval in hand, it is time to go house hunting. Work with a real estate agent who is familiar with DPA transactions, as there are some nuances they should understand:

• The home must meet the purchase price limits set by the DPA program for the county where you are buying
• The property must be your primary residence
• The home must meet minimum property standards (FHA, VA, or USDA requirements depending on loan type)
• Certain property types may not be eligible (confirm with your lender)

Your real estate agent should also be aware that DPA transactions may involve slightly different timelines and paperwork compared to conventional deals.

Timeline: Varies widely (a few weeks to several months)

Step 6: Submit Your Full Application and Make an Offer

Once you find a home and your offer is accepted, your lender will finalize your loan application with the specific property information. This includes:

• Updating your application with the property address and purchase price
• Locking your interest rate with the DPA program
• Ordering the home appraisal
• Submitting the complete loan file to underwriting

Your lender will also confirm which DPA program provides the best terms for your specific transaction. Sometimes the ideal program becomes clearer once the actual purchase price and property details are known.

Timeline: 1 to 3 business days after offer acceptance

Step 7: Underwriting and Processing

Underwriting is where your loan file is reviewed in detail to ensure everything meets program guidelines and lending standards. During this phase:

• An underwriter reviews your credit, income, assets, and employment documentation
• The home appraisal is completed and reviewed to confirm the property value supports the purchase price
• Title work is ordered to ensure the property has clear title
• Any conditions or additional documentation requests are communicated through your lender

DPA loans go through the same fundamental underwriting process as any mortgage. The main difference is that the underwriter also verifies compliance with the specific DPA program requirements, such as income limits and purchase price limits.

During this stage, it is important to:

• Respond quickly to any document requests from your lender
• Avoid making major financial changes (do not open new credit accounts, make large purchases, or change jobs)
• Keep your bank account balances stable
• Stay in communication with your loan officer

Timeline: 2 to 3 weeks

Step 8: Close on Your New Home

Once your loan is fully approved and cleared to close, you will schedule your closing date. At closing:

• You will sign your mortgage documents and DPA program paperwork
• You will pay any remaining closing costs not covered by DPA (in many cases, DPA covers most or all closing costs)
• The title company will record the transaction
• You will receive the keys to your new home

DPA funds are disbursed at closing, so you do not receive the money ahead of time. The assistance is applied directly to your down payment and closing costs as part of the closing transaction.

Timeline: 1 day (closing itself typically takes one to two hours)

Total Timeline: 30 to 45 Days

From the time your offer is accepted to closing day, a typical DPA transaction takes 30 to 45 days. This is similar to a standard mortgage timeline. The steps that happen before you find a home (pre-qualification, homebuyer education, and pre-approval) can be completed in as little as one to two weeks if you are proactive.

Required Documents Checklist

To keep the process moving smoothly, have these documents ready:

• Identification: Government-issued photo ID
• Income: Most recent 30 days of pay stubs, W-2s for the past two years, federal tax returns for the past two years
• Self-Employment (if applicable): Two years of business tax returns, profit and loss statement
• Assets: Most recent 60 days of bank statements for all accounts
• Employment: Contact information for your employer(s) for verification
• Homebuyer Education: Certificate of completion
• Credit: Your lender will pull this directly (no need to provide)
• Other: Gift letters (if applicable), divorce decree or separation agreement (if applicable), bankruptcy or foreclosure discharge papers (if applicable)

Tips for a Smooth Application Process

Start Early

Complete your homebuyer education and get pre-approved before you start house hunting. This puts you in the strongest possible position when you find the right home.

Stay Organized

Create a folder (digital or physical) with all your documents. When your lender asks for something, you want to provide it within 24 hours to keep the timeline on track.

Communicate Proactively

If anything changes during the process, such as a job change, new debt, or large deposit, tell your lender immediately. Surprises during underwriting can cause delays.

Do Not Make Big Financial Moves

From the time you apply until you close, avoid opening new credit cards, financing a car, making large cash deposits, or changing jobs. Any of these can affect your loan approval.

Trust Your Team

The right lender and real estate agent make the process significantly easier. Lean on their expertise and ask questions whenever something is unclear.

Ready to Get Started?

The application process begins with a simple step: finding out if you qualify. Take our free qualifier quiz to get an initial assessment in just a few minutes. Or, contact us directly to start your pre-qualification today.

• Tanner Cook - NMLS #2090424 - (480) 420-4918
• Zac Cook - NMLS #2111496 - (480) 406-2016

Zac Cook is a licensed mortgage loan originator (NMLS #2111496). 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.