What Is Down Payment Assistance in Texas? A Complete Guide for 2026
Learn how down payment assistance works in Texas. Explore TDHCA and TSAHC programs, grants, forgivable liens, eligibility requirements, and how to apply in 2026.
What Is Down Payment Assistance?
For many aspiring homeowners in Texas, saving up for a down payment feels like the single biggest obstacle standing between them and their dream home. The good news is that Texas offers some of the most generous down payment assistance (DPA) programs in the country, designed to help qualified buyers bridge the gap between what they have saved and what they need to close on a home.
Down payment assistance is exactly what it sounds like: financial help that covers part or all of your down payment and, in many cases, your closing costs. These programs are funded by state housing agencies, local governments, and nonprofit organizations. They exist because homeownership is one of the most powerful wealth-building tools available to American families, and state leaders want to make it accessible to as many Texans as possible.
If you have been putting off buying a home because you think you need tens of thousands of dollars in savings, this guide will show you that there is another path forward.
How Does Down Payment Assistance Work in Texas?
Texas DPA programs work by pairing a primary mortgage loan with a secondary source of funds that covers your down payment and sometimes your closing costs. When you use a DPA program, you are not simply receiving free money with no strings attached. Instead, you are accessing a structured benefit that is tied to your first mortgage.
Here is the general process:
- You apply for a mortgage through an approved lender who participates in one or more Texas DPA programs.
- The lender evaluates your eligibility based on the specific program requirements, including income limits, credit score thresholds, and purchase price caps.
- If you qualify, the DPA funds are layered on top of your primary loan and delivered at closing.
- Depending on the program, your DPA may come as a grant, a forgivable second lien, or a deferred second lien.
The key takeaway is that you work with a single lender who handles both your primary mortgage and the DPA component. You do not need to apply to a separate agency on your own. That is where our team at Cook Brothers Mortgage Team at Cornerstone First Mortgage (NMLS #173855) comes in. We are approved to originate loans through every major Texas DPA program and can guide you through the entire process.
The Two Major Texas Housing Agencies
Texas has two state-level housing agencies that administer the most widely used DPA programs:
Texas Department of Housing and Community Affairs (TDHCA)
TDHCA is the larger of the two agencies and operates two flagship programs:
- My First Texas Home - Designed for first-time home buyers (or those who have not owned a home in the past three years), this program offers up to 5% of the loan amount in DPA, delivered as a deferred, forgivable second lien.
- My Choice Texas Home - Open to first-time and repeat buyers alike, this program also provides up to 5% in DPA as a deferred second lien, though the terms differ slightly from My First Texas Home.
Both TDHCA programs pair their DPA with competitive 30-year fixed-rate first mortgages, including FHA, VA, and USDA loan options.
Texas State Affordable Housing Corporation (TSAHC)
TSAHC administers two programs that are especially popular because one of them offers assistance in the form of a non-repayable grant:
- Homes for Texas Heroes - Available to teachers, first responders, corrections officers, veterans, and other public servants, this program provides DPA as either a grant or a second lien.
- Home Sweet Texas - Open to all eligible buyers regardless of profession, this program also offers grant and second lien options.
TSAHC programs are notable because the grant option never has to be repaid, making them some of the most attractive DPA offerings in the state.
Types of Down Payment Assistance
Not all DPA is structured the same way. Understanding the differences will help you identify which program is the best fit for your situation.
Grants
A grant is the most favorable form of DPA. It is money provided to you at closing that does not have to be repaid, period. TSAHC offers grant options through both of its programs. If you qualify for a grant, you are essentially receiving free money toward your home purchase. The grant typically covers up to 5% of the loan amount.
Forgivable Second Liens
A forgivable second lien is a secondary loan placed on your property that is forgiven over time. TDHCA's My First Texas Home program, for example, provides DPA as a second lien that is forgiven after a set period, usually three years, as long as you remain in the home. If you sell or refinance before the forgiveness period ends, you may need to repay part or all of the second lien.
Deferred Second Liens
A deferred second lien is a secondary loan with no monthly payments required. Repayment is deferred until you sell the home, refinance, or pay off the first mortgage. This option is common in programs designed for repeat buyers or for buyers who do not qualify for the forgivable option.
Repayable Second Liens
Some programs offer DPA as a second mortgage with monthly payments at a low interest rate. These are less common in Texas state programs but may appear in local city or county programs.
Eligibility Basics
While each program has its own specific requirements, most Texas DPA programs share the following general eligibility criteria:
- Income limits: Your household income must fall below a certain threshold, which varies by county and household size. In many Texas metro areas, households earning up to $120,000 or more can still qualify.
- Credit score: Most programs require a minimum credit score of 620, though some options are available with scores as low as 580.
- Purchase price limits: The home you are buying must fall below a maximum purchase price, which varies by county.
- Occupancy: You must occupy the home as your primary residence.
- Homebuyer education: Most programs require you to complete a homebuyer education course, often available online and free of charge.
- First-time buyer status: Some programs require that you have not owned a home in the past three years. Others are open to repeat buyers.
The best way to find out whether you qualify is to check your eligibility using our quick online tool. It takes just a few minutes and gives you a clear picture of which programs may work for you.
How Much Help Can You Actually Get?
The amount of DPA you can receive depends on the program, but most Texas programs offer between 3% and 5% of the total loan amount. Here is what that looks like in practice:
| Home Price | 3% DPA | 5% DPA |
|---|---|---|
| $250,000 | $7,500 | $12,500 |
| $300,000 | $9,000 | $15,000 |
| $350,000 | $10,500 | $17,500 |
| $400,000 | $12,000 | $20,000 |
For many buyers, 5% is more than enough to cover both the down payment and a significant portion of closing costs. Use our DPA calculator to see exactly how much you could receive based on your target home price.
An Overview of the Four Major Programs
Here is a quick comparison to help you understand the landscape:
| Program | Agency | Buyer Type | DPA Type | DPA Amount |
|---|---|---|---|---|
| My First Texas Home | TDHCA | First-time | Forgivable 2nd lien | Up to 5% |
| My Choice Texas Home | TDHCA | All buyers | Deferred 2nd lien | Up to 5% |
| Homes for Texas Heroes | TSAHC | Eligible professions | Grant or 2nd lien | Up to 5% |
| Home Sweet Texas | TSAHC | All buyers | Grant or 2nd lien | Up to 5% |
Each program has nuances that can make one a better fit than another depending on your income, credit profile, profession, and buying history. We recommend reading our detailed guides on each program to learn more:
Frequently Asked Questions
Do I have to be a first-time home buyer to qualify for DPA in Texas?
No. While some programs like My First Texas Home require first-time buyer status, others such as My Choice Texas Home and Home Sweet Texas are available to repeat buyers as well.
Can I use DPA with an FHA loan?
Yes. All four major Texas DPA programs work with FHA loans, and many also support VA and USDA loans. FHA loans are particularly popular because they allow credit scores as low as 580 with certain DPA options.
Is down payment assistance really free?
It depends on the program. TSAHC grants never have to be repaid. TDHCA forgivable second liens are forgiven after a set period. Deferred second liens must be repaid when you sell, refinance, or pay off the first mortgage. None of these programs require monthly payments on the DPA portion.
How long does it take to close with DPA?
Closing timelines are similar to a standard mortgage, typically 30 to 45 days. Working with an experienced DPA lender like Cook Brothers Mortgage Team at Cornerstone First Mortgage can help ensure a smooth, on-time closing.
Will using DPA affect my interest rate?
DPA programs typically offer competitive 30-year fixed rates that are comparable to market rates. In some cases, the rate may be slightly higher than a conventional loan without DPA, but the overall savings from the down payment assistance far outweigh any minor rate difference.
Can I combine DPA with seller concessions?
Yes, in most cases you can. Seller concessions can cover additional closing costs, which means your out-of-pocket expense could be very minimal. Your loan officer can help you structure the transaction to maximize your benefits.
Ready to Get Started?
Texas has some of the best down payment assistance programs in the nation, and qualifying might be easier than you think. Whether you are a first-time buyer, a teacher, a veteran, or simply someone who needs a little extra help getting to the closing table, there is likely a program that fits your situation.
Take the first step today. Check your eligibility with our free qualifier quiz and find out which Texas DPA programs you may qualify for. If you have questions, our team is here to help. Call Tanner Cook at 480-420-4918 or Zac Cook at 480-406-2016 to speak with a DPA specialist.
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.
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