Texas is one of the more forgiving states to buy your first home in, and that’s not an accident. The state builds a lot of housing, land is relatively plentiful outside the big metros, and prices — while they’ve climbed — still sit below the national average in most counties. That said, “Texas is affordable” hides a huge range. A starter home in Lubbock, Amarillo, or the Rio Grande Valley is a very different animal from one in Austin, where prices run well above the state norm, or the fast-growing suburbs around Dallas-Fort Worth and Houston. Property taxes are the other Texas wrinkle everyone talks about: the state has no income tax, so it leans harder on property taxes to fund schools and local services, and those bills can be meaningfully higher than what buyers in other states expect. The good news is that Texas has two well-funded state agencies handing out real down payment help, and this guide walks you through all of it in plain English — the kind of rundown I’d give my own sibling before they started touring homes.
Before we dig in, one framing note: down payment assistance (money to help cover the cash you put down and your closing costs) is not free money with no strings. Some of it is a grant you never repay, some is a loan that sits quietly behind your main mortgage and gets forgiven over time, and some has to be paid back. Knowing which kind you’re getting matters more than the headline dollar amount. Let’s start with the two agencies that run the show.
The headline programs: TDHCA and TSAHC
Texas is a little unusual in that it has two statewide homebuyer agencies rather than one. The Texas Department of Housing and Community Affairs (TDHCA) runs “The Texas Homebuyer Program,” and the Texas State Affordable Housing Corporation (TSAHC) runs its own parallel set of programs. They don’t compete so much as overlap, and a good lender will quote you both so you can see which fits your situation. You apply through an approved lender, not by walking into a government office.
TDHCA: My First Texas Home and My Choice Texas Home
TDHCA’s flagship is My First Texas Home, built for first-time buyers (defined as someone who hasn’t owned and lived in their home in the last three years — veterans and buyers in certain “targeted” areas get an exception). It pairs a 30-year fixed-rate mortgage with down payment and closing-cost assistance of up to 5% of the loan amount. On a $250,000 loan, that’s around $12,500 toward your upfront cash. The assistance comes as a second lien behind your main mortgage; depending on the structure you choose, it can be a deferred, forgivable loan, so read the terms your lender gives you.
If you’ve owned before, TDHCA’s My Choice Texas Home offers the same up-to-5% assistance without the first-time requirement, though the terms can differ slightly. Both programs work with FHA, VA, USDA, and conventional loans.
TSAHC: Homes for Texas Heroes and Home Sweet Texas
TSAHC’s two signature programs are Homes for Texas Heroes and Home Sweet Texas. Homes for Texas Heroes is aimed at people in specific professions — teachers, police officers, firefighters, EMS, corrections officers, veterans, and certain nurses and allied health workers. Home Sweet Texas is the general-public version for low-to-moderate income buyers. Both provide down payment assistance as either a grant or a forgivable second lien, typically in the range of 3% to 5% of the loan amount, and neither strictly requires you to be a first-time buyer. TSAHC also offers a Mortgage Credit Certificate (MCC) that turns part of your annual mortgage interest into a federal tax credit — potentially worth a few hundred to a couple thousand dollars a year for as long as you hold the loan.
Income limits and eligibility
Income limits vary by county and household size and change periodically, so treat any number you read online (including here) as a ballpark to confirm with a lender. As a rough guide, TDHCA limits in many counties land around $97,000 for smaller households and about $111,000+ for households of three or more, with higher-cost metros like Austin and Dallas allowed higher ceilings. There are also home purchase-price limits tied to your county. Practically speaking, most working- and middle-class Texas families qualify somewhere in this system.
- A credit score of roughly 620 or higher is the common floor for these programs.
- You must intend to live in the home as your primary residence — these aren’t for investment properties.
- Income and purchase-price caps apply and depend on your county.
- Most first-time buyers qualify even if a co-borrower has owned before, but confirm the specifics.
Homebuyer education
Both TDHCA and TSAHC require a homebuyer education course before closing. It’s usually an online class that takes a few hours and costs little or nothing. Don’t roll your eyes at it — a decent course genuinely demystifies escrow, insurance, and what all those closing documents mean. Our first-time buyer guide covers the same ground if you want a head start.
Which loan is right for you?
Down payment assistance sits on top of a regular mortgage — so your first decision is what kind of loan to get underneath it. Here are the four main options in plain terms.
FHA loans
Backed by the Federal Housing Administration, FHA loans are the workhorse for first-time buyers with thinner credit or smaller savings. You can put as little as 3.5% down with a credit score around 580, and the qualifying standards are more forgiving than conventional. The tradeoff is mortgage insurance you’ll pay for the life of the loan in most cases, which you can eventually shed by refinancing once you have equity.
USDA loans
Texas has enormous rural and small-town acreage, which makes USDA loans more relevant here than in many states. If you’re buying in a USDA-eligible area (much of the state outside the major metros qualifies) and meet the income limits, you can finance 100% — zero down payment. It’s one of the most underused tools for buyers willing to live outside a big city.
VA loans
Texas has one of the largest veteran populations in the country, and VA loans are hard to beat if you’ve served: zero down, no monthly mortgage insurance, and competitive rates. Texas veterans also have access to the state’s own Veterans Land Board loan programs, which can layer on top. If you’re eligible, start here before anything else.
Conventional loans
A conventional loan (not government-backed) can go as low as 3% down for first-time buyers through programs like HomeReady and Home Possible. If your credit is strong, conventional often wins because you can cancel private mortgage insurance once you hit 20% equity — something FHA generally won’t let you do. TDHCA and TSAHC assistance both pair with conventional loans.
What homes cost and what you’ll need
Beyond the down payment, budget for closing costs, which typically run 2% to 5% of the purchase price. On a $260,000 home, that’s roughly $5,200 to $13,000 covering lender fees, title insurance, appraisal, and prepaid escrow for taxes and insurance. This is exactly where down payment assistance earns its keep — many Texas buyers use their DPA to cover closing costs rather than the down payment itself.
Now, the Texas property-tax conversation. Because there’s no state income tax, property taxes do a lot of heavy lifting, and effective rates are among the higher ones nationally — often well above 1.5% of assessed value in many districts once you add up school, county, and municipal levies. What does that mean for you? Your monthly payment will include a bigger escrow chunk for taxes than a buyer in, say, Colorado would see on the same-priced home. Ask your lender to show you the full “PITI” payment (principal, interest, taxes, insurance) so you’re not surprised. The bright spot: Texas offers a homestead exemption that reduces the taxable value of your primary residence, so file for it as soon as you close. Learn more about stacking help on our down payment assistance overview.
The buying process in Texas
Buying a home in Texas follows a familiar arc, but one national rule change reshaped how you work with an agent. As of August 17, 2024, following the NAR (National Association of Realtors) settlement, buyers must sign a written buyer agreement with their agent before touring homes. That agreement spells out how your agent gets paid, and — this is the important part — that commission is now fully negotiable and no longer quietly advertised in the MLS (the shared listing database agents use). In practice this means you should talk dollars and terms with any agent up front. We break down exactly what changed in our NAR settlement explainer.
Here’s the typical sequence once you’re ready.
- Get pre-approved. A lender verifies your income, credit, and savings and tells you your realistic budget. In competitive Texas metros, sellers won’t take you seriously without this.
- Reserve your assistance. Because TDHCA and TSAHC funds are limited and first-come, first-served, tell your lender early that you want to use them so they can lock the program.
- Choose an agent and sign the buyer agreement. Interview a couple, understand their fee, and get it in writing. Our guide to finding an agent helps you vet candidates.
- Tour and make an offer. Your agent runs comparable sales and helps you land on price and terms.
- Option period and inspection. Texas has a distinctive “option period” — for a small fee, you get a set number of days to inspect and back out for any reason. Use it. Get a professional inspection.
- Appraisal and underwriting. Your lender confirms the home’s value and finalizes your loan.
- Close. You sign, your assistance is applied, and you get the keys.
For the full step-by-step nationally, see our home buying process walkthrough, and browse other state guides if you’re comparing markets.
Texas first-time buyer FAQ
Do I have to be a first-time buyer to get Texas assistance?
Not always. My First Texas Home is for first-time buyers (no ownership in the past three years), but My Choice Texas Home and several TSAHC programs are open to repeat buyers too. If it’s been more than three years since you owned, you may count as a first-time buyer again anyway.
How much down payment help can I actually get?
Typically up to 5% of your loan amount through TDHCA, and 3% to 5% through TSAHC. On a mid-priced Texas home, that’s roughly $8,000 to $15,000 — often enough to cover your entire down payment on an FHA loan, or your closing costs on a low-down conventional loan.
Why are Texas property taxes so high?
Because Texas has no state income tax, local governments rely heavily on property taxes to fund schools and services. Effective rates are among the higher ones in the nation. Budget for it in your monthly payment, and file for the homestead exemption on your primary residence to trim the bill.
Can I use a USDA zero-down loan in Texas?
Yes, and Texas has a lot of USDA-eligible territory. If you’re buying in a qualifying rural or small-town area and meet the income limits, you can finance the whole purchase with no down payment. It’s one of the best-kept secrets for buyers open to living outside the major metros.
What credit score do I need?
Most TDHCA and TSAHC programs look for a score around 620. Some FHA loans allow lower scores on their own, but the assistance programs tend to set 620 as the floor. If you’re below that, spend a few months paying down balances and correcting credit-report errors before applying.
Do these programs ever run out of money?
Funding is limited and often reserved first-come, first-served, so the practical answer is: don’t wait. Once you’re pre-approved and have chosen a lender, ask them to reserve your assistance early rather than after you’re under contract.
Sources: Texas Department of Housing and Community Affairs / The Texas Homebuyer Program (tdhca.texas.gov), Texas State Affordable Housing Corporation (tsahc.org), U.S. Department of Housing and Urban Development (hud.gov), U.S. Department of Agriculture Rural Development (rd.usda.gov), and the National Association of Realtors (nar.realtor). Program figures vary by county and change periodically; confirm current limits with a participating lender. Last reviewed July 2026.
More Texas first-time buyer resources
Ready to go deeper? Our complete guide to Texas first-time home buyer programs breaks down every state loan, down payment assistance option, and tax credit available to first-time buyers here.
Buying in a major metro? See our local guides for Houston, San Antonio, Dallas, and Austin, each covering the city’s own down payment programs on top of the statewide help.
More Texas city guides
Buying in a specific Texas metro? See our first-time buyer guides for Fort Worth and El Paso, each covering the city’s own local down payment programs.
Looking specifically for grants in Texas?
If you want to zero in on grant and forgivable money — the help you do not pay back — see our focused guide to first-time home buyer grants in Texas.