First-Time Buyers · 8 min read
Texas runs two statewide assistance agencies and dozens of local programs, and income limits are consistently higher than people assume. The most common reason buyers miss out isn't ineligibility — it's never asking.
Written and reviewed by Jonathan Sarver, Licensed Mortgage Loan Officer · NMLS #993872
Last updated July 23, 2026
Key takeaways
TDHCA and TSAHC are separate Texas agencies that each run statewide homebuyer assistance through networks of participating lenders.
The Texas Department of Housing and Community Affairs (TDHCA) and the Texas State Affordable Housing Corporation (TSAHC) are both legitimate state programs, and their offerings overlap enough that buyers reasonably ask which is better. There's no universal answer — it depends on your income, county, household size, credit, loan type, and occupation.
Both work the same basic way: you get a 30-year fixed first mortgage through an approved lender, plus assistance toward your down payment and closing costs. Neither is a separate application you file with the state; you access them through a participating lender.
Most Texas down payment assistance comes as a forgivable or deferred second lien at 0% interest — not as cash in hand.
This trips people up. The assistance is generally applied at closing toward your down payment and eligible closing costs, in an amount up to roughly 5% of the loan amount depending on the program.
Structures vary. Some programs forgive the assistance after you've lived in the home for a set period. Some defer it with no monthly payment until you sell or refinance. A few local programs offer outright grants that never repay. Which structure applies materially changes what happens if you move in three years, so it's a question worth asking specifically.
The question to ask
Is this a grant, a forgivable second lien, or a deferred second lien — and if forgivable, how long must I stay? The answer determines your exposure if plans change.
Limits vary by county and household size, and in higher-cost Texas counties they can reach well beyond what most buyers assume disqualifies them.
This is the single biggest reason eligible Texans never apply. Buyers hear 'assistance program' and assume it's for very low incomes only, so they never check. Limits are set by county and household size, and in metro counties they're often considerably higher than the local median income.
Purchase price limits apply as well, and those also vary by county. Between the two, the practical effect is that assistance reaches further in moderately-priced markets — much of the Austin metro's suburbs, San Antonio, Houston, and most of the rest of the state — than in the priciest zip codes.
Because both income and price limits are adjusted periodically and differ by location, the only reliable answer is to check yours specifically rather than rely on a figure quoted in an article.
An MCC converts a percentage of your annual mortgage interest into a direct federal income tax credit that lasts the life of the loan.
This is the most underused benefit in Texas homebuying, and it works differently from a deduction. A deduction reduces taxable income. A credit reduces your tax bill dollar for dollar — which is considerably more valuable.
The certificate applies a credit rate to the mortgage interest you pay each year, subject to an annual cap. Because it recurs annually for as long as you hold the loan and live in the home, the cumulative value over a decade can be substantial.
Critically, an MCC can generally be combined with down payment assistance. So a buyer can receive help getting into the home and an ongoing annual tax benefit afterward. Credit rates, caps, and issuance fees are set by program and change, so confirm current terms with your lender before counting on a specific figure.
Expect a minimum credit score around 620, occupancy as your primary residence, income and purchase price within county limits, and a homebuyer education course.
Requirements differ between programs, but the shape is consistent across most Texas assistance.
Beyond the two statewide agencies, many Texas cities and counties run their own assistance programs that can sometimes be layered with state help.
Austin, Houston, Dallas, San Antonio, and numerous smaller jurisdictions operate local down payment assistance, often through a housing finance corporation. Amounts, eligibility, and rules differ substantially from place to place.
Whether local and state assistance can be combined depends on the specific programs involved. Sometimes they stack, sometimes they conflict. It's worth asking your lender to check what exists in the specific city or county you're buying in — this is genuinely local knowledge, and it changes.
The cost of checking eligibility is a short conversation; the cost of not checking can be thousands of dollars and years of waiting.
We regularly talk to buyers who assumed they earned too much, or assumed assistance was only for first-timers, or simply never heard these programs existed. Several of them qualified.
Assistance won't fit every situation. If you have 20% down and strong credit, a straightforward conventional loan is often the better and cheaper path. But that should be a conclusion you reach after checking, not a default from never asking.
Program details change
Income limits, credit rates, and structures are adjusted periodically by TDHCA, TSAHC, and local agencies. Treat this guide as an orientation and confirm current terms for your county before making decisions.
Not necessarily. TDHCA's My First Texas Home is aimed at first-time buyers, but My Choice Texas Home is open to repeat buyers, and TSAHC's Home Sweet Texas serves buyers meeting income requirements regardless of first-time status. There are also exceptions for veterans and for purchases in designated targeted areas.
Statewide programs through TDHCA and TSAHC generally provide up to about 5% of the loan amount toward down payment and eligible closing costs. Local city and county programs vary considerably and can sometimes be layered on top. The exact amount depends on the program, your loan type, and your county.
It depends on the structure. Assistance is commonly provided as a forgivable second lien — forgiven if you remain in the home for a required period — or as a deferred second lien with no monthly payment, repaid when you sell or refinance. Some local programs offer outright grants. Always confirm which structure applies before closing.
Income limits vary by county and household size, and they're often higher than buyers expect — in some Texas counties well into six figures for larger households. Because the limits differ by location and are adjusted over time, the practical answer is to have a participating lender check your specific county and household size rather than assume you're over.
An MCC converts a percentage of your annual mortgage interest into a direct federal tax credit, subject to an annual cap, for as long as you hold the loan and live in the home. Because a credit reduces your tax bill dollar for dollar rather than just reducing taxable income, the cumulative value can be significant. It can generally be paired with down payment assistance, and there's typically a one-time fee at closing.
Yes. Texas assistance programs commonly layer on top of FHA financing, and that combination is one of the most-used paths for first-time buyers in the state. Assistance can also pair with conventional and VA loans depending on the program.
Jonathan Sarver
Licensed Mortgage Loan Officer · NMLS #993872 · Licensed in Texas
Hill Country Mortgages, Lakeway TX. In mortgages since 2012. Questions about how this applies to your situation? Get in touch.
Keep reading
Ready when you are
Guides explain the rules. A licensed Texas loan officer tells you how they apply to your actual numbers.
Talk to a loan officerThis is not a commitment to lend. All loans subject to credit approval, income and asset verification, and property appraisal. Rates and terms vary and are not guaranteed.