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Home Down Payment Assistance What down payment assistance programs are available to help you secure your first home in Texas?
Down Payment Assistance

What down payment assistance programs are available to help you secure your first home in Texas?

written by Jordan Marie Schilleci, Realtor®, Jo & Co October 3, 2023

Did you know there are programs that offer first-time homebuyers in Texas thousands, or even tens of thousands of dollars to help with the upfront costs of buying a home? 

Saving up a down payment is the biggest challenge for most homebuyers. Down payment assistance is designed to help you overcome this challenge and secure your first home sooner. 

Below, we’ve included a list of all the down payment assistance (DPA) programs available to homebuyers in Texas. But first: what exactly is DPA, and how do you apply for it? 

What is down payment assistance?

Down payment assistance is an important way for cities, states, and local lenders to help homebuyers increase their purchasing power and afford a home. 

Almost all DPA programs in Texas come in the form of forgivable loans and liens. There are a few grants, like the City of Abilene First Time Buyer Program, but by and large, if you get DPA in Texas it will come in the form of a forgivable loan or lien.

As the name suggests, these loans and liens are forgivable, meaning you don’t have to repay the money as long as you meet a few basic forgiveness requirements. Once those requirements are met, the loan/lien is lifted. 

Most programs simply require you to live in the home for a certain number of years (usually between three and ten) without selling, refinancing, or renting it out. You must also consistently make your mortgage payments on time. 

How do I qualify for DPA? 

To qualify for down payment assistance, you’ll have to meet certain eligibility requirements. Each DPA program sets its own rules, but these requirements usually involve meeting a minimum credit score threshold and having a household income below a certain level. 

Although there is some variation from program to program, most programs in Texas use these requirements:

  • Minimum credit score: Usually 620 or 640, although some programs are lower.
  • Maximum Income: Equal to or less than 80% of the area median income, though some allow for higher incomes.

Down payment assistance in Texas: Statewide programs

These are the Texas down payment assistance programs available to homebuyers statewide. 

TSAHC Home Sweet Texas HFA Loan

The TSAHC Home Sweet Texas HFA Loan is a forgivable loan available everywhere in Texas. It can be fully forgiven after three years, provided you don’t sell or refinance during that time.

  • Assistance type: Forgivable loan
  • Assistance amount: Up to 5% down payment, no fixed maximum
  • Learn more: Home Sweet Texas HFA Loan

TSAHC Homes for Texas Heroes HFA Loan

The TSAHC Homes for Texas Heroes HFA Loan is available to teachers, emergency medical professionals, police, veterans, and active duty service members. It is eligible for forgiveness after three years. 

TDHCA My First Texas Home Down Payment Assistance Lien

The TDHCA My First Texas Home Down Payment Assistance Lien is a flexible program for first-time home buyers. The lien can either be a three-year forgivable lien or a 30-year deferred repayment lien, based on your needs.

TDHCA My Choice Texas Home Down Payment Assistance Lien

The TDHCA My Choice Texas Home Down Payment Assistance Lien offers first-time homebuyers in Texas a forgivable or deferred repayment second lien. Forgivable liens are eligible for forgiveness after three years and deferred repayment liens are eligible after thirty years.

Veterans Housing Assistance Program

The Veterans Housing Assistance Program is a special mortgage loan program for veterans and active duty service members. The loan structure is flexible, offering repayment timelines between 15 and 30 years, and the interest rate is usually lower than the market rate.

Down payment assistance in Texas: Local programs

These DPA programs are available to homebuyers purchasing in specific cities, counties, or regions in Texas. 

SETH 5 Star Texas Advantage Forgivable Lien

The SETH 5 Star Texas Advantage Forgivable Lien is available in most parts of Texas, with the exception of: Travis County, El Paso, McKinney, and Grand Prairie. It is eligible for forgiveness after three years. 

City of Abilene First Time Buyer Program

The City of Abilene First Time Buyer Program is a grant for those purchasing their first home within the city limits of Abilene.

City of Arlington Homebuyer Assistance Program

The City of Arlington Homebuyer Assistance Program is a forgivable loan available only to first-time home buyers living in Arlington. It is eligible for forgiveness at the five or ten year mark, based on the terms set at closing.

Austin’s Down Payment Assistance Program

Austin’s Down Payment Assistance Program is a forgivable loan available to first-time homebuyers purchasing within Austin city limits. The loan offers a higher maximum payout, up to $40,000, if you accept a loan with a longer forgiveness timeline. 

Dallas Homebuyer Assistance Program

The Dallas Homebuyer Assistance Program offers up to $60,000 in down payment assistance to homebuyers living in Dallas. The program offers higher income limits to long-term Dallas residents and buyers who work in education, healthcare, or emergency services. 

City of Frisco Targeted Down Payment Assistance Program

The City of Frisco Targeted Down Payment Assistance Program is a forgivable loan for homebuyers who have worked for the City of Frisco or the Frisco Independent School District for at least six months. The forgiveness timeframe is five years. 

The City of Ft. Worth Homebuyer Assistance Program

The City of Ft. Worth Homebuyer Assistance Program is a forgivable loan with a five or ten year forgiveness timeframe, depending on the loan amount. 

Houston Homebuyer Assistance Program

The Houston Homebuyer Assistance Program is a forgivable loan for homebuyers purchasing within Houston city limits. It has a forgiveness timeframe of five years. 

City of Irving Down Payment Assistance Program

The City of Irving Down Payment Assistance Program offers a relatively large down payment assistance loan for first-time homebuyers living in Irving. The forgiveness timeline is determined by the loan amount, with larger loans requiring a longer forgiveness timeframe.

City of McKinney Down Payment and Closing Cost Assistance

The City of McKinney Down Payment and Closing Cost Assistance program offers a forgivable loan which can be used to pay closing costs or make a larger down payment. The forgiveness timeframe is five years.

City of Odessa Homebuyer Assistance Program

The City of Odessa Homebuyer Assistance Program offers a forgivable loan with a higher maximum for buyers purchasing a newly constructed home. The city will also provide up to $4,000  to pay closing costs.

The City of Plano’s First Time Homebuyers Program

The City of Plano’s First Time Homebuyers Program is a forgivable loan that offers a higher assistance amount to lower-income buyers. The forgiveness timeline is between five and fifteen years, depending on the loan amount.

San Antonio Housing Assistance Program

The San Antonio Housing Assistance Program is a forgivable loan of up to $30,000 for first-time homebuyers purchasing within city limits. The assistance timeline is between five and ten years, depending on the loan amount.

San Antonio Homeownership Incentive Program: HIP 80

The San Antonio Homeownership Incentive Program: HIP 80 is a forgivable loan for homebuyers in San Antonio with a total household income less than or equal to 80% of the area median income.

San Antonio Homeownership Incentive Program: HIP 120

The San Antonio Homeownership Incentive Program: HIP 120 is similar to HIP 80, but it has a higher income limit (120% of the area median income) and a lower loan maximum. Seventy-five percent of the money is forgivable after ten years.

City of Waco Homebuyer Down Payment Assistance Program

The City of Waco Homebuyer Down Payment Assistance Program is a low-cost loan for first-time homebuyers in Waco. The loan can be used to cover the down payment and closing costs, and it gets repaid over the life of your mortgage loan.

National down payment assistance programs 

NHF Down Payment Assistance Program

The NHF Down Payment Assistance Program is available to homebuyers nationwide. The loan is forgivable, and the forgiveness timeframe is determined at the time of closing.

How do I apply for down payment assistance?

Applying for down payment assistance is relatively straightforward. 

Once you find a program for which you qualify, you’ll need to apply through a lender who is approved by the program. In most cases, you submit your DPA application at the same time you apply for your mortgage. 

The money you get can be used to make your down payment, and in some cases it can also be used to pay closing costs. Just make sure you follow the program requirements and only use the assistance to pay for approved costs. 

After that, enjoy your new home and the purchasing power you gained with down payment assistance.  

If you need help finding a trusted lender who works with your assistance program, Stairs Financial can help. Contact us to learn more about trusted lenders in Texas who work with DPA.

Collaborator:

Mike Romano is the VP of Business Development & Marketing at Stairs Financial. He is a mortgage industry veteran with over 20 years of experience. His expertise spans mortgage technology, credit risk, and loan origination, and he has spoken at many mortgage and fintech conferences. He has a Bachelor's and MBA from the University of California, Berkeley, and currently resides in Austin, TX. NMLS # 2515901

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