Down Payment Assistance in Austin TX
The biggest obstacle for Austin home buyers is not qualifying for a mortgage — it is saving enough cash for a down payment in a high-cost market. The good news: Austin and Texas have more DPA options than most cities in the country.
How Much Down Payment Do You Actually Need?
Many buyers overestimate the required down payment:
| Loan Type | Minimum Down Payment |
|---|---|
| VA Loan (veterans) | 0% |
| USDA Loan (rural areas) | 0% |
| FHA Loan | 3.5% |
| Conventional 97 | 3% |
| HomeReady / Home Possible | 3% |
| Standard Conventional | 5-20% |
For a $380,000 home in Round Rock with an FHA loan, 3.5% down = $13,300. Assistance programs can cover some or all of this.
Program 1: My First Texas Home (MFTH)
Offered through TDHCA. Provides 2-5% of the loan amount as down payment assistance.
- On $380,000: 3% DPA = $11,400 provided
- Structure: Deferred second lien, repaid when you sell or refinance
- Comes with a below-market first mortgage rate
- Available through participating lenders statewide
Program 2: TSAHC Home Sweet Texas
Texas State Affordable Housing Corporation offers:
- 3-5% grant or DPA loan — no repayment for the grant option
- Available at all income levels (not just low income) in many configurations
- Can be used with FHA, VA, USDA, or conventional loans
Program 3: City of Austin AHAP
- For buyers within Austin city limits, at or below 80% AMI
- Deferred forgivable loans — forgiven over time if you stay in the home
- Contact Austin Housing Finance Corporation: affordableaustinhomes.com
Program 4: National Homebuyer Programs
Freddie Mac BorrowSmart Access: Up to $2,500 grant for income-qualifying buyers using Home Possible loans.
Fannie Mae HomePath: 3% closing cost assistance on foreclosed Fannie Mae homes.
Chase Homebuyer Grant: Up to $7,500 in select Austin zip codes.
Bank of America: Up to $10,000 down payment grant in eligible communities.
Program 5: Employer-Assisted Housing (EAH)
Several major Austin employers offer housing assistance:
- Dell Technologies: Employee homeownership assistance programs
- Texas State University: Faculty and staff assistance programs
- Austin ISD: Teacher housing programs
Check your employer's HR benefits for home purchase assistance.
Program 6: Seller Concessions
Sellers can pay toward your closing costs:
- FHA/USDA: up to 6% of purchase price
- VA: up to 4%
- Conventional: 3% (under 10% down) or 6% (10%+ down)
Negotiating seller concessions effectively reduces your cash to close without a formal DPA program.
Stacking Programs for Maximum Benefit
The most cost-effective approach: combine programs:
- MFTH first mortgage (below-market rate) + MFTH DPA (3-5%) + MCC (tax credit)
- Conventional loan + TSAHC grant (3%) + seller concessions (3%)
With the right combination, Austin buyers can reduce out-of-pocket cash to close to nearly zero.
Frequently Asked Questions
Combined programs can cover 5-8% of the purchase price for qualifying buyers. A TSAHC 5% grant plus seller concessions could eliminate most or all upfront costs on an Austin suburb home. Income limits and purchase price caps apply — the key is working with a lender experienced in stacking multiple Texas programs.
Look for a TDHCA-participating lender (search at tdhca.state.tx.us) or a TSAHC-approved lender (search at tsahc.com). Not all lenders offer DPA programs — some specialty lenders focus exclusively on first-time buyer programs.
It depends on the program. TDHCA assistance is a deferred second lien repaid when you sell, refinance, or complete the first mortgage term. TSAHC grant funds do not require repayment. MCC is a tax credit — never repaid. Always understand the repayment terms before accepting assistance.
