Texas First-Time Homebuyer Programs Overview
First-time homebuyers in Texas have access to several state and local programs that can significantly reduce the upfront costs of purchasing a home. These programs offer down payment assistance (DPA), closing cost credits, and below-market mortgage rates through two primary state agencies: TSAHC and TDHCA.
Definition of "first-time homebuyer" for these programs: You have not owned a home in the past 3 years (not lifetime). Many programs also apply to veterans regardless of whether they've owned before.
TSAHC Programs (Texas State Affordable Housing Corporation)
TSAHC is the primary source of first-time buyer assistance in Texas. They offer two main programs:
Home Sweet Texas (HST) — For Most Buyers
- Down payment assistance: 3%–5% of loan amount as a grant (non-repayable) or as a deferred second lien at 0% interest
- Mortgage type: 30-year fixed FHA, VA, USDA, or conventional
- Income limit: Varies by county and family size — approximately $90,000–$120,000 for Travis County
- Home price limit: $450,000 in most Austin-area counties
- Credit minimum: 620 for most loan types
Homes for Texas Heroes — For Public Service Professions
Same as HST plus additional eligibility for:
- Veterans and active duty military
- K–12 educators
- Police, fire, and EMS
- Corrections officers and juvenile justice staff
- Nurses and allied health professionals
Additional benefit for Heroes: Mortgage Credit Certificate (MCC) — a federal tax credit of 20–40% of annual mortgage interest, worth $1,000–$3,000/year for Austin-area buyers.
How to access TSAHC programs: Must use a TSAHC-approved lender. Full list at tsahc.org/homebuyers.
TDHCA Programs (Texas Department of Housing and Community Affairs)
My First Texas Home (MFTH)
- Down payment assistance: Up to 5% of loan amount as a 0% interest, deferred second lien
- Mortgage: 30-year fixed at below-market rate (TDHCA sets rates weekly)
- Income limit: Area Median Income (AMI) limits — approximately $85,000–$105,000 for Austin area
- Credit minimum: 620
Texas Mortgage Credit Certificate (MCC)
- Available as a standalone program without the MFTH mortgage
- 20% tax credit on annual mortgage interest (not deduction — actual credit)
- Can be combined with any mortgage type
- Reduces federal tax liability by $1,000–$3,000/year for most Austin buyers
City of Austin Homebuyer Assistance Program
The City of Austin offers direct down payment assistance for Austin proper (within Austin city limits):
- Assistance amount: Up to $40,000 for income-qualifying buyers
- Structure: 0% interest deferred loan, forgiven after 5–10 years of residency
- Income limit: 80% of Austin Area Median Income (~$65,000–$75,000 for a family of 4)
- Home price limit: ~$450,000 for Austin proper
- Requirement: Must purchase within Austin city limits
Apply through Austin's Housing Department: austintexas.gov/housing.
Travis County Down Payment Assistance
Travis County offers the Travis County Down Payment Assistance Program for properties in unincorporated Travis County (outside Austin city limits):
- Assistance: Up to $25,000 toward down payment and closing costs
- Structure: Forgivable loan with residency requirement
- Income limit: 80% AMI
- Must use: Approved Travis County lender
How Austin Buyers Can Stack Programs
Savvy buyers can combine multiple programs to maximize assistance:
Example combination for a veteran buyer:
- VA loan (zero down, no PMI)
- TSAHC Homes for Texas Heroes DPA (3% closing cost grant)
- TSAHC Mortgage Credit Certificate (20% tax credit on interest = ~$1,500/year)
Total benefit: Zero down payment + $12,000+ in closing cost coverage on a $400,000 home + $1,500/year tax savings
Example combination for a non-veteran first-time buyer:
- TDHCA My First Texas Home (5% DPA, below-market rate)
- Texas MCC (20% tax credit)
- City of Austin HAP (if buying within Austin limits, up to $40,000 additional)
Total benefit: Down payment + closing costs fully covered on homes under $350,000
Income and Price Limits for Austin Area (2025)
| Program | Income Limit (Family of 4) | Max Home Price |
|---|---|---|
| TSAHC Home Sweet Texas | ~$115,000 | $450,000 |
| TSAHC Heroes | ~$115,000 | $450,000 |
| TDHCA My First Texas Home | ~$100,000 | $450,000 |
| City of Austin HAP | ~$72,000 | ~$450,000 |
| Travis County DPA | ~$72,000 | $350,000 |
Note: Limits update annually — always verify current limits directly with the program.
Steps to Access Texas Homebuyer Assistance
- Check eligibility: Verify income, credit score, and first-time buyer status
- Complete homebuyer education: Both TSAHC and TDHCA require 8-hour HUD-approved homebuyer education course (available online, free at ehomeamerica.org)
- Find an approved lender: Must use a program-approved lender (not just any lender)
- Get pre-approved: The lender will structure the primary loan and DPA simultaneously
- Find a home: Within program price limits and your approved budget
- Close: DPA funds are applied at closing
Frequently Asked Questions
TSAHC grants (3–5% DPA) are true grants — never repaid. TDHCA and City of Austin assistance are deferred 0% loans forgiven after 5–10 years of residency. Selling early may require prorated repayment.
Yes. TSAHC's Homes for Texas Heroes specifically includes veterans and active duty military. Veterans can stack VA loan (zero down) with TSAHC closing cost grants and the Mortgage Credit Certificate.
