First Time Home Buyer Programs in Texas 2023
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Texas offers a variety of programs to home buyers through the Texas State Affordable Housing Corporation (TSAHC) and the Texas Department of Housing & Community Affairs (TDHCA), some of which target first-time home buyers. TSAHC is a non-profit organization that was created to follow the direction of the Texas Legislature, so while they are not technically a government organization, their mission is to create affordable housing throughout Texas. TDHCA is a government agency that sponsors mortgages through The Texas Homebuyer Program. These programs offer lower mortgage rates, down payment assistance, and cheaper mortgage insurance premiums to make housing available to everyone. You can use the Texas Mortgage Calculator to compare different mortgage loans. You can also take advantage of federal home buyer programs that provide similar benefits.
First-Time Home Buyer Eligibility Calculator
Texas State Programs | |||
|---|---|---|---|
| No | Program | Type | Jurisdiction |
| 1 | My First Texas Home Program | Main Programs | Texas State |
| 2 | Home Sweet Texas Home Loan Program | ||
| 3 | Mortgage Credit Certificate (MCC) Program | Optional Add-On | |
| 4 | Homes for Texas Heroes Program | Restricted Eligibility to Certain Professions | |
Federal Programs | |||
| No | Program | Type | Jurisdiction |
| I | Conventional Mortgage | Fannie Mae and Freddie Mac | Federal |
| II | FHA Loan | Federal Housing Administration | |
| III | VA Loan | US Department of Veterans Affairs | |
| IV | USDA Loan | U.S. Department of Agriculture | |
Texas State Programs
Main Programs
TSAHC offers easy-to-use assistance for home buyers and helps with the home buying process. They have recommended real-estate agents familiar with their programs to help you take full advantage of the opportunities available. Of their many services, they provide home buyer assistance through their two main programs: My First Texas Home Program and Home Sweet Texas Home Loan Program.
1. My First Texas Home Program
The My First Text Home Program offers government-insured loans sponsored by Texas through The Texas Homebuyer Program. These loans have a 30-year fixed-term and low mortgage rates. You can also receive a grant or forgivable second-lien loan of up to 5% to help meet your minimum down payment requirement and pay for closing costs with their Down Payment Assistance (DPA). You can also expect lower mortgage insurance premiums since the loan is insured by the government. TSAHC programs are only accessible through participating lenders.
- Property located within Texas
- A first-time home buyer (You have not owned a home in the last 3 years), a certified Veteran, or buying a property within a federally-designated target area
- You must meet the income limits and property value limits set by your county
- A minimum credit score of 620
- Take an online home buyer education course
- You must be purchasing either a single-family unit, a single unit in condominium developments and planned unit developments, or a duplex unit (exceptions apply)
Visit the official My First Texas Home page for more information.
2. Home Sweet Texas Home Loan Program
The Home Sweet Texas Home Loan Program is another program offered by TSAHC. These loans are also government-insured and offer a 30-year fixed-mortgage with a low mortgage rate. These loans have the same requirements as the My First Texas Home Program, except you do not need to be a first-time home buyer, veteran, or targetted area home buyer. Instead, this program aims to help home buyers with low to moderate incomes. Your income could make you eligible for certain TSAHC programs without having to meet the basic home buyer classification requirement.
If you are eligible, take TSAHC’s official eligibility quiz and for more information, visit TSAHC’s official Home Sweet Texas Home Loan Program page.
Optional Add-On
TSAHC offers first-time home buyers an optional add-on program that will not interfere with other benefits: Mortgage Credit Certificates (MCC) Program.
3. Mortgage Credit Certificate (MCC) Program
In addition to the DPA program, first-time home buyers have access to TSAHC’s Mortgage Credit Certificate (MCC) program. This program aims to help first-time home buyers save on taxes using an MCC tax credit. Your monthly mortgage payment contains a portion going toward paying interest to your lender instead of buying your home’s equity. This portion can be used as a federal tax credit and you can reduce your federal taxes by up to $2000 per year.
- First-time home buyer (You have not owned a home in the last 3 years)
- Eligible for the Home Sweet Texas Home Loan Program or the Homes for Texas Heroes Program
- No minimum credit score required
- $500 upfront cost (exceptions exist)
Visit TSAHC’s official MCC savings page to see how much you can save throughout your mortgage term.
Restricted Eligibility to Certain Professions
The TSAHC expands its program benefits to certain public sector professions in addition to certified veterans through a restricted mortgage program: Homes for Texas Heroes Program.
4. Homes for Texas Heroes Program
The Homes for Texas Heroes Program gives the same benefits to home buyers as the My First Texas Home Program, which provides a 30-year fixed-rate mortgage with low mortgage rates and down payment assistance. You do not need to be a first-time home buyer to be eligible for this program. However, as a first-time home buyer, you are eligible for an MCC and if you qualify, it is free.
You must be one of the following:
- Teachers
- Police Officers
- Firefighters and EMS Personnel
- Corrections Officers:
- Veterans
If you have a related profession, you might still be eligible for this program. For more information, visit TSAHC’s official website.
Texas County Programs
Texas has 254 counties, and many of them have different programs that target first time home buyers as well as people who have not owned their house for 3 or more years. These programs may provide a second loan or a grant towards a down payment and closing costs. Usually, a full list of the programs available can be found on the website of a specific county.
Harris County Programs
Harris County has numerous programs that support homeowners in different situations. On the other hand, it has only one program that is available for first time home buyers. It is important to look for other programs available on state and municipal levels to get the most benefit out of the local programs offered.
1. Downpayment Assistance Program
This program provides financial assistance to first time home buyers, and it can be used towards the down payment as well as closing costs. Down Payment Assistance Program provides opportunities to buy a house within the limits of Harris County. The maximum amount that can be received using this program is $23,800 as a forgivable loan that can be fully forgiven if the property is held as a primary residence for up to 10 years.
- Must be a U.S. Citizen, Permanent Resident, or Have an Eligible Immigration Status.
- First-time home buyer (You have not owned a home in the last 3 years).
- A Minimum Credit Score of 580.
- Household Income at or below 80% of Area Median Income.
- Debt-to-Income Ratio (DTI) Cannot Exceed 42%.
- Must Contribute at Least $1000 Towards the Purchase of the Home.
- Cannot Have More Than $15,000 in Liquid Assets, Such as Stocks, Cash, or Bonds.
Dallas County Programs
This county has many different programs to support homeowners and home buyers. These programs can be found on a county level as well as municipal levels. Dallas County Housing Agency provides one upfront cost assistance program that can help cover the closing costs as well as a part of the down payment.
1. Upfront Cost Assistance Program
Upfront Cost Assistance Program (UPCAP) provides financing opportunities for homeowners that need assistance with covering closing costs and the down payment. The program provides a deferred loan of up to $7,500 that can be granted to a first time home buyer and be used towards closing costs, down payment, and pre-paid costs.
- Must be a U.S. Citizen, Permanent Resident, or Have an Eligible Immigration Status.
- First-time home buyer (You have not owned a home in the last 3 years).
- Household Income at or below 80% of Area Median Income.
- Must Contribute at Least $1000 Towards the Purchase of the Home.
- Cannot Have More Than $7,000 in Liquid Assets, Such as Stocks, Cash, or Bonds.
Travis County Programs
Travis County is another region that has its own first time home buyer program. This program aims to help first time home buyers to increase their chances of receiving an FHA, VA, or USDA loan.
1. Hill Country Home Down Payment Assistance
This program is offered by the Travis County Housing Finance Corporation. This program is designed to help first time borrowers to get approved for an FHA, VA, USDA, or Freddie Mac HFA Advantage loan to purchase a home within the Travis County limits. This program provides assistance from 4% to 6% of the initial principal balance.
- A Minimum Credit Score of 640.
- Debt-to-Income Ratio (DTI) Cannot Exceed 45%.
- Home Purchased Is Located Within Travis County.
- Household Income at or below 140% of Area Median Income.
Texas Municipal Programs
In addition to the federal and state programs available to homebuyers in Texas, some municipalities also provide certain assistance programs that may be useful to homebuyers looking to purchase a property in a specific municipality. Most of the municipal programs are concentrated in the largest cities of Texas, such as Houston or Dallas, but smaller municipalities may also have some programs available. It is best to contact a municipal housing department to find the most up-to-date information about assistance programs available in a specific city.
Houston Programs
The City of Houston offers two major programs to help first time home buyers purchase a property. Both of these programs are offered by the City of Houston, so more detailed information on the programs can be easily found on their website.
1. Homebuyer Assistance
A homebuyer assistance program can provide up to $30,000 in financing to income-qualified individuals. This program is offered directly by the City of Houston, and it has limited funding. This assistance is a no-interest, forgivable loan secured by a lien. The loan is fulfilled if the buyer lives in the home for five years. If the buyer sells or moves out of the home before the end of five years, they must pay back the City of Houston a portion of the original loan amount.
- First-time home buyer (You have not owned a home in the last 3 years).
- Household Income at or below 80% of Area Median Income.
- Able to Obtain a Fixed-Rate Mortgage From a Lender.
- Home You Want to Purchase Pays Taxes to the City of Houston.
2. Harvey Homebuyer Assistance Program
This program was developed after Hurricane Harvey, so the main target for this assistance are first time home buyers and homeowners whose houses got damaged during the hurricane. Similar to the previous program, the Harvey Homebuyer Assistance Program offers up to $30,000 to income-qualified individuals. It also has slightly different requirements from the Homebuyer Assistance program, which means that different demographics can apply to this program.
- First-time home buyer (You have not owned a home in the last 3 years) or Lost a Home in Hurricane Harvey.
- Household Income at or below 120% of Area Median Income.
- Able to Obtain a Fixed-Rate Mortgage From a Lender.
- Home You Want to Purchase Pays Taxes to the City of Houston
San Antonio Programs
San Antonio has multiple programs that may be useful for first time home buyers as well as current homeowners to purchase a property. Depending on the eligibility requirements, a borrower in San Antonio may be able to find a program that will fit their needs. The following programs are designed for first time homebuyers to pay towards a down payment.
1. Homeownership Incentive Program (HIP 80)
This program provides a forgivable loan from $1,000 to $30,000 that can be used towards a down payment on a property purchase. This loan has a 0% interest rate, and it can be forgiven over a 10-year period. More specifically, the first $15,000 is forgiven over the first 5 years and another $15,000 is forgiven over the other 5-year period. A borrower who chooses to apply for this program must meet the eligibility criteria.
- First-time home buyer.
- Able to Obtain a Fixed-Rate Mortgage From a Lender.
- Household Income Limit Ranges From $41,550 To $73,550.
2. Homeownership Incentive Program (HIP 120)
This program provides a forgivable loan from $1,000 to $15,000 that can be used towards a down payment on a property purchase. This loan has a 0% interest rate, and 75% of the principal is forgiven over the 10-year period. The other 25% of the loan is perpetual. A perpetual loan means that the principal does not have to be paid off indefinitely, so a borrower can pay it off for as long as they need.
- First-time home buyer.
- Able to Obtain a Fixed-Rate Mortgage From a Lender.
- Household Income Limit Ranges From $62,250 To $110,250.
- Minimum of $500 in Earnest Money Deposit.
Dallas Programs
The City of Dallas does not have programs that specifically target first time home buyers, but it does have a few programs for homebuyers in general.
1. Dallas Homebuyer Assistance Program
Dallas Homebuyer Assistance Program (DHAP) is one of the largest programs available in Dallas. It is run by the City of Dallas, and it provides assistance to first time home buyers looking to purchase a house within the limits of Dallas. The program provides assistance based on the need, which means that there is no fixed limit to the amount a person can receive through this program. The program still has certain requirements that must be met by an applicant.
- Must be a U.S. Citizen, Permanent Resident, or Have an Eligible Immigration Status.
- Household Income at or below 80% of Area Median Income.
- The House Purchased Is Located Within the City of Dallas.
2. Targeted Occupations Homebuyer's Assistance Program
This program aims at a certain demographic with certain job titles. It provides homeownership opportunities to people who work in education, healthcare or protective services. Similarly to the Dallas Homebuyer Assistance Program, this program provides funding on a case-by-case basis, so there is no limit to the amount of funding a person can receive.
- Must be a U.S. Citizen, Permanent Resident, or Have an Eligible Immigration Status.
- Household Income Between 80% and 120% of Area Median Income.
- The House Purchased Is Located Within the City of Dallas.
- Must Have an Executed Real Estate Sales Contract And Mortgage Lender Approval.
- Eligible Occupations:
- Education Instruction And Library Occupations.
- Healthcare Practitioners And Technical Occupations.
- Healthcare Support Occupations.
- Protective Services Occupations, Including But Not Limited To Fire Fighters And Police Officers.
Austin Programs
Austin has only one program that is available for first time home buyers. It might be a useful addition to the programs offered on state and federal levels.
1. Down Payment Assistance
First time home buyers in Austin can receive up to $40,000 in down payment assistance offered to income-qualifying individuals. The funds can be used towards a down payment or closing costs.
- First-time home buyer (You have not owned a home in the last 3 years).
- Have been displaced or divorced.
- The House Purchased Is Located Within the City of Austin.
- Household Income at or below 80% of Area Median Income.
Fort Worth Programs
This city has a lot of initiatives that support homeowners, but they have only one program aimed at first time homebuyers.
1. Homebuyer Assistance Program
This program is provided by the City of Fort Worth, and it provides assistance of up to $20,000 to income-eligible first time home buyers. The amount of assistance depends on the sale price and loan amount from the lender. Only 3% of the assistance can be used for closing costs while the rest can go towards a down payment.
- First-time home buyer.
- Household Income at or below 80% of Area Median Income.
- The House Purchased Is Located Within the City of Fort Worth.
- Able to Obtain a Fixed-Rate Mortgage From a Lender.
- The Home Must Pass a Minimum Acceptable Standards Inspection.
Federal Programs
The federal government offers an additional mortgage option for low-income home buyers. They also have targeted mortgages insured by different government departments. These include FHA Loans, VA Loans, USDA Home Loans, and loans from the Good Neighbor Next Door Program.
I. Conventional Loan
Fannie Mae and Freddie Mac are federally-backed associations that provide liquidity, stability, and affordability in the housing market. Each association has specific loan programs to improve mortgage affordability. Mortgages that meet minimum purchase standards and loan amounts are considered conforming loans and are insured by private lenders and government-sponsored agencies. Fannie Mae’s HomeReady program only has a minimum down payment of 3% and Freddie Mac’s HomePossible program offers low mortgage rates with minimal down payment requirements and has no credit score requirement.
II. FHA Loan
The Federal Housing Administration (FHA) is a U.S. government agency that insures FHA mortgages issued by FHA-approved lenders. FHA loans are targeted toward low to moderate-income earners and have lower requirements than other loans. They are available as fixed or adjustable-rate loans but have fixed mortgage terms of 15 or 30 years. The FHA mortgage rates are determined by lenders and are affected by your credit score. Visit the FHA Loans page for more information.
III. VA Loan
The United States Department of Veterans Affairs (VA) is a U.S. government agency that insures mortgages strictly issued to certified veterans by approved lenders. These loans typically have lower mortgage rates and the only down payment required is how much the home’s price exceeds its market value. Visit the VA Loans page for more information.
IV. USDA Home Loan
The United States Department of Agriculture (USDA) is a U.S. government agency that insures USDA mortgages issued by USDA-approved lenders. USDA loans are targeted toward properties within locations designated as rural areas and have lower requirements than other loans. They are available as fixed or adjustable-rate loans but have fixed mortgage terms of 15 or 30 years. The mortgage rates are lower than conventional loans and have lower mortgage insurance premiums.