Down Payment Assistance in Texas: What First Time Buyers Miss

Most first time buyers in Texas think down payment assistance is one program. It is not. It is a menu of state programs with different rules, and the part buyers miss is not that the money exists. It is how the money is structured. A grant you never repay, a lien that is forgiven after three years, and a second loan you pay back when you sell are three very different things. Pick the wrong structure and you leave money on the table or sign up for a surprise later.

The two agencies behind the money

Almost every statewide program in Texas runs through one of two agencies. The Texas Department of Housing and Community Affairs, called TDHCA, runs the Texas Homebuyer Program. The Texas State Affordable Housing Corporation, called TSAHC, runs its own programs for homebuyers. You will never apply to either agency directly. You work with a participating lender, and the lender pairs the assistance with your mortgage.

The three ways the money arrives

First, the grant. TSAHC offers down payment assistance as a grant in amounts of 2 to 5 percent of the total loan amount, per its program guidelines revised September 9, 2026. A grant never has to be repaid, no matter how long you stay in the home. It is available with government loan types, and the minimum credit score is 620.

Second, the deferred forgivable second lien. This is a loan with zero interest and no monthly payments, and it is forgiven in full on the third anniversary of the note. The catch is the conditions. If you sell, refinance, pay off the first mortgage, or move out of the home before that date, the full amount comes due. TSAHC offers this structure at the same 2 to 5 percent levels, with a 640 minimum credit score for its conventional options. TDHCA offers a similar 3 year deferred forgivable second lien at 2 to 5 percent of the loan amount, per its rate notice dated July 2, 2026.

Third, the deferred repayable second lien. TDHCA offers this version too: zero interest, no monthly payments, but you repay it when you sell, refinance, or pay off the first mortgage. Same 2 to 5 percent assistance levels. This option usually pairs with a slightly lower rate on the first mortgage than the forgivable version, which is the tradeoff worth understanding before you choose.

Which program fits which buyer

TSAHC runs two flagship programs. Homes for Texas Heroes serves teachers, firefighters, EMS personnel, police officers, correctional officers, and veterans. Home Sweet Texas serves low to moderate income buyers. You do not have to be a first time buyer for the Heroes program, which is the detail veterans miss most.

TDHCA runs My First Texas Home for first time buyers, meaning buyers who have not owned a home in the past three years, and My Choice Texas Home for buyers who have owned before, including repeat buyers. Both pair with FHA (see the 2026 Texas loan limits), VA, USDA, or conventional mortgages depending on the option you choose. TDHCA also offers a Mortgage Credit Certificate, which is a federal tax credit on a portion of your mortgage interest each year you own the home. It does not lower your payment, but it can lower your federal tax bill, which frees up room in your budget.

If you are shopping the Dallas market, start with my breakdown of how much house you can afford in Dallas so you know your target price before you match it to a program.

What buyers miss

• You must use a participating lender. A lender who is not approved for these programs cannot get you the money, no matter how good they look on paper. Ask before you apply.
• Income limits are set by county. Every program has maximum income limits that vary by county and household size. Being over the limit for one program does not mean you are over for all of them.
• There are purchase price limits too. The home has to fall under the program’s maximum price for your county.
• Most programs require a homebuyer education course. It is a few hours, usually online, and you want it done before you write an offer.
• The money is not unlimited. Funding can pause when a program’s allocation runs out. Confirm the program is open before you count on it.
• Assistance can cover closing costs, not just the down payment. Many buyers think DPA only covers the down payment, and then scramble for closing costs. The programs are built for both.
• Local programs can stack with state programs. Many Texas cities and counties run their own grants and assistance. Ask your lender what layers in your area.
• The forgivable lien only forgives if you stay put. Sell or refinance before the third anniversary and the full amount is due. Know your timeline before you choose this structure.

The part nobody tells you

Down payment assistance covers the down payment and often the closing costs, but it does not replace your emergency fund. I tell every buyer to keep reserves. Homeownership brings repairs and surprises, and starting with zero savings is how a small problem becomes a big one.

Sources

TSAHC Program Guidelines for Down Payment Assistance and MCC, revised September 9, 2026 (tsahc.org). TSAHC homebuyer FAQ: Loans and Down Payment Assistance (tsahc.org). TDHCA Borrower Down Payment Assistance rate notice, dated July 2, 2026 (welcomehome.tdhca.texas.gov).

Want to know which programs you qualify for and which structure fits your timeline? Start your application and I will map your options with you, or call (954) 655-5676.

---

Arlicia Jones, NMLS 1550570
Elite Lending Solutions, Inc., Company NMLS 1829246

T (954) 655-5676
F (800) 852-2175
E LoansByArlicia@gmail.com
A 1525 HWY 380 STE 500-173, Frisco, Texas 75034