Homeownership – 25 min read

The 8 Best Down Payment Assistance Programs in Texas

Texas first-time homebuyer? Here are the top 8 down payment assistance programs (and a helpful comparison table to make your decision easier).

Homeownership – 25 min read

Ready to buy your first home in one of the US’s fast-growing states? Texas has got a lot going for it: low cost of living, no income tax, and a booming job market. There’s no wonder so many first-time home buyers are snapping up property here. Yet, so many first-time home buyers are also drowning in all the information needed to purchase.

To help make your home-buying experience as stress-free and affordable as possible, we’ve taken our years of experience helping first-time home buyers in Texas and compiled a list of the eight best down payment assistance options available in Texas. We assessed all the programs on the following criteria: 

• How easy it is to meet their requirements

• How many locations you can use the program

• How much assistance they can offer

We’ve also included Houston, Dallas, Austin, and San Antonio-specific assistance to help bring you this curated list (with no bias) so you can pick the part of Texas that’s right for you.

Grab a cup of your favorite drink (maybe a cup of joe from the Giant Leap Coffee in Houston—our favorite!) because this is a good one. We’re going in deep. By the end of this article, you'll have the perfect-fit down payment program for your next chapter in Texas. 

Let’s begin!

If the down payment assistance landscape seems complicated to you, you're not alone. That's why we created Dwelling—we help aspiring homeowners match with the best down payment assistance programs without all the work. Find out how much you qualify for today.

What is down payment assistance?

A down payment assistance (DPA) program is a financial aid initiative typically offered by government agencies, nonprofit organizations, or private organizational lenders to help you purchase a home. These programs provide funds to cover a portion or the entire down payment required for buying the house of your dreams. 

First, let’s define a down payment. When you want to buy a house, you usually need to pay a portion of the home's price upfront. This upfront payment is called the "down payment." The size of a down payment can vary but is typically between 3.5% to 20% of the home’s price depending on which mortgage you have. 

However, securing a down payment can be challenging—especially in unstable economies. While Texas welcomes new businesses and residents—almost 900,000 new residents since 2020—limited housing and soaring home prices have intensified the struggle of homebuying. 

Down payment assistance types in Texas

Texas state and federal governments offer various down payment assistance programs that can make homeownership more accessible and affordable—your ‘bigger and better’ future in the Jumbo State is not so far off after all. DPA programs combined with the right mortgage for you will mean that you’ll be able to buy your dream home faster than you can say BBQ. 

A few different types of DPA programs are available to Texas buyers, including grants and loans. Howdy, savings! 

Dianne Moore (Head of Brokerage at Dwelling with 25+ years of Houston real estate experience) shared her advice for homebuyers when choosing between loans and grants in this way:

“There are two very common DPA options. One is an outright grant, where you would owe nothing, ever. The second frequent option is called a second forgivable lien, which operates like what I consider a "sleeping loan” – no payments are owed during a certain time window (often three years). Once that window of time expires, then that loan becomes, in effect, a grant, and disappears with nothing owed. 

If for any reason you need to sell your home or refinance your loan before that time restriction window expires, then you might have to pay that money back, but only at that point in time, and not during or before then.”

Here’s an overview of each of the different types of DPA programs available for homebuyers in Texas.

Grants: best for low-income individuals

These are funds provided to homebuyers that do not require repayment. First-time home buyer grants can significantly reduce the upfront costs of buying a home. This type of DPA program makes that step on the property ladder much more reachable.

Forgivable loans: best for low- and moderate-income buyers

A portion, or the entire loan amount, of these homebuyer loans, is forgiven after a specified period if certain conditions are met. For example, if you make timely mortgage payments, don’t sell the house, or don’t refinance the buy for, typically, 3-5 years. Examples of these are second-lien loans that are used to supplement the primary mortgage.

Deferred payment loans: best for homebuyers who have a steady income but need assistance with the down payment

These are loans that do not require monthly payments. Instead, the loan is repaid when the home is sold, refinanced, or the mortgage is paid off. For homebuyers, this means you can delay repayment until a later date, allowing them to focus on other homeownership expenses, like mortgage interest rates, closing costs, insurance and property taxes, etc.

Low-interest loans: best for middle-income buyers who can afford to make low monthly payments

Some DPA programs offer low-interest loans with favorable terms to homebuyers. These loans typically have lower interest rates than traditional mortgages, which can result in lower monthly payments and overall greater savings for the homebuyer over time.

Matched savings programs: best for couples that need a little extra push to save

Matching savings programs encourage homebuyers to save towards their down payment, with the program matching a portion of the funds saved. This incentivizes saving and helps accumulate a larger down payment using your own pocket.

There’s a lot of help available, you just need to find the program that matches your needs as well as one that you’re eligible for. Easier said than done, but we’ve strapped on our buyer’s boots, straightened our thinking caps, and we’re here to help. Read on.

Who is down payment assistance in Texas for?

DPA programs help make the dream of buying a house more accessible for those who might otherwise struggle to save a substantial down payment. They help promote housing affordability and expand access to the real estate market. 

They’re typically targeted toward:

• First-time homebuyers: that means someone who has not owned a home as their primary residence in the past three years

• Low-to-moderate-income households: these are households that make less than 80% of the area median income (AMI)

• Homebuyers with limited savings or resources to cover the down payment

Dianne Moore shared more on this:

"Down payment assistance helps buyers who need an extra hand when it comes to cash out of pocket at closing. Most buyers are doing a great job at managing life’s daily expenses, paying rent, and getting by. However, it’s another thing to save for an additional rental payment each month on top of everything else in order to build savings without life getting in the way.

Down payment assistance has allowed some of my past buyers to become the first homeowners in their entire family history! If that sometimes costs a buyer an extra quarter to a half point in interest to do so, then most buyers would agree that it’s worth it to jump from being a tenant to becoming a homeowner."

If you don’t use a down payment assistance program—either because you don’t meet the requirements or you have enough for the down payment— you can find other ways to make buying a house more affordable, such as Mortgage Credit Certificates. 

Check Dwelling to easily match with down payment assistance programs you qualify for in Texas in a few clicks. 

What are Mortgage Credit Certificates and who are they for?

A Mortgage Credit Certificate, MCC for short, is a financial boost you receive year after year. When you have an MCC, you can claim a portion of your mortgage interest as a tax credit when you file your income taxes. It covers up to 20% off your mortgage interest, for as long as you live in your home. This credit can lead to some considerable savings.

MCCs are often set up by state or local governments to assist people with moderate or low incomes. They're designed to encourage homeownership and make it more accessible to everyone. In a nutshell, an MCC helps you keep more of your hard-earned money while you enjoy the benefits of homeownership.

Who is eligible for down payment assistance?

The eligibility criteria for down payment assistance programs in Texas can vary depending on the specific program. However, here are some common eligibility factors:

• Income limits: Eligibility is often determined based on your income relative to the area's median income.

• First-time homebuyers: Some programs are designed exclusively for first-time homebuyers, while others may be open to both first-time and repeat buyers.

• Credit score: Certain programs may have minimum credit score requirements, but requirements can vary within Texas and depending on the program. Most look at your FICO credit score, not your Vantage score. (Don't forget you can find out your FICO mortgage credit score for free with Dwelling Credit)

• Residency: You may need to be a resident of Texas to qualify for state-specific programs.

• Home price limits: Some programs may impose restrictions on the maximum purchase price of the home.

• Completion of homebuyer education: Participation in homebuyer education courses is required for eligibility in most programs.

• Legal residency or citizenship: You may need to be a U.S. citizen or have legal residency status to be eligible for some programs.

• Property type: Only a specific type of property might be eligible for assistance (for example, only single-family homes, condos, townhouses, manufactured homes, etc.). However, all programs require that the new house is intended to be your primary residence.

• Location: Eligibility factors can also vary by city or county within Texas, as some local governments offer their own down payment assistance programs with unique requirements—we’ve covered Houston, Dallas, and San Antonio-specific assistance too. 

We discuss the eligibility criteria for each of the DPA programs mentioned in this article, so you have full certainty if the program will work for you or not. 

The top 8 down payment assistance programs in Texas

Before you say Dwelling’s all hat, no cattle, let’s get down to the nitty-gritty of the eight best Texas DPA programs we’ve rounded up.

At the end of each program description and requirements, you’ll find our rankings. The team at Dwelling takes into account three important factors to rank these first-time home buyer programs: 

• Eligible locations: giving higher rankings to those offering statewide programs

• Program requirements: income limits, credit scores, and other requirements ranked by how easy they are to meet

• Assistance payout: based on the types and value of assistance provided (for example, if the DPA is offered as grants or is about $30,000 it will be rated higher as one only offering loans and $1,000-$20,000 in assistance)

The final star rating given is an average of these three factors. Spoiler alert: Although Texas may be the Lone Star State, all of these programs are rated 3 stars and above! 

Now that you understand how we’ve ranked these DPA programs, let’s get moving because Texas won’t wait forever. Remember, the list is numbered, but they’re in no specific order—the first program is not necessarily the most highly ranked. 

1. The Texas Homebuyer Program by TDHCA: great for those who already have some savings and a moderate income 

The Texas Department of Housing and Community Affairs (TDHCA) is like your go-to homebuying buddy in Texas. They're not just about offering loans to assist with your down payment (DPA); they've got something extra up their sleeve – a nifty Mortgage Credit Certificate program. And, guess what? They offer a free homebuyer course to help you become a savvy expert on all things mortgages, interest rates, DPA programs, and more. 

The TDHCA can help you step into the world of homeownership feeling confident and well-prepared. 

Eligible locations: 📍📍📍📍📍

Program requirements:  💼💼

Assistance payout: 💰💰

Dwelling’s ranking:  ⭐️⭐️⭐️

• Program Name: The Texas Homebuyer

• Income Limits: $89,000-$102,350, depending on county

• Eligible Locations: State-wide

• Credit Requirements: Minimum credit score of 620

• Mortgage Type (FHA, VA, conventional): FHA, VA, USDA, and conventional loans

• Other Considerations (singles vs couples etc): All persons who will sign the Deed of Trust (including Non-Purchasing Spouse) will be considered for the income limit requirement. 

• Assistance Type (Grant, Forgivable Loan, Deferred, 2nd Mortgage): Second lien loan with up to 5% for DPA or closing costs

• Check approved realtors

• Learn more on the program here

2. Homes for Texas Heroes by the TSAHC: top option for those in serving-community professions

The Texas State Affordable Housing Corporation (TSAHC), a nonprofit organization with a mission to make housing more budget-friendly for folks in the Jumbo State. TSAHC offers a dynamic combo teaming up with developers and banks to help make living in Texas more within reach for all.

Here's the really cool part: TSAHC has a special program called "Home for Texas Heroes." This program provides a helping hand to some of our everyday heroes—like educators working in public schools, police and security officers, firefighters and EMS personnel, veterans and active-duty military, those working in corrections and juvenile corrections, and even nursing and allied health faculty. If you're one of these incredible heroes and dreaming of a home in Texas, TSAHC can provide assistance on your path to homeownership.

Eligible locations: 📍📍📍📍📍

Program requirements:  💼💼💼

Assistance payouts: 💰💰💰💰

Dwelling’s ranking: ⭐️⭐️⭐️⭐️

• Program Name: Homes for Texas Heroes

• Income Limits: $71,280-$163,520 depending on the county and mortgage type

• Eligible Locations: Across the State of Texas

• Credit Requirements: Minimum credit score of 620

• Mortgage Type (FHA, VA, conventional): FHA Loans, VA or USDA-RHS Loans

• Other Considerations (singles vs couples etc): For married couples, each spouse is treated as holding an ownership interest, even if not listed on the deed of trust. 

For a person who is not a spouse (for example, a parent of a mortgagor) who is a co-signer under, or a guarantor of, a promissory note secured by the mortgage, but who does not occupy the property and has no present ownership interest in the residence, is not required to satisfy the first-time home buyer requirement. 

• Assistance Type (Grant, Forgivable Loan, Deferred, 2nd Mortgage): Grant or a Deferred forgivable second lien loan.

• Check approved realtors and mortgage brokers

• Learn more about the program here or take their eligibility quiz

3. SETH 5 Star program by SETH: best for low- and middle-income buyers in Southeast Texas 

Southeast Texas Housing (SETH) is set out to help low- and middle-income future Texas residents afford a sweet place to call home. In the more than 40 years they've been around, SETH has helped over 30,000 Texas homebuyers. They've handed out a whopping $160 million to cover those tricky down payments and those sometimes overlooked closing costs. 

Eligible locations: 📍📍📍

Program requirements:  💼💼💼💼

Assistance payouts: 💰💰💰💰

Dwelling’s ranking: ⭐️⭐️⭐️

• Program Name: SETH 5 Star program

• Income Limits: $45,040-170,800 depending on the county and loan type

• Eligible Locations: Texas, excluding Travis County and the city limits of El Paso, McKinney, and Grand Prairie

• Credit Requirements: Minimum FICO Score of 640

• Mortgage Type (FHA, VA, conventional): Fixed-rate FHA, VA, USDA, and conventional mortgage products

• Assistance Type (Grant, Forgivable Loan, Deferred, 2nd Mortgage): Grants, 3-year Community Second Loan which is completely forgiven after 3 years, a 30-year fixed rate FHA, VA, USDA, and conventional mortgage loan

• Learn more about the program here

4. Home Sweet Texas by the TSAHC: for enthusiastic first-time homebuyers with limited income

TSAHC has another fantastic program up its sleeve, and guess what? It's not just for our heroes this time. Home Sweet Texas is the key to making your Texan dreams come true. They offer home loans and down payment help to low and moderate-income individuals, helping you turn your dream of calling Texas home into a reality that much quicker.  

Eligible locations: 📍📍📍📍📍

Program requirements:  💼💼💼💼

Assistance payouts: 💰💰💰💰

Dwelling’s ranking: ⭐️⭐️⭐️⭐️

• Program Name: Home Sweet Texas

• Income Limits: $71,280-$163,520 depending on the county and mortgage type 

• Eligible Locations: Across the State of Texas

• Credit Requirements: Minimum credit score of 620

• Mortgage Type (FHA, VA, conventional): FHA Loans, VA or USDA-RHS Loans

• Other Considerations (singles vs couples etc): For married couples, both spouses are considered as holding an ownership interest, even if one of them isn't officially listed on the home's documents. However, for someone who isn't a spouse (like a parent co-signing or guaranteeing a loan) and doesn't live in the home or own it, they don't need to meet the first-time homebuyer requirement.

• Assistance Type (Grant, Forgivable Loan, Deferred, 2nd Mortgage): Grant or a Deferred forgivable second lien loan.

• Check approved realtors and mortgage brokers

• Learn more about the program here or take their eligibility quiz

5. The Hill Country Home program by Travis County Assistance: perfect for those looking for a place in Austin

If you're gearing up for a move to the Live Music Capital of the World, Austin, then the Travis County Assistance program could be a great fit. Here's the scoop: it's not just for first-time buyers. If you're buying a home, you've got to make it your main residency within 60 days after closing. 

This program is for those buying, not refinancing. The program can also be used with other assistance programs, like MCCs, but not with other first mortgage products.

Eligible locations: 📍📍

Program requirements:  💼💼💼💼

Assistance payouts: 💰💰💰💰

Dwelling’s ranking: ⭐️⭐️⭐️  

• Program Name: The Hill Country Home

• Income Limits: Maximum qualifying income may not exceed 140% of area median income, which is $138,460 currently

• Eligible Locations: Anywhere in Travis County, including in the City of Austin

• Maximum home purchase price limit:  $350,871

• Credit Requirements: Minimum 640 FICO credit score

• Mortgage Type (FHA, VA, conventional):  FHA, VA, USDA-RD or Freddie Mac HFA Advantage 30-year fixed-rate mortgages

• Assistance Type (Grant, Forgivable Loan, Deferred, 2nd Mortgage): Forgivable 2nd Mortgage Load

• Learn more about the program here 

6. Houston Homebuyer Assistance Program (HAP): for those looking to call Space City their home

The Houston Homebuyer Assistance Program helps you with down payment assistance, and you could get up to $30,000 in support. The great part is, after five years, these loans can be forgiven as long as you stick around in your lovely new home and don't sell, refinance, or move out during that time. 

This program helps make things easy, brought to you by the City of Houston, and it's perfect for first-time homebuyers within the city limits. Plus, there's no need to stress about a maximum purchase price—there isn’t one. Just keep in mind, there's an income limit of 80% of the area median income and a $350 minimum contribution by the borrower. 

If you've got your sights set on your very first Houston home, this program is an open door to a fantastic opportunity. 

Eligible locations: 📍📍📍

Program requirements:  💼💼💼💼💼

Assistance payouts: 💰💰💰💰

Dwelling’s ranking: ⭐️⭐️⭐️⭐️

• Program Name: Homebuyer Assistance Program

• Income Limits: 80% of the Area Median Income

• Eligible Locations: Within the City of Houston

• Credit Requirements: None

• Mortgage Type (FHA, VA, conventional):  Conventional, FHA

• Assistance Type (Grant, Forgivable Loan, Deferred, 2nd Mortgage): Forgivable loan

• Learn more about the program here 

Ready to buy a home in Houston? Check out the down payment assistance you can get with Dwelling.

7. Dallas Homebuyer Assistance Program (DHAP): great for finding your dream home in Big D

The City of Dallas has set out to make homeownership a reality for many Americans. The Dallas Homebuyer Assistance Program (DHAP) helps people with moderate or low incomes buy a home in Dallas. 

In areas with lower poverty rates (they call them High Opportunity Areas), you could get up to $60,000 in assistance, while in other areas, it's still a generous $50,000. Just remember, for a property to qualify it needs to be appraised at least as much as it's being sold for.

The City of Dallas also offers other programs. For example, the Targeted Occupations Homebuyer Assistance Program helps those in certain professions who have a direct impact on Dallas communities (educators, healthcare, protective services, etc.) achieve accessible housing. 

They also offer a program called the Anti-Displacement Homebuyer Assistance Program (DHAP 10) for long-time Dallas residents who have been living in the city for at least 10 years. 

Eligible locations: 📍📍

Program requirements:  💼💼💼💼

Assistance payouts: 💰💰💰💰💰

Dwelling’s ranking: ⭐️⭐️⭐️⭐️

• Program Name: Dallas Homebuyer Assistance Program

• Income Limits: Between $36,100 to $146,995 depending on Area Median Income (AMI) and household size. 

• Eligible Locations: Within the City of Dallas limits

• Maximum home purchase price limit: $318,000

• Mortgage Type (FHA, VA, conventional): Conventional, FHA, Portfolio, and VA loans

• Other Considerations (singles vs couples etc): Marriage certification must be provided. Borrower and co-borrower must successfully complete an 8-hour homebuyer education course from a 7 HUD-approved course provider within 12 months of the application for assistance. 

• Assistance Type (Grant, Forgivable Loan, Deferred, 2nd Mortgage): Second lien deferred forgivable loan

• Learn more about the program here

8. The HIP 80 program by the San Antonio Homeownership Incentive: a great choice for affordable housing in Alamo City

Although the San Antonio Homeownership Incentive program offers two options, we’ll focus on the HIP 80. Why? Because it’s the one that can lend you more money. 

With HIP 80 they can lend you anywhere from $1,000 to $30,000, and the best part is, it's a 0% interest loan with no payments required. You can use this cash for your down payment as needed by your lender and even for other home-buying costs. 

However, before you finish buying the house and close the deal at the title company, you'll need to put down at least $500 as earnest money. 

If you borrow between $1,000 and $15,000, the entire loan will be forgiven over 5 years, and if it's between $15,001 and $30,000, you get a 10-year forgiveness period. Just remember, there are some home purchase price limits, and your household income needs to be below certain limits set by the Department of Housing & Urban Development for the year. So, if you're looking to buy a home in San Antonio, HIP 80 can be a solid option to explore.

Eligible locations: 📍📍

Program requirements:  💼💼💼💼

Assistance payouts: 💰💰💰💰

Dwelling’s ranking: ⭐️⭐️⭐️⭐️

• Program Name: HIP 80

• Income Limits: For a one-person household $49,150, and it ranges up to an 8 persons household with an income limit of $92,700

• Eligible Locations: Within the City limits of San Antonio

• Credit Requirements: None

• Mortgage Type (FHA, VA, conventional): FHA 203B, FHA, VA, and a Conventional loan

• Assistance Type (Grant, Forgivable Loan, Deferred, 2nd Mortgage): Second forgivable loan, meaning that homebuyers must first have qualified for a first loan with a private lender

• Learn more about the program here 

There are many more DPA programs available in Texas, however, we consider these eight among the best thanks to their requirements, eligible locations, trustworthy organizations, and overall level of assistance.

How do I apply for down payment assistance?

Once you find the down payment assistance program that’s right for you, you’ll want to grab the bull by its horns. As you can imagine, many people will be applying for these programs, you’ll want to ensure that once you start the process you have your paperwork in order. 

The 9 steps for DPA in Texas 

1. Find the available program that fits your needs (you’ll have this figured out by the end of this read)

2. Ensure you meet the eligibility criteria by checking the program’s official site

3. Attend the homebuyer education course, if the program requires it

4. Contact your mortgage lender to get a detailed understanding of the mortgage application, and down payment assistance program process, requirements, and deadlines

5. Collect and gather all your documents: ensure you’re being thorough and organized when compiling these documents or you risk missing deadlines or missing out on approval because of incorrect paperwork

6. Submit your application with your documents: always double-check the information you’re providing is accurate and up-to-date!

7. For some assistance programs, you may need to wait for a review period, which may take some time (one to two months is the usual waiting period in Texas). Patience is your best friend here

8. Once you’re approved for the assistance program, ensure you continue following program guidelines, like using the assistance for an eligible property within the specified time

9. Close on your home! Get your keys and host your first housewarming with a mouthwatering Texan BBQ.

The good thing about DPA programs is that you don’t have to wait too long to know if you’ve been approved. According to Maria A. Soto, Loan Officer at EdgeHomeFinance:

“Waiting for DPA approval shouldn't take any longer than applying for any other type of mortgage. The approval for the first mortgage and for the DPA loan happen simultaneously, you can expect the whole process—from when you get under contract on a home until you close on it—to take about 30 days.” 

Ready to turn your Texas dream of homeownership into a home-sweet-home reality? 

There you have it! These programs are a fantastic opportunity to seize and make your home-buying process one with fewer headaches, and bootstrapping. Buying your first home is one of life’s biggest decisions, so why not make it a financially smart decision too? 

If you’d rather skip all the work attached to applying to down payment assistance programs, use Dwelling. Get matched with up to $30,000 in down payment assistance in Texas from federal, state, and non-profit programs, with no strings attached. Enter your income here to find out how much down payment assistance you can get without having to do all the boring, time-consuming paperwork other places ask you. That alone deserves a five-star rating on our part. 

Don’t keep it waiting—Texas is ready for you!

Buying a
home is closer than you think.