Down Payment Assistance Programs to Help You Buy a Home in Texas (2026)

What down payment assistance programs can help me buy a home in Texas in 2026?

If saving for a down payment feels daunting, you’re not alone. Home prices and interest rates have risen, but Texas offers a range of down payment assistance (DPA) programs that can reduce or even eliminate the cash you need up front. These programs—including grants, forgivable loans and second‑lien loans—offer as much as 5 percent of the purchase price toward your down payment and closing costs. Eligibility depends on your credit score, income and whether you’re buying in a targeted area. Exploring these options now could make 2026 the right year to become a homeowner.

How down payment assistance works

DPA programs help qualified buyers cover part or all of their down payment and sometimes their closing costs. They’re typically offered through:

• State or local housing agencies – such as the Texas State Affordable Housing Corporation (TSAHC) and Texas Department of Housing and Community Affairs (TDHCA).
• Approved mortgage lenders – lenders partner with housing agencies to offer DPA with their loans.
• Employers, credit unions or community organizations – provide grants or matching funds for employees or members.

Assistance usually takes three forms:

1. Grants – Money you never repay; ideal if you meet strict credit and income criteria.
2. Forgivable second liens – Loans that are forgiven after a set number of years as long as you live in the home; forgiveness periods often range from 3–10 years.
3. Deferred‑payment loans – Second liens with no payments due until you sell, refinance or pay off your mortgage.

Key programs for Texas buyers

1. Texas State Affordable Housing Corporation (TSAHC)

TSAHC’s Homes for Texas Heroes and Home Sweet Texas programs offer 30‑year fixed‑rate mortgages with optional grants or second‑lien loans up to 5 percent of the loan amount. Buyers must meet income limits and have a minimum credit score of 620. Some participants also qualify for a Mortgage Credit Certificate (MCC) that reduces federal income tax liability.

2. Texas Department of Housing and Community Affairs (TDHCA)

TDHCA’s My First Texas Home and My Choice Texas Home programs provide down payment and closing cost assistance for first‑time buyers and some repeat buyers. Assistance is typically up to 5 percent of the loan amount. TDHCA loans require a minimum credit score of 620, and income and purchase price limits apply. TDHCA also administers the Home Sweet Texas Loan Program for certain professions and low‑income households.

3. Local and employer‑sponsored programs

Some Texas cities, counties and employers offer their own DPA options. Examples include:

• City of Houston Homebuyer Assistance Program – Provides up to $30,000 for down payment and closing costs on qualified homes within city limits. Buyers must complete a homebuyer education course and meet income guidelines.
• Employer‑Assisted Housing – School districts, hospitals and large employers sometimes offer grants or forgivable loans to help employees purchase homes near their workplace.
• Non‑profit and credit union programs – Community development organizations and credit unions may provide matching funds or low‑interest loans.

Who qualifies?

While requirements vary by program, typical guidelines include:

• Credit score – Most programs require a minimum score of 620; some may accept lower scores for FHA loans with additional down payment.
• Income limits – Assistance is usually limited to households earning no more than 80%–115% of the area median income (AMI). Income limits differ by county and household size.
• First‑time buyer status – Many programs define a first‑time buyer as someone who hasn’t owned a home in three years. Some programs allow repeat buyers.
• Purchase price caps – Homes must fall below certain price limits (often $350,000–$400,000 in the Houston area).
• Homebuyer education – Completing an approved education course is often mandatory.

Benefits of exploring DPA in 2026

• Balanced market conditions – Inventory levels in 2026 are expected to remain moderate, giving buyers more time to shop and evaluate DPA options.
• Opportunity to combine incentives – Some buyers can pair state programs with builder credits, employer grants or mortgage credit certificates to reduce out‑of‑pocket costs.

FAQs

Do I have to repay down payment assistance?
It depends on the program. Grants never require repayment. Forgivable second liens are forgiven after you occupy the home for a specified number of years. Deferred‑payment loans must be repaid when you sell, refinance or pay off your first mortgage.

Can I use down payment assistance with any mortgage?
DPA programs are typically paired with FHA, conventional, VA or USDA loans through participating lenders. Work with a loan officer who is approved to offer the specific program you’re considering.

Will DPA affect my interest rate?
Some programs include slightly higher interest rates to cover the cost of the assistance. Compare loan offers carefully; even with a marginally higher rate, the up‑front assistance may reduce your overall cash outlay.

How long does the process take?
Applying for DPA adds a few days to the loan process, especially if you need to complete a homebuyer education course. Start early and provide all required documentation to avoid delays.