So you’ve been doing the math. Your rent is $1,800. A starter house in your area is $300,000. The lender wants 3 to 5 percent down, which is $9,000 to $15,000. Plus closing costs. Plus an inspection. Plus reserves. And you’ve got, what, $4,000 saved up after the last car repair?

Yeah. This is where most first-time buyers in Texas just stop. They assume they need to save another 2 or 3 years and put the whole thing on hold.

Here’s what nobody really tells you. Texas has more first-time buyer assistance programs than almost any other state in the country. You can stack a down payment grant on top of a low-rate mortgage on top of a tax credit. People are walking out of closings with the bank cutting them a check (yes, really, that happens). And most of these programs are for people making $80,000 to $100,000 a year. Not super-low-income. Just regular Texans.

The catch is that the programs are scattered across state, city, county, and federal agencies. Nobody puts them in one place. Nobody walks you through which ones combine. So most buyers either don’t know they exist or pick the wrong one.

Let me walk through what’s actually out there in 2026 and how to use it.

First, What Counts as a “First-Time Buyer” in Texas?

This trips up so many people. You don’t actually have to be brand new to homeownership.

In Texas, you qualify as a first-time buyer if you haven’t owned a home as your primary residence in the last 3 years. So if you owned a condo back in 2019 but you’ve been renting since 2022, congrats. You’re a first-time buyer again in the eyes of these programs.

Veterans get an even bigger break. Most Texas programs waive the 3-year rule entirely for vets.

There’s also “targeted areas” — certain census tracts where the rules are looser to encourage buyers to invest there. You might still qualify in those areas even if you recently owned a home.

Before you assume you don’t qualify, please check. A lot of people leave money on the table because they think “first-time” means they’ve literally never bought before.

The Two Big State Programs

Texas has two state-level agencies running first-time buyer programs. They’re separate. They’re sometimes confused with each other. Both are worth knowing about.

TDHCA (Texas Department of Housing and Community Affairs)

Their flagship program is My First Texas Home. This gives you a 30-year fixed-rate mortgage, plus down payment and closing-cost assistance up to 5 percent of the loan amount.

The assistance comes as either a grant (you keep it forever) or a deferred forgivable second lien (you only pay it back if you sell or refinance within 3 years). Most people choose the grant version unless they expect to move soon.

Income limits depend on where you live and how big your household is, but they’re surprisingly high. We’re talking $80,000 to $130,000+ in many counties. Many buyers who assume they “make too much” actually qualify.

TDHCA also has the Texas Mortgage Credit Certificate (MCC). This is a tax credit, not a deduction. Big difference. You get up to 15 percent of your annual mortgage interest back as a federal tax credit, every year, for as long as you have the loan. On a $300,000 mortgage, that can be $1,500 to $2,000 a year, year after year. People often skip this one because tax topics can sound boring, but it’s basically free money.

TSAHC (Texas State Affordable Housing Corporation)

TSAHC runs Homes for Texas Heroes and Home Sweet Texas Home.

Heroes is for teachers, nurses, firefighters, EMTs, police, corrections officers, veterans, and a few other public service categories. You get a 30-year fixed-rate mortgage plus down payment assistance worth up to 5% of the loan amount. Same general structure as TDHCA, but with the bonus of not having to be a “first-time” buyer. Just a hero.

Home Sweet Texas Home is the regular one. Open to anyone meeting income limits. Same structure, similar assistance.

Here’s the part most articles miss. TDHCA and TSAHC are separate entities, and you can choose whichever offers better terms for your situation. Different lender networks, different turnaround times, different interest rates each month. A good loan officer will run both for you and tell you which one comes out on top this week.

The Bigger Weapons: Federal Loan Programs

These aren’t Texas-specific, but they pair beautifully with Texas down payment assistance.

FHA loans require just 3.5% down and credit scores as low as 580 (or 500 with 10% down). The lower bar makes FHA the workhorse of first-time buying. You’ll pay mortgage insurance for the life of the loan in most cases, but it’s the easiest path in.

VA loans are zero-down, no PMI, lower interest rates, and looser credit standards. If you’re active military, a vet, or a surviving spouse, this is almost always the right move. Pair it with TSAHC’s Heroes program, and you’re getting a zero-down loan with extra help with closing costs on top.

USDA loans are also zero-down, but only for properties in rural-designated areas. You’d be surprised how many Texas towns count as USDA rural — places like Cleburne, Granbury, Athens, parts of Conroe, and large stretches of east and central Texas. Please check the USDA eligibility map before assuming your town doesn’t qualify.

Conventional 97 loans require just 3% down and are open to first-time buyers with strong credit. PMI drops off once you hit 20% equity, unlike FHA. Usually, the cheaper long-term option for buyers with good credit.

The Big City and County Programs

This is where it gets interesting. The state programs are great. The city and county programs are where the bigger money is hiding.

Dallas Homebuyer Assistance Program — up to $50,000 in some cases for buyers within Dallas city limits, depending on income tier. It’s a forgivable loan that goes away if you stay in the home long enough.

Austin Down Payment Assistance Program — up to $40,000 for low-income first-time buyers in Austin. Forgivable over time.

Houston Homebuyer Assistance Program — typically $30,000 to $50,000 for buyers in the Houston city limits.

Harris County Down Payment Assistance — for buyers in Harris County but outside Houston city limits, up to $23,800.

Tarrant County Homebuyer Assistance — up to $25,000 for buyers in unincorporated Tarrant County.

City of Fort Worth Homebuyer Assistance — up to $20,000 for first-time buyers within Fort Worth.

SETH 5 Star Texas Advantage — Southeast Texas Housing Finance Corporation grant program covering down payment and closing costs. This one’s a true grant. You don’t pay it back.

Homeownership Across Texas (HAT) — provides a 5% grant on VA, FHA, or USDA-financed loans.

City of Irving — up to $50,000 for income-eligible buyers within city limits.

City of Laredo — up to $30,000 for first-time buyers within Laredo.

There are similar programs in San Antonio, El Paso, Corpus Christi, Killeen, McKinney, Plano, Arlington, and dozens of other Texas cities. If you’re buying in a specific city, just Google “[your city] first-time home buyer assistance” and you’ll usually find something.

Stacking Programs (The Part Nobody Explains)

Here’s where it gets fun, and most articles drop the ball.

You can often combine multiple programs to layer the help. Not every program stacks with every other one, but a lot do. A few real-world combos that work in Texas in 2026:

Combo 1: FHA loan + TDHCA My First Texas Home (5% down payment grant) + Dallas city assistance ($30K). On a $300K house, you might walk in with under $2,000 of your own money, and Dallas covers chunks of your closing costs, too.

Combo 2: VA loan + TSAHC Homes for Texas Heroes + a city-level grant if available. Zero down, plus extra closing cost help, plus city money. Veterans buying in Texas are doing this all day long.

Combo 3: Conventional 97 (3% down) + TSAHC down payment assistance + MCC tax credit. Lower long-term cost because conventional mortgages eventually drop PMI, plus you get the tax credit forever.

The stacking rules are program-specific and change. Sometimes the income limits are different. Sometimes one program counts the other as a “subsidy” and rejects it. This is exactly why working with a lender who specializes in DPA is worth way more than chasing the lowest rate. A regular loan officer will hand you one program and call it a day. A specialist will run all your eligibility and stack what works.

If this is sounding like a lot, it is. Which is why so many first-time buyers benefit from a free home buyer class where someone walks you through this stuff in person and you can actually ask questions.

What Disqualifies People (Real Talk)

Most articles will tell you who qualifies. Few tell you who doesn’t, and these are the things that actually trip people up.

Income too high. Most Texas DPA programs have limits between $80,000 and $130,000, depending on the county and household size. If you and your partner together make $180,000, you’re not getting most of these. Some MCC programs have higher limits. Some county programs do too. But the bulk of state assistance is targeted at moderate-income buyers.

Credit score too low. Most programs require a minimum of 620 to 640. FHA goes lower. If you’re at 580, you can still buy with FHA, but most DPA programs won’t stack on top.

Not buying as a primary residence. All assistance programs require owner-occupancy. You have to live in it, usually for at least 3 years. Investors, no. House-hackers buying a duplex and living in one side, yes.

You owned a home in the last 3 years, and you’re not a vet, and you’re not buying in a targeted area. You’re out for the “first-time” programs. You can still use FHA, VA (if eligible), or USDA, but the down payment grants are gone.

Trying to close in under 30 days. DPA programs add paperwork and processing time. Plan on 45 to 60 days from contract to close. If a seller wants a 21-day close, you’ll have a hard time using these programs.

Buying above the program loan limits. Each program has a max purchase price (often around $400,000 to $500,000 in Texas, which varies by county). A $700,000 house won’t qualify.

If any of these is you, don’t panic. There’s almost always a path. Just one difference from what you assumed.

What the Process Actually Looks Like

Step-by-step: what to actually do.

Step 1. Pull your credit report. Free at annualcreditreport.com. Look at your scores from all three bureaus. You’ll typically need at least 620, ideally 640+, to access most assistance programs. If you’re below, work on it for 6 months before you start serious shopping.

Step 2. Figure out what you can actually afford. Not what a lender will approve you for (they’ll go higher than you should). The classic rule is that your housing payment shouldn’t exceed 28% of your gross monthly income. Please add taxes, insurance, and HOA, and determine the actual number.

Step 3. Get pre-approved with a lender who specializes in down payment assistance. This is the part most people skip. Big national lenders often steer you to whatever’s most profitable for them, not what’s best for you. A local lender who knows Texas DPA programs inside out will find you money that the others miss.

Step 4. Take a homebuyer education class. Most assistance programs require it. They want proof you understand what you’re signing up for. The good news is that the class is free and usually lasts about an hour. You’ll learn things you didn’t know you didn’t know.

Step 5. Get a real estate agent. Find someone who’s worked with first-time buyers and understands DPA programs. Some agents avoid DPA buyers because the deals take longer to close and have more paperwork. The good ones embrace it because they care about getting you into a house.

Step 6. Shop for a house that fits the program parameters. Loan limits, neighborhood eligibility, and condition requirements (FHA appraisals are stricter than conventional, for example).

Step 7. Make an offer. Lock your rate. Order inspections. Submit DPA paperwork.

Step 8. Close. Move in. Cry happy tears. Realize you’re now responsible for the AC unit when it dies.

The whole thing from “I’m thinking about buying” to closing usually takes 4 to 8 months for first-time buyers. Sometimes longer if you’re working on credit or savings. Don’t let that scare you. It’s totally normal.

Common Mistakes (Don’t Do These)

A few things I see first-time buyers do repeatedly that cost them money.

Skipping the homebuyer education. It’s required for most programs, and it actually teaches you things. People are treating it as a chore and missing the point.

Falling in love with a house before pre-approval. You’ll either get crushed when it’s out of your budget, or you’ll panic-buy something you can’t actually afford. Pre-approval first. Always.

Assuming you don’t qualify. Income limits are higher than people think. Credit requirements are more flexible than people think. You don’t lose anything by checking. Just go through the eligibility test for two or three programs and see.

Go with the first lender you call. Mortgage lenders are not all the same. Especially for DPA. The difference between a mediocre and a great loan officer is thousands of dollars over the life of the loan.

Trying to do it solo. You don’t get a discount for figuring it out yourself. Realtors are paid by the seller. Loan officers are paid by the bank. Homebuyer classes are free. Use the help.

Underestimating closing costs. Down payment isn’t the only cost. Closing costs in Texas typically run 2 to 4 percent of the home price. On a $300K house, that’s $6,000 to $12,000 on top of your down payment. Some DPA programs cover closing costs as well. Make sure yours does.

Buying before you have reserves. Even if a program covers your down payment and closing, you still need a few thousand in savings for moving, utility deposits, the inevitable repair you discover after closing, and a buffer for the first few months. A house with no reserves is one broken water heater away from disaster.

FAQ

How much do I need saved up to buy a first home in Texas?

With down payment assistance, you might need as little as $1,000 to $3,000 of your own money for things the programs don’t cover (inspection, appraisal, earnest money, moving). Without assistance, expect to need 3 to 5 percent of the home price for a down payment, plus another 2 to 4 percent for closing costs. On a $300K house, that’s $15,000 to $27,000 without programs. With programs, you can often get under $5,000 total.

Do I have to pay back the down payment assistance?

Depends on the program. Some are true grants (never paid back). Some are forgivable loans that disappear if you live in the house for 3 to 10 years. Some are deferred second liens that are repaid only when you sell or refinance. Always read the terms before signing. The differences matter a lot if you might move within a few years.

What’s the minimum credit score for first-time buyer programs in Texas?

Most state and city DPA programs require a score of 620 to 640. FHA loans alone go down to 580 with 3.5% down (or 500 with 10% down). VA and USDA loans don’t have hard minimums, but most lenders want 620+. If your score is below 620, focus on credit repair for 6 months before applying.

Can I use these programs if I owned a home before?

Yes, if you haven’t owned as a primary residence in the past 3 years. Yes, if you’re a veteran (most programs waive the rule). Yes, if you’re buying in a “targeted area.” Otherwise, no for the first-time buyer specific programs, but you can still use FHA, VA, or USDA loans.

What’s the difference between TDHCA and TSAHC?

Both are Texas state agencies that run first-time buyer programs. TDHCA is the official state housing department. TSAHC is a separate non-profit corporation. They run similar but separate programs with different lender networks and slightly different terms. A good loan officer will run both and pick whichever offers you better terms that month.

Are there income limits for these programs?

Almost all of them, yes. Limits vary by program, county, and household size, but most range from $80,000 to $130,000 for a household of 4. Some programs go higher. Some local programs have lower limits to target lower-income buyers. Don’t assume you make too much. Check the actual limit for the program and the county you’re looking at.

How long does the process take?

Plan on 4 to 8 months from “I want to buy” to closing. That breaks down roughly to: 1-2 months for pre-approval, education, and getting paperwork in order, 1-2 months for house hunting, 45-60 days for closing once you’re under contract. Programs that include DPA take longer than vanilla loans because of the extra paperwork.

Do I really need a homebuyer education class?

Most programs require it. Beyond that, yes, you really do. Buying a house is the biggest financial transaction most people make, and going in blind is how people end up with houses they can’t afford or contracts they don’t understand. The classes are free and short. There’s no good reason to skip.

Can I get help if I’m not low-income?

Yes. Most articles make it sound like DPA is only for very low-income buyers. Not true. The income limits in Texas often go up to $130,000+ for moderate-income programs, and the MCC tax credit has even higher limits. Run your actual numbers through the program eligibility tools before assuming you don’t qualify.

The biggest piece of advice

Don’t try to figure this out on your own with Google.

I know that’s not what you wanted to hear. But the difference between a buyer who works with knowledgeable people (a homebuyer class instructor, a DPA-savvy lender, a first-time-buyer-friendly agent) and a buyer who tries to wing it is usually $10,000 to $30,000 in the first year alone. That’s down payment money missed, tax credits left on the table, closing costs not negotiated, and rate locks done at the wrong time.

Free help exists. Use it. Get it before you start touring houses, not after.

Want help walking through this in plain English?

The How To Buy A House Class runs free, in-person classes for first-time buyers across Texas — Austin, Houston, Dallas, San Antonio, Fort Worth, and many other cities. The classes are about an hour long, taught by local Texas Realtors who actually work this market every day, and you can ask whatever questions you want without feeling dumb (because trust us, no question is dumb when you’ve never bought a house before).

We’ll walk you through the local programs that fit your situation, explain how to stack assistance, connect you with lenders who know DPA inside out, and give you a real plan to follow. No sales pitch. No high-pressure follow-up. Just real education.

Find a class near you on our Texas teachers page or check the full class schedule to see what’s coming up in your city. Can’t make it to a class? Download our free home-buying app and get the same education on demand.

If you’ve been on the fence about buying, the programs above are real, the help is real, and the process isn’t as scary as the internet makes it out to be. Take the next step.