Updated · Mike Certo, NMLS #260555
Texas First-Time Home Buyer Guide
Texas first-time buyers have access to two strong statewide DPA programs (TSAHC and TDHCA) plus a long list of city and county DPA programs. Combined with no state income tax and relatively stable property pricing, Texas can be one of the more workable FTHB markets in the US.
First-time buyer loan types in Texas
- FHA: 3.5% down, 580+ FICO published (620+ practical lender overlay). Pairs with TSAHC and TDHCA programs.
- Conventional 97: 3% down, 620+ FICO. Pairs with TSAHC and TDHCA conventional paths.
- VA: Zero down for eligible veterans. Texas has one of the largest veteran populations — Joint Base San Antonio, Fort Cavazos (formerly Fort Hood), Naval Air Station Corpus Christi, and dozens of additional bases.
- USDA: Zero down for USDA-eligible Texas areas. The eligibility map covers much of Texas outside the major metros.
TSAHC programs (Texas State Affordable Housing Corporation)
- Homes for Texas Heroes: For eligible professions — teachers, school employees, firefighters/EMS, police, corrections officers, veterans, and others. Down payment grant (3-5% of loan amount) that does NOT require repayment. Income limits by county.
- Home Sweet Texas: Statewide assistance for any qualifying buyer (not profession-restricted). Down payment grant (3-5% of loan amount) that does NOT require repayment. Income limits by county.
TDHCA programs (Texas Department of Housing and Community Affairs)
- My First Texas Home: For first-time buyers. Below-market rate pairing with DPA second mortgage. Income and purchase-price limits.
- My Choice Texas Home: For repeat buyers (not first-time-buyer restricted). Similar DPA structure.
- Texas Mortgage Credit Certificate (MCC): Federal tax credit converting portion of mortgage interest into annual federal tax credit. Layers carefully — federal tax credit, not cash assistance.
Major Texas city and county DPA programs
- City of Houston HOAP (Homebuyer Assistance Program)
- City of Dallas DPA
- City of Austin DPA
- City of San Antonio HHSD DPA
- City of Fort Worth Homebuyer Assistance Program
- City of El Paso DPA
- Harris County DPA
- Dallas County DPA
- Bexar County DPA
One assistance program per transaction
Texas DPA programs do not combine with each other. TSAHC Homes for Texas Heroes does not combine with TDHCA My First Texas Home. City of Houston DPA does not combine with TSAHC. You select ONE assistance program per home purchase.
The exception: the Texas MCC (federal tax credit) can sometimes layer with a DPA program — TDHCA offers it stand-alone, while TSAHC's is bundle-only with its DPA (free for Heroes buyers) — because it's a tax credit rather than cash assistance.
Texas-specific considerations
- No state income tax: Texas has no state income tax. This affects DTI calculation slightly — federal-only income tax leaves more net income for housing.
- Higher property tax: Texas property tax rates are among the highest in the US (1.5-3%+ effective rate). This significantly impacts monthly housing payment and DTI.
- Property tax escrow first-year shock: First-year property tax escrow estimate may use prior owner's assessed value. After your first full year, tax escrow adjusts to your assessed value — often higher.
- Texas Home Equity Constitution Section 50(a)(6): Texas has unique constitutional rules around cash-out and home-equity loans. See our Texas 50(a)(6) guide.
Next step
20-minute call. Bring county, household income, FICO ballpark, FTHB status, profession (for Homes for Texas Heroes check). We map your top 2-3 Texas program fits.
Related
FAQ
How much down payment do first-time buyers need in Texas?
As little as 3% on conventional or 3.5% on FHA, and $0 down on VA or USDA for eligible buyers; TDHCA or TSAHC assistance can cover much of it.
What credit score do you need for Texas down payment assistance?
TDHCA generally requires a 620 minimum credit score; a 680 or higher score can broaden program options (pricing is always quoted per file); it earns better first-mortgage pricing.
Who qualifies for TSAHC "Homes for Texas Heroes"?
Teachers, school employees, firefighters, EMS, police, corrections officers, veterans, and other eligible professions. Profession verification required at application.
Can I combine TSAHC with City of Houston DPA?
No. You select one DPA program per transaction. Most Texas DPA programs don't combine with each other.
Is TSAHC a grant or a loan?
It can be either — your choice at application: a true grant (never repaid) or a 3-year forgivable second lien, which is forgiven after 3 years in the home and repaid only if you sell or refinance inside that window. TDHCA's assistance is a 0%-interest deferred forgivable second. We walk both structures before you pick. (TDHCA's second defers payment but is technically a loan.)
Does Texas have programs without income limits?
National programs like Chenoa Fund, Arrive Home, and Essex/NHF typically don't have income limits — useful for higher-income Texas buyers who exceed TSAHC/TDHCA caps.
How much are closing costs in Texas?
Plan on 2-6% of the purchase price — roughly $7,000-$20,000 on the ~$340,000 Texas median. The good news unique to Texas: there's no transfer tax at all, and owner's title policy premiums are set by the Texas Department of Insurance, so title pricing is identical everywhere. We itemize every fee on your Loan Estimate.
Does Texas have a real estate transfer tax?
No — Texas is one of about a dozen states with zero state or local transfer tax, which saves thousands versus states like California, New York, or Florida. Your closing costs are loan fees, prepaids, escrow, and title — nothing paid just to record the transfer.
What is the FHA loan limit in Texas for 2026?
The FHA floor of $541,287 applies in most Texas counties, with several metro counties running higher — the exact county figure comes from HUD's lookup, and we confirm it for your target county at pre-approval. Note FHA limits sit well below the $832,750 conforming limit, so buyers in between use conventional financing.