Texas First-Time Home Buyer Grants

"First-time home buyer grant" is one of the most-searched phrases in Texas real estate - and one of the most misunderstood. Most so-called grants are actually down payment assistance (DPA): forgivable second liens, zero-interest deferred loans, or three-year forgivable advances. A handful are true grants that never have to be repaid. This guide breaks down every option Texas buyers should know in 2026.

Who counts as a "first-time buyer" in Texas?

For most Texas programs, "first-time buyer" means you have not owned a primary residence in the last three years. Veterans and buyers purchasing in federally designated "targeted areas" are typically exempt from the first-time rule entirely - which is one of the most-overlooked stacking opportunities on the list below.

TSAHC - Texas State Affordable Housing Corporation

TSAHC runs two flagship programs: Homes for Texas Heroes (teachers, police, fire, EMS, corrections, veterans, nurses) and Home Sweet Texas (any Texas buyer under income limits). Both deliver a 30-year fixed mortgage paired with DPA delivered as either a grant or a deferred second lien.

• Amount: typically up to 5% of the loan, applied to down payment and closing costs (exact percentage varies by current rate sheet).
• Repayment: grant option = never repaid; second-lien option = 0% interest, forgiven if you stay in the home for the program's required holding period (commonly 3 years) and repaid only if you sell or refinance earlier.
• Income limit: varies by county and household size - check the official TSAHC lookup before applying.
• First-time rule: waived for veterans and targeted-area buyers.
• Stackable with MCC: yes - TSAHC issues its own MCC.
• Last reviewed: June 2026. Confirm current terms at tsahc.org.

TDHCA - My First Texas Home & My Choice Texas Home

TDHCA is the state housing agency. Its My First Texas Home program offers DPA tied to a 30-year fixed FHA, VA, USDA, or conventional loan. The non-first-time-buyer version is My Choice Texas Home (similar DPA range, slightly higher income limits, no first-time restriction).

• Amount: tiered (commonly 2%-5%) - exact options depend on the current rate sheet.
• Repayment: typically a forgivable or repayable second lien depending on the tier selected.
• Income limit: varies by county and household size - check the official TDHCA lookup.
• Pairs with: TDHCA's Texas Mortgage Credit Certificate (MCC) for an annual federal tax credit (capped at $2,000/yr per IRS rules).
• Last reviewed: June 2026. Confirm current terms at welcomehome.tdhca.texas.gov.

Mortgage Credit Certificate (MCC) - the silent winner

An MCC is not a grant - it's a federal tax credit you claim every year you live in the home. It can be worth $1,500–$2,000 per year in reduced federal tax, and it doesn't reduce your closing costs (so it stacks cleanly on top of any DPA grant). Both TSAHC and TDHCA issue MCCs to qualifying first-time buyers and veterans.

See our MCC calculator to estimate the lifetime value for your loan size and tax bracket.

Local city & county grants

Many Texas cities and counties run their own DPA on top of the state programs. Common examples:

• Houston HOAP: up to $30,000 forgivable for buyers under 80% AMI inside city limits.
• Dallas Homebuyer Assistance Program (DHAP): up to $50,000 for income-qualified Dallas city buyers; up to $60,000 in designated High Opportunity Areas, subject to eligibility and funding availability.
• San Antonio HAP/HIP: up to ~$20,000-$30,000 depending on program tier and area.
• Austin DAP: up to $40,000 deferred for buyers under MFI limits.
• Fort Worth HAP: up to $25,000 forgivable, layered with TSAHC or TDHCA.
• El Paso, Plano, Arlington, Corpus Christi, Lubbock: several run active DPA programs - amounts and funding status change throughout the year.
• Last reviewed: June 2026. City DPA amounts and funding cycles change frequently; always confirm with the city's housing department.

Local programs frequently run out of funding mid-year - track open/closed status in our DPA Funding Status guide.

Federal options every first-time buyer should know

• FHA loan: 3.5% down, 580+ credit, accepts most DPA as the down payment source.
• VA loan: 0% down for eligible veterans and active duty - almost always beats the alternatives.
• USDA loan: 0% down in rural Texas (over half the state map qualifies).
• Conventional 97 / HomeReady / Home Possible: 3% down with reduced PMI for income-qualified buyers.

How to stack grants legally

Stacking is allowed, but it has rules. The most common winning stack for a Texas first-time buyer looks like this:

1. Choose an FHA, VA, or Conventional 97 loan as the base.
2. Layer state DPA (TSAHC or TDHCA - not both at once on the same loan).
3. Layer a local city/county grant where eligible (Houston, Dallas, San Antonio, etc.).
4. Add an MCC for ongoing federal tax credits.
5. Negotiate seller-paid closing concessions on top (FHA caps at 6%, conv ≤10%, VA ≤4%).

Run a real stack with your numbers in the Stack Simulator, or take the 3-minute eligibility quiz to see which combinations may fit your county and income.

What disqualifies most first-time buyers

• Owning rental property in the last 3 years (counts as ownership even if you never lived there).
• Income above the county limit - even by $1 disqualifies the entire grant.
• Buying outside the program's eligible area (some local grants are city-limit only).
• Failing to complete a HUD-approved homebuyer education course (required by most DPA).

Next step

Every Texas county has a different mix of state, local, and lender-paid options. The fastest way to see what may fit you is the free eligibility quiz - no credit pull, no email required.