Home Sweet Texas Home Loan Program (2026 Guide)

For a lot of Texas buyers, the down payment is the wall. You earn enough to handle a mortgage payment — your rent already proves it — but pulling together $30,000 or $50,000 in cash on top of moving costs, inspection fees, and closing costs feels like a different problem entirely. The Home Sweet Texas Home Loan Program exists to make that wall lower, and it’s broader than most buyers realize. Not just for first-time buyers. Not just for low-income buyers. The standard-tier income limit in Dallas County reaches approximately $146,625 at any household size, and the program pairs with every major loan type — FHA, VA, USDA, and conventional.

Up to 5% Down payment assistance (of loan amount) TSAHC

620 Minimum credit score (640 for HFA conventional) TSAHC

15% MCC federal tax-credit rate TSAHC / IRS §25

Up to ~$146,625 Income limit, Dallas County (non-targeted) TSAHC

Most Texas down payment programs operate under the same federal rules, which means most of them ask the same five questions: how much do you earn, what’s your credit score, are you a first-time buyer, what kind of loan are you using, and where are you buying? Home Sweet Texas runs on the most generous version of those rules among the major Texas programs — high income limits, no first-time requirement on the standard tier, all four loan types accepted. That’s why so many Texas buyers who counted themselves out actually qualify.

This guide walks through exactly how the program works: the three ways you can take the assistance, what the income and price limits look like in your county, how it pairs with your loan type, what the Mortgage Credit Certificate is worth, and the three conditions that have to all hit before the federal recapture tax could ever apply. Every load-bearing figure links to a primary source — the TSAHC Income & Purchase Price Limits PDF, the TSAHC DPA & MCC Guidelines, or the IRS for tax rules. You can verify everything yourself.

What Is the Home Sweet Texas Home Loan Program?

Home Sweet Texas is one of two homebuyer programs run by the Texas State Affordable Housing Corporation (TSAHC) — a self-sustaining nonprofit created by the Texas Legislature in 1994 to expand homeownership for moderate- and lower-income Texans. The sister program, Homes for Texas Heroes, is built specifically for teachers, first responders, veterans, and other public servants. Home Sweet Texas is the wide-open one — for most Texas buyers who meet the income limits, no special occupation required.

The program pairs a 30-year fixed-rate first mortgage with down payment help worth 2%, 3%, 4%, or 5% of your loan amount. Depending on how you set it up, that help may be money you never repay. Eligible buyers may also add a Mortgage Credit Certificate for federal tax savings that keep coming year after year. The program works with FHA, VA, USDA, or conventional loans (using Fannie Mae’s HFA Preferred or Freddie Mac’s HFA Advantage products).

One thing worth knowing up front: not every lender is approved to originate TSAHC loans. That’s part of why so many qualified Texas buyers have never heard of the program — their lender doesn’t offer it.

Three Myths That Keep Texas Buyers from Applying

This is where most Texas buyers get the help wrong before they ever apply.

Myth 1: “I’m not a first-time buyer, so I can’t qualify.” The reality: TSAHC’s standard down payment assistance does NOT require first-time status. Repeat buyers, current owners selling and rebuying, and anyone who’s been a Texas homeowner before may still qualify, per the TSAHC DPA & MCC Guidelines. The first-time requirement only attaches when you add a Mortgage Credit Certificate or use a TSAHC bond-funded structure — and even then, qualified veterans and buyers in HUD-targeted census tracts are exempt.

Myth 2: “I make too much money.” The reality: non-targeted income limits reach approximately $146,625 in Dallas, Collin, and Denton counties; $167,250 in Travis County; $133,375 in Tarrant County; $130,833 in Bexar County; and $126,375 in Harris County — all at any household size on the standard tier. A dual-income household earning $100K+ combined typically fits comfortably under these limits in every major Texas metro. Full county-by-county figures live in the TSAHC Income & Purchase Price Limits PDF.

Myth 3: “I need 20% down to buy a house.” The reality: paired with an FHA loan (3.5% minimum down), Home Sweet Texas’s 5% assistance may wipe out the down payment AND chip into closing costs. Paired with a VA or USDA loan (zero down for eligible buyers), the assistance goes toward closing costs and prepaids. The 20% number is what avoids private mortgage insurance — not what gets you into a home.

First-Time and Repeat Buyers — Yes, Both

If a lender or a friend once told you Texas DPA programs are “only for first-time buyers,” you may have been told wrong about this one. For its standard down payment assistance, TSAHC does NOT require first-time status. You may have owned a home before, you may own one right now, and you may still qualify for Home Sweet Texas.

The first-time rule only kicks in when you add a Mortgage Credit Certificate or use one of TSAHC’s bond-funded structures. Even then, the federal definition of “first-time homebuyer” — set by Fannie Mae, HUD, and the IRS in §143(d) — means someone who has not owned a primary residence in the last three years. So even within that requirement, buyers re-entering homeownership after a stretch of renting may still qualify.

The buyers who tend to find a pleasant surprise here: people relocating within Texas, growing families upsizing, divorcees buying again after a separation, and folks who simply assumed their income was too high.

Your Three Options: No DPA, a Grant, or a Forgivable Second Lien

Home Sweet Texas gives you three ways to take the program, and the right one depends on what you need and how long you plan to stay.

No DPA (0%) is for buyers who already have their down payment saved but still want the program’s mortgage and the option to add an MCC. Because you’re not taking assistance, this option carries the lowest interest rate of the three. Best fit: buyers with a planned down payment looking to combine a TSAHC first mortgage with the MCC tax credit.

The Grant (2-5% of loan amount) hands you cash that becomes money you never repay once you cross the six-month mark from closing. The grant is available only on FHA, VA, and USDA loans (not conventional). No monthly payment, no interest, no second lien on the property. Best fit: buyers who may move or refinance in a few years and don’t want a second-lien complication on the title.

The 3-Year Deferred Forgivable Second Lien (2-5% of loan amount) is the same dollar amount with 0% interest and no monthly payment. It’s a second lien on the property that gets fully forgiven at the three-year anniversary of the note — not pro-rated, per the TSAHC Deferred Forgivable 2nd Lien FAQ. Works with every loan type, including conventional. Best fit: buyers who plan to stay in the home at least three years and want the option of conventional financing.

Interest rates move often. Here are the current TSAHC program rates for all three options — think of these as a starting point for the conversation, not a quote:

How Much You May Receive

The assistance is figured as a percentage of your total loan amount, not the purchase price — that’s a common point of confusion. On a $300,000 loan amount, 5% is $15,000 working for you at the closing table. On a $400,000 loan amount, 5% is $20,000.

Worked example: a buyer purchasing a $325,000 home with an FHA loan and 3.5% down ($11,375) would carry a loan amount of approximately $313,625. At 5% Home Sweet Texas assistance, that’s $15,681 — enough to cover the FHA down payment AND most of the closing costs (which typically run 2-5% of the loan amount per CFPB closing disclosure guidance). The buyer brings far less cash to closing than the 3.5% number suggests. For many Texas buyers, that’s the difference between “someday” and “this year.”

Income Limits by County (2026)

This is the rule that surprises buyers the most. “Down payment assistance” makes a lot of people assume the income limits must be low. They’re not. Current Home Sweet Texas income limits in major Texas counties reach well into six figures, and these limits apply at any household size on the standard tier.

How the limit works: TSAHC’s standard above-80%-AMFI tier (which is what most buyers use) is a single “Any Family Size” limit per county — no household-size split. If the home you’re buying sits in a HUD-targeted census tract, the limit may be even higher. The figures below come straight from the TSAHC Combined Income & Purchase Price Limits PDF, effective for rate locks on or after May 28, 2025:

County / area	Non-targeted income limit (any household size)
Dallas / Collin / Denton	~$146,625
Tarrant	~$133,375
Travis	~$167,250
Harris	~$126,375
Bexar	~$130,833
El Paso	~$123,500

If your county isn’t listed, the TSAHC PDF carries the full statewide table. Verify the current figure for your county directly with TSAHC or a participating lender before applying — limits update periodically.

Purchase Price Limits

Purchase price limits are higher than many buyers expect. Home Sweet Texas publishes a separate maximum purchase price by county, with non-targeted and targeted-area tiers. These are real-world reachable for most Texas families — this isn’t a program built only for starter homes.

County / area	Non-targeted max purchase price
Dallas / Collin / Denton / Tarrant	~$585,006
Travis	~$593,363
Bexar	~$579,037
Harris / El Paso	~$544,232
Statewide non-targeted floor	~$544,232

Targeted-area limits run higher still — confirm the current figure for the property’s specific county with the TSAHC PDF or a participating lender before assuming a specific home qualifies.

How Home Sweet Texas Pairs With FHA, VA, USDA, and Conventional Loans

Home Sweet Texas isn’t a mortgage on its own — it’s help that rides on top of a first mortgage. The loan type you choose changes how far the assistance stretches.

With an FHA loan (3.5% minimum down per HUD Handbook 4000.1), 5% Home Sweet Texas assistance may completely cover the down payment AND chip into closing costs. Most buyers reach closing with very little cash out of pocket.

With a VA loan (zero down for eligible veterans, active-duty, and certain spouses per VA.gov), the assistance goes toward closing costs and prepaids. Texas veterans may also pair the Texas Veterans Land Board home loan for additional benefits.

With a USDA Rural Development loan (zero down in eligible rural areas), the assistance again goes toward closing costs. Check the USDA eligibility map to confirm whether the property qualifies — many Texas exurban areas do.

With a conventional loan, TSAHC uses Fannie Mae’s HFA Preferred or Freddie Mac’s HFA Advantage products. Both may include reduced mortgage insurance for eligible borrowers compared with a standard conventional loan at the same LTV.

One state program at a time. This article describes how a single TSAHC, TDHCA, or MCC program may apply to your purchase. ShopDPA does not market, package, or facilitate “DPA stacking” — combining multiple down-payment assistance programs into a layered structure on the same loan. Most Texas DPA programs have rules that prevent or restrict combining benefits. The licensed mortgage professional in our partner network will help identify which single state program fits your situation best.

The Mortgage Credit Certificate — Money Back Every Year You Own

If the down payment help is the headline of Home Sweet Texas, the Mortgage Credit Certificate (MCC) is the gift that keeps giving. An MCC is a federal income tax credit, not a deduction — and that distinction matters. A deduction reduces your taxable income; a credit cuts the tax you owe dollar for dollar. The TSAHC MCC is worth up to 15% of the mortgage interest you pay each year, for as long as the home is your primary residence.

Because the TSAHC MCC is rated at 15%, the old $2,000 annual cap that applies to certificates rated above 20% does NOT apply here, per the TSAHC MCC FAQ. Your benefit in any year is limited instead by the federal tax you actually owe. The credit is non-refundable, so it can take your federal tax bill to zero but won’t pay you cash beyond that, and unused credit may generally carry forward up to three years per IRS Form 8396 instructions.

That’s potentially tens of thousands of dollars staying in your pocket over the life of the loan, and some lenders may even count projected MCC savings as extra qualifying income, which may help your debt-to-income ratio. Two rules to know: since November 1, 2023, the TSAHC MCC is no longer offered on its own and must be combined with TSAHC down payment assistance (per the TSAHC MCC FAQ); and it’s generally limited to first-time buyers, with the standard exceptions for qualified veterans and HUD-targeted census tracts. One more savings note for public servants: the $400 MCC issuance fee is waived for buyers who qualify under Homes for Texas Heroes.

Credit Requirements

TSAHC sets a minimum representative credit score of 620 for FHA, VA, and USDA loans, and 640 for the HFA Preferred and HFA Advantage conventional options. The 640 minimum also applies to manufactured homes on any loan type. Scores in the 620-639 range may carry a small 0.25% origination charge per the TSAHC DPA & MCC Guidelines.

It helps to remember that “minimum credit score” is a floor, not a finish line. Hitting 620 or 640 makes you eligible to be considered; your full file — income, debts, employment, and assets — still has to be approved. If your score is sitting just under the line, don’t give up: a licensed mortgage professional in our partner network can often point to one or two specific moves (paying down a credit card balance, disputing a single reporting error, becoming an authorized user on a family member’s account) that may lift you over the threshold in 30-60 days.

Homebuyer Education — What’s Required

Home Sweet Texas requires at least one borrower on the loan to complete a homebuyer education course before closing. TSAHC accepts both in-person and online courses; the approved options live at TexasFinancialToolbox.com, a TSAHC-administered site. The course covers budgeting, the mortgage process, and what to expect as a homeowner.

The online version typically takes about an hour. Since homebuyer education is one of the few requirements completely in your control, it’s worth knocking out early so it never holds up your closing timeline.

Recapture Tax — Three Conditions That Must All Hit

You may have heard scary things about a “recapture tax.” Here’s the honest version: in practice, it rarely touches anyone, and it only matters if you used a bond or MCC structure — not the standard non-bond DPA.

The federal §143 recapture tax may apply only if all three of these conditions hit at the time you sell or refinance:

1. You sell or refinance away from the financed property within nine years of closing.
2. Your household income at the time of sale exceeds the IRS recapture-adjusted income limit for that program year.
3. You realize a gain on the sale that exceeds the recapture threshold.

If even one of those three conditions doesn’t hit, no recapture tax is owed. In practice, very few Texas homeowners ever trigger all three at once — most either stay in the home longer than nine years, don’t see their income climb above the recapture limit, or don’t realize a gain above the threshold.

TSAHC also offers a recapture tax reimbursement program: if you do hit all three and owe the federal recapture tax, TSAHC may reimburse the amount on eligible loans. Verify the current procedure with TSAHC directly. As always, confirm your specific situation with a tax professional before assuming recapture will or won’t apply.

Home Sweet Texas vs the TDHCA Programs

Texas actually has two state down payment assistance agencies, which is good news for buyers — it means more chances to find a fit. TSAHC runs Home Sweet Texas and Homes for Texas Heroes. The Texas Department of Housing and Community Affairs (TDHCA) runs My First Texas Home and My Choice Texas Home. Both agencies serve buyers statewide.

The simple version: Home Sweet Texas is the broad TSAHC option for buyers of any occupation. Homes for Texas Heroes is the TSAHC option for teachers, first responders, veterans, and other public servants. On the TDHCA side, My First Texas Home is the first-time-buyer option (with the lowest income limits and FHA/VA/USDA-only); My Choice Texas Home drops the first-time requirement and carries the highest income limits across all four loan types. If you’re not sure which fits your situation, a licensed mortgage professional in our partner network can sort it out in one conversation. Our full guide to Texas down payment assistance lays them all out side by side.

Sweet Home, Texas vs the Home Sweet Texas Program

Quick disambiguation, since the two terms run close together in search:

Sweet Home, Texas is an actual unincorporated community in Lavaca County, between Hallettsville and Edna in South Texas. Small population, mostly farms and ranchland.

The Home Sweet Texas Home Loan Program (the subject of this guide) is a statewide TSAHC down payment assistance program, not a place. If you happen to be buying in Sweet Home, Texas itself — or anywhere in Lavaca County — the Home Sweet Texas program may still apply to your purchase, depending on the county’s standard income and price limits.

Step-by-Step: How to Get Started

Five steps from “wondering if you qualify” to “closing on a home”:

Step 1. Check the income limit for your county. Compare your household income to the non-targeted income limit in the table above. The standard tier applies at any household size — no need to count children or other household members. What to do: find your county in the table above; if you’re not listed, pull the TSAHC Income & Purchase Price Limits PDF for the full county-by-county figures.

Step 2. Confirm your credit score and budget. Aim for a 620 score for FHA, VA, or USDA, or 640 for HFA Preferred or HFA Advantage conventional. What to do: pull a free credit report at AnnualCreditReport.com and check the middle of your three FICO scores. If you’re below 620, plan 60-90 days of credit work before applying.

Step 3. Connect with a TSAHC-participating lender. Home Sweet Texas is originated only through TSAHC-approved lenders, and not every lender offers it. What to do: start with a licensed mortgage professional in our partner network. They can confirm you’re working with a TSAHC-approved lender and walk you through the three DPA options.

Step 4. Complete homebuyer education. At least one borrower on the loan finishes an approved course before closing. What to do: start the online course at TexasFinancialToolbox.com early — it takes about an hour and removes one timeline risk before the closing date is set.

Step 5. Choose your DPA option and head to closing. Pick No DPA, the grant, or the 3-year forgivable second lien. What to do: discuss the trade-offs with your loan officer before locking your rate — the right option depends on your loan type, how long you plan to stay, and whether you want to add the MCC tax credit.

Documents to Have Ready

Getting paperwork together early keeps everything moving. Most TSAHC-approved lenders ask for some version of:

• Recent pay stubs (usually the last 30 days) and W-2s or 1099s for the past two years
• Federal tax returns for the past two years, especially if you’re self-employed
• Recent bank and asset statements (last 60 days)
• A government-issued photo ID
• Your homebuyer education completion certificate
• For veterans using a VA loan, your Certificate of Eligibility (request via VA.gov)

Frequently Asked Questions

Do I have to be a first-time homebuyer to use Home Sweet Texas?

A lot of buyers worry about this, and the good news is usually no. TSAHC’s standard down payment assistance does not require first-time status, so repeat buyers may qualify. The first-time requirement only applies if you add a Mortgage Credit Certificate or use a bond-funded structure, and even then qualified veterans and buyers in targeted areas are exempt. What to do: if you’ve owned before, ask the lender specifically whether you’re using bond DPA or non-bond DPA — it determines whether the FTHB rule applies.

How much down payment assistance can I get?

You may choose 2%, 3%, 4%, or 5% of your total loan amount. On a $300,000 loan, 5% is $15,000 working toward your down payment and closing costs — often enough to cover most of the cash you would otherwise bring to the table.

Does the assistance have to be paid back?

In most cases, no. The grant option becomes money you never repay six months after closing. The 3-year deferred forgivable second lien carries no monthly payment and is forgiven in full once you have been in the home three years. It may become repayable only if you sell, transfer, refinance, pay off the first lien, or stop occupying the home as your primary residence before the three-year mark.

What is “No DPA” and why would I choose it?

No DPA means you take the program’s first mortgage (and you may add an MCC) without any down payment assistance. Buyers who already have their down payment saved often choose it because it carries the lowest interest rate of the three options.

What are the income limits?

Higher than most people expect, and they apply at any household size on the standard tier. In non-targeted areas, the income limit may reach approximately $146,625 in Dallas, Collin, and Denton counties; $167,250 in Travis County; $133,375 in Tarrant County; $130,833 in Bexar County; and $126,375 in Harris County. Limits may run higher in HUD-targeted census tracts. Verify the current figure for your county in the TSAHC PDF before applying.

What credit score do I need?

TSAHC requires a minimum 620 representative credit score for FHA, VA, and USDA loans, and 640 for the HFA Preferred and HFA Advantage conventional options. Individual lenders may set higher overlays, and meeting the minimum makes you eligible to be considered rather than guaranteeing approval.

Can I use Home Sweet Texas with an FHA or VA loan?

Yes. The program works with FHA, VA, USDA, and conventional loans. On an FHA loan, the assistance may cover most of your down payment and closing costs; on a VA or USDA loan, where no down payment is required, it may go toward closing costs instead.

What is the Mortgage Credit Certificate worth?

An MCC is a federal income tax credit worth up to 15% of the mortgage interest you pay each year, for as long as the home is your primary residence. Because the rate is 15%, the $2,000 federal cap that applies to higher-rate certificates does not apply. Your benefit in any year is limited by the federal tax you actually owe. The credit is non-refundable, and unused amounts may generally carry forward up to three years per IRS Form 8396.

Will I owe a recapture tax when I sell?

Almost certainly not. A federal recapture tax may apply only if all three of these happen: you sell or refinance within nine years, your income at the time of sale exceeds the recapture-adjusted limit, and you realize a gain above the threshold. If any one condition is not met, no recapture is owed, and TSAHC offers a reimbursement program that may refund it even if all three do hit. Verify your situation with a tax professional.

What other home buying programs in Texas should I look into?

Besides Home Sweet Texas, the other major Texas home buying programs are Homes for Texas Heroes (TSAHC, for teachers, first responders, veterans, and other public servants), My First Texas Home (TDHCA, first-time buyers only, FHA/VA/USDA), and My Choice Texas Home (TDHCA, repeat buyers welcome, all loan types). City-level programs in Houston, Dallas, San Antonio, Austin, Fort Worth, and El Paso may also apply depending on where you’re buying. Our full guide to Texas down payment assistance walks through every major option.

What’s the current first-time home buyer interest rate in Texas?

First-time-buyer interest rates in Texas typically track the broader U.S. mortgage rate environment, with TSAHC and TDHCA program rates often within roughly 0.5-1.0 percentage points of the general FHA/VA/Conventional rates for the same credit profile (program rates are set by the agencies, not the open market). The exact rate depends on your DPA option choice, loan type, credit score, and lock date. See the live rate table above for current TSAHC program rates; compare to general market rates via Freddie Mac’s Primary Mortgage Market Survey. What to do: get a rate quote from a participating lender — that’s the only number that applies to your specific situation.

Is “Home Sweet Texas” the program or the place?

Both, technically — but they’re different things. The Home Sweet Texas Home Loan Program is TSAHC’s statewide down payment assistance program (the subject of this guide). Sweet Home, Texas is an unincorporated community in Lavaca County, South Texas. The TSAHC program is named for the phrase, not the place, but the program may still apply to a purchase in Sweet Home, Texas itself if the buyer meets the standard county income and price limits.

The Bottom Line

Home Sweet Texas is one of the broadest down payment assistance programs available to Texas buyers. The income limits are higher than most people expect, the first-time requirement doesn’t apply to the standard down payment help, and the assistance pairs with every major loan type. If you have a 620 credit score and an income under your county’s limit, the only step left is checking with a TSAHC-approved lender to see which of the three options fits your situation.

Closing on a home in Texas right now is harder than it was five years ago. Prices are higher, rates are higher, and the cash you need at closing has climbed with them. Programs like Home Sweet Texas exist to soften that wall. Use them.