My First Texas Home — 2026 First-Time Buyer Guide

For first-time Texas buyers, the down payment is usually the wall. You earn enough to cover a mortgage payment — your rent already proves it — but pulling together $30,000 in cash on top of moving costs, inspection fees, and closing costs feels like an entirely separate problem. My First Texas Home exists to make that wall lower. Run by the Texas Department of Housing and Community Affairs (TDHCA), it may give you up to 5% of your loan amount in down payment and closing cost help, pair with FHA, VA, or USDA financing, and optionally add a federal tax credit worth 15% of your annual mortgage interest. The income limits surprise people — they reach approximately $153,870 in the Austin area for households of three or more.

Up to 5% Down payment & closing-cost help (of loan amount) TDHCA

620 Minimum credit score TDHCA

FHA / VA / USDA Eligible loan types TDHCA

Up to ~$153,870 Income limit, Austin area, 3+ persons (non-targeted) TDHCA

Most Texas down payment programs operate under the same federal rules. My First Texas Home is built specifically for first-time buyers using FHA, VA, or USDA financing — and it’s the only TDHCA program that may carry the Mortgage Credit Certificate. If you’re a true first-time buyer (no primary residence in the last three years), a qualified veteran, or buying in a HUD-targeted census tract, this is usually the first TDHCA program worth checking.

This guide walks through who qualifies (the three-year rule + two exceptions), the two assistance structures (30-year deferred repayable + 3-year deferred forgivable), how much you may receive, the household-tiered income limits, the purchase price limits, how it pairs with FHA/VA/USDA, what the MCC adds via the My First Combo option, and the three conditions that have to all hit before recapture could apply. Every load-bearing figure links to a primary source — the TDHCA Limits PDF, the My First Texas Home Program Matrix, or the IRS for tax rules.

What Is My First Texas Home?

My First Texas Home is one of two down payment assistance programs administered by TDHCA through The Texas Homebuyer Program. It’s the agency’s first-time-buyer option, built around the federal §143 mortgage revenue bond program that funds it. Its companion program, My Choice Texas Home, serves buyers who don’t meet the first-time rule and buyers using conventional financing.

The program pairs a 30-year fixed-rate first mortgage with down payment and closing cost assistance worth between 2% and 5% of your loan amount, delivered as a 0% second lien. It works with FHA, VA, and USDA loans only. Conventional loans are not eligible under My First Texas Home — that’s My Choice’s territory. Eligible buyers may also combine the assistance with a Mortgage Credit Certificate through the My First Combo option.

One thing worth knowing up front: My First Texas Home is originated only through TDHCA-approved participating lenders. Not every lender offers it. Working with a licensed mortgage professional in our Texas partner network who participates in The Texas Homebuyer Program is how you get inside that door.

Three Myths That Keep First-Time Texas Buyers from Applying

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

Myth 1: “I owned a home years ago, so I can’t qualify.” The reality: TDHCA’s first-time rule looks back only three years. The federal definition — used by Fannie Mae, HUD, and the IRS in §143(d) — means someone who has not owned and occupied a primary residence in the last 36 months. If your last ownership ended more than three years ago, you’re a first-time homebuyer again under federal definition. Qualified veterans (DD-214) and buyers in HUD-targeted census tracts may also be exempt from the rule.

Myth 2: “I make too much money.” The reality: My First Texas Home income limits in the Austin–Round Rock area reach approximately $153,870 for households of three or more, and $133,800 for households of one or two — per the TDHCA Income & Purchase Price Limits PDF. A teacher married to a healthcare worker in Travis County making $100K+ combined typically fits comfortably. Dallas HMFA reaches $134,895 for 3+ households; Houston $116,265; San Antonio $119,861. Limits are tiered by household size, with a higher bracket for households of 3 or more.

Myth 3: “The assistance is 5% of the purchase price.” The reality: assistance is up to 5% of your total mortgage loan amount, not the purchase price. On an FHA loan with 3.5% down on a $325,000 home, your loan amount is about $313,625 — so 5% assistance is $15,681, not the $16,250 that 5% of the purchase price would be. Small difference, but worth being precise about so you’re not surprised at closing.

Who Qualifies — The First-Time Rule and Its Two Exceptions

My First Texas Home is, as the name suggests, a first-time homebuyer program. Under TDHCA’s guidelines (per the My First Texas Home Program Matrix), to qualify as a first-time buyer you must not have owned and occupied a home as your primary residence at any point in the last three years. The word “occupied” matters here, and in your favor: owning a rental property you never lived in, or owning a home more than three years ago, may not disqualify you.

The program carries two important exceptions:

• Qualified veterans. If you’re a veteran with an honorable discharge (documented by your DD-214), you may be exempt from the first-time-buyer requirement entirely.
• Homes in a HUD-targeted census tract. If the home you’re buying sits in a HUD-designated targeted census tract, you may qualify even if you’ve owned a home in the last three years.

Beyond the first-time rule, you’ll need to meet the income limit for your area and household size, meet the 620 credit minimum, complete homebuyer education, occupy the home as your primary residence within 60 days, and use an eligible loan type (FHA, VA, or USDA). Each is covered below.

How Much Assistance You May Receive

The assistance is figured as a percentage of your total mortgage loan amount — between 2% and 5%. On a $300,000 loan, 5% is $15,000. The assistance comes as a 0% second lien and may be delivered in one of two structures:

The 30-year deferred repayable second lien carries 0% interest and requires no monthly payment, though voluntary payments are welcome. You’d repay it in full only when you sell, refinance, transfer, or pay off the first lien — with no prepayment penalty. Because it carries no interest and no required payment, it may simply sit quietly behind your first mortgage for years.

The 3-year deferred forgivable second lien also carries 0% interest and no monthly payment, and it’s fully forgiven at the 36-month mark — as long as you stay current on your first lien and the home remains your primary residence. It’s forgiven all at once at year three, so it may become repayable if you sell, refinance, or move out before that mark. This structure rewards buyers planning to stay at least three years.

Income Limits by Household Size (2026)

This is the rule that surprises people most. “Assistance” makes a lot of first-time buyers assume the limits must be low. They’re not. My First Texas Home income limits in some major Texas areas reach approximately into the $150,000s for larger households.

The program sorts buyers into two household-size brackets: 1–2 persons and 3 or more persons. The 3+ bracket carries a higher limit. The figures below come from the TDHCA Combined Income & Purchase Price Limits PDF, effective for the MFTH/MCC table as of May 27, 2025:

County / TDHCA area	MFTH 1–2 person	MFTH 3+ person
Dallas HMFA (Collin, Dallas, Denton, Ellis, Hunt, Kaufman, Rockwall)	~$117,300	~$134,895
Fort Worth–Arlington HMFA (Johnson, Parker, Tarrant)	~$106,700	~$122,705
Austin–Round Rock MSA (Travis, Williamson, Hays, Bastrop, Caldwell)	~$133,800	~$153,870
Houston HMFA (Harris)	~$101,100	~$116,265
San Antonio MSA (Bexar)	~$104,227	~$119,861
Balance of State (incl. El Paso)	~$98,800	~$113,620

Limits may run higher in HUD-targeted census tracts. Verify your area’s current figure in the TDHCA PDF before applying — limits update periodically.

Purchase Price Limits

Purchase price limits are higher than many first-time buyers expect, too. This isn’t a program built only for starter homes.

County / TDHCA area	Non-targeted max purchase price
Dallas HMFA & Fort Worth–Arlington	~$585,006
Austin–Round Rock MSA	~$593,363
San Antonio MSA	~$579,037
Houston HMFA	~$544,232
Balance of State (incl. El Paso)	~$544,232

Targeted-area limits run higher — confirm the current figure with the TDHCA PDF before assuming a specific home qualifies.

How It Pairs With FHA, VA, and USDA Loans

My First Texas Home isn’t a mortgage on its own — it’s help that rides on top of a first mortgage. The program works with FHA, VA, and USDA loans only. Conventional loans are not eligible under My First Texas Home. Conventional buyers should look at My Choice Texas Home, which carries no first-time-buyer requirement and accepts conventional financing.

With an FHA loan (3.5% minimum down per HUD Handbook 4000.1), 5% My First Texas Home assistance may completely cover the down payment AND chip into closing costs.

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 — and qualified veterans are exempt from the first-time-buyer rule.

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

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.” Most Texas DPA programs have rules that prevent or restrict combining benefits.

The MCC Tax Credit via the My First Combo Option

The Mortgage Credit Certificate (MCC) is the gift that keeps giving. TDHCA offers it combined with My First Texas Home through the My First Combo option. An MCC is a federal income tax credit, not a deduction — that distinction matters. A deduction reduces your taxable income; a credit cuts the tax you owe dollar for dollar. The TDHCA 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 credit rate is 15%, the federal $2,000 annual cap that applies only to certificates rated above 20% does NOT apply. Your benefit in any year is limited instead by the federal tax you actually owe. The credit is non-refundable, and unused credit may generally carry forward up to three years per IRS Form 8396 instructions.

Important rule: the MCC is available combined with My First Texas Home, but it’s NOT available with My Choice Texas Home. So if the MCC is a priority, My First is the only TDHCA path that carries it. (TSAHC offers a separate MCC paired with Home Sweet Texas or Homes for Texas Heroes, with the $400 issuance fee waived for Heroes.)

Credit Requirements

TDHCA sets a minimum middle (representative) credit score of 620 for My First Texas Home, per the TDHCA Lender Guide. Your “middle” score is the median of the three scores pulled from the major credit bureaus.

“Minimum credit score” is a floor, not a finish line. Hitting 620 makes you eligible to be considered; your full file — income, debts, employment, and assets — still has to be approved. Individual lenders may apply higher overlays. If your score is just under the line, a licensed mortgage professional may be able to identify one or two specific moves (paying down a credit card balance, disputing a single reporting error) that may lift you over the threshold in 30-60 days.

Homebuyer Education — Required for Every Borrower

My First Texas Home requires every borrower on the loan to complete a homebuyer education course before closing. (Non-occupying co-signers are exempt.) TDHCA accepts approved in-person and online options listed at TexasFinancialToolbox.com.

The online version typically takes about an hour. Knock it out early so it never holds up your closing timeline.

Recapture Tax — Three Conditions That Must All Hit

Here’s the honest version: because My First Texas Home is a bond-eligible, MCC-eligible program funded under federal §143, it may be subject to the federal recapture tax. TDHCA requires tax returns or transcripts as part of the loan file. But in practice, recapture rarely touches anyone.

The federal §143 recapture tax may apply only if all three of these conditions hit:

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 condition doesn’t hit, no recapture tax is owed. The Texas Homebuyer Program also offers a recapture reimbursement provision that may refund the amount if you do hit all three; eligibility and procedure live at welcomehome.tdhca.texas.gov. Verify your specific situation with a tax professional before assuming recapture will or won’t apply.

My First vs My Choice Texas Home — and vs the TSAHC Programs

Choosing between TDHCA’s two programs comes down to first-time status and loan type. My First Texas Home is the first-time-buyer option for FHA, VA, and USDA loans — and the only TDHCA program that may carry the MCC. My Choice Texas Home has no first-time requirement, accepts conventional alongside government loans, carries higher income limits, and doesn’t offer the MCC.

If you’re a first-time buyer using FHA, VA, or USDA and want the tax credit, My First is usually the better fit. If you’ve owned recently, earn above the My First limits, or want a conventional loan, My Choice may be the path. The other state agency, TSAHC, runs Home Sweet Texas and Homes for Texas Heroes. Our full guide to Texas down payment assistance lays them all out side by side.

Step-by-Step: How to Apply for My First Texas Home

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

Step 1. Confirm your first-time status. Make sure you haven’t owned and occupied a primary residence in the last three years. What to do: if you owned a home in the last 36 months, check whether you qualify under the veteran (DD-214) or HUD-targeted census tract exception via the HUD CPD Maps.

Step 2. Check the income and purchase price limits. Compare your household income to the non-targeted limit for your area and household-size bracket above. What to do: if your area isn’t listed, pull the TDHCA Limits PDF for the full statewide table.

Step 3. Confirm your credit score. Aim for a 620 middle score. What to do: pull a free credit report at AnnualCreditReport.com. If you’re below 620, plan 60-90 days of credit work before applying.

Step 4. Connect with a participating lender. My First Texas Home is originated only through TDHCA-approved lenders. What to do: start with a licensed mortgage professional in our partner network — they can confirm participation and walk you through the My First Combo option for the MCC.

Step 5. Complete homebuyer education and close. Every borrower finishes the course; decide between the 30-year deferred and the 3-year forgivable structure. What to do: start the course at TexasFinancialToolbox.com while you’re house-hunting so it’s not the bottleneck at closing.

Documents to Have Ready

• Recent pay stubs (last 30 days) and W-2s or 1099s for the past two years
• Federal tax returns or transcripts for the past two years — required for recapture eligibility
• Recent bank and asset statements (last 60 days)
• A government-issued photo ID
• Your homebuyer education completion certificate
• For veterans claiming the first-time exception, your DD-214 (request via VA.gov) and Certificate of Eligibility

Frequently Asked Questions

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

Generally, yes. TDHCA defines first-time as not having owned and occupied a primary residence in the last three years. Two exceptions: qualified veterans (DD-214) may be exempt, and buyers purchasing in a HUD-targeted census tract may be exempt. If you owned a home but not within the last 36 months, you may still qualify because the clock has reset.

How much down payment assistance can I get?

Between 2% and 5% of your total mortgage loan amount. On a $300,000 loan, 5% is $15,000.

Does the assistance have to be paid back?

It depends on the structure. The 30-year deferred second lien carries 0% interest and no required monthly payment — repaid only when you sell, refinance, transfer, or pay off the first lien. The 3-year deferred forgivable second lien is forgiven in full at the 36-month mark as long as you stay current and keep the home as your primary residence.

What loan types does My First Texas Home work with?

FHA, VA, and USDA only. Conventional loans are not eligible. For a conventional first mortgage with TDHCA assistance, look at My Choice Texas Home, which has no first-time-buyer requirement.

What are the income limits?

Higher than most people expect and tiered by household size. In non-targeted areas the maximum household income may reach approximately $134,895 in Dallas, $153,870 in Austin, $116,265 in Houston, $119,861 in San Antonio, and $113,620 in Balance of State (incl. El Paso) for households of three or more. Verify your area’s current figure in the TDHCA PDF.

What credit score do I need?

A 620 middle credit score. Individual lenders may set higher overlays.

Can I get the MCC tax credit with My First Texas Home?

Yes. TDHCA offers the Mortgage Credit Certificate combined with My First Texas Home through the My First Combo option. The MCC is worth up to 15% of your annual mortgage interest, limited by federal tax owed. Non-refundable; unused amounts may carry forward up to three years per IRS Form 8396. The MCC is NOT available with My Choice Texas Home.

Will I owe a recapture tax when I sell?

Probably not. A federal §143 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.

What other first time home buyer Texas programs are there?

Besides My First Texas Home, the major first-time home buyer Texas programs are Home Sweet Texas (TSAHC, no FTHB requirement on standard tier — open to repeat buyers too), Homes for Texas Heroes (TSAHC, for teachers/first-responders/veterans — with the $400 MCC fee waived for Heroes), and the federal Mortgage Credit Certificate. City-level programs in Houston, Dallas, San Antonio, Austin, Fort Worth, and El Paso may also apply. Our full guide to Texas down payment assistance walks through every major option.

Does Texas have a first time home buyer program?

Yes — Texas has several first time home buyer programs. The state runs two through TDHCA (My First Texas Home for first-time buyers using FHA/VA/USDA, and My Choice Texas Home for repeat buyers with all loan types) and two through TSAHC (Home Sweet Texas open to all buyers, and Homes for Texas Heroes for public servants). Federal programs available in Texas include the Mortgage Credit Certificate tax credit, FHA loans, VA loans, USDA Rural Development loans, and Fannie Mae HomeReady® / Freddie Mac Home Possible® low-down-payment conventional programs.

The Bottom Line

My First Texas Home is the most direct path to a first home for Texas buyers using FHA, VA, or USDA financing. The income limits are higher than most first-time buyers expect, the three-year rule is wider than it sounds, qualified veterans and buyers in HUD-targeted tracts are exempt entirely, and the program is the only TDHCA path that carries the federal MCC tax credit. If you haven’t owned in the last 36 months, meet your area’s income limit, and have a 620 credit score, the next step is checking with a TDHCA-participating lender.

Closing on your first home in Texas right now is harder than it was five years ago. Programs like My First Texas Home exist to make the math possible for first-time buyers when the down payment is the wall. Use it.