TDHCA Down Payment Assistance: The Texas Homebuyer Program Guide (2026)

For many Texas homebuyers, the biggest obstacle to purchasing a home isn’t qualifying for the mortgage. It’s coming up with the money needed at closing.

Between the down payment, closing costs, prepaid property taxes, homeowners insurance, and other transaction expenses, many buyers assume they need tens of thousands of dollars saved before homeownership becomes possible. The reality may surprise you.

Programs offered through the Texas Department of Housing and Community Affairs (TDHCA) have helped thousands of Texans purchase homes sooner than they thought possible by providing access to down payment assistance and affordable home financing. At ShopDPA, one of the most common questions we hear is: “How much money do I really need to buy a home?”

The answer depends on your income, credit profile, loan type, county, household size, and the assistance programs available to you. This guide walks through how the TDHCA programs work, who may qualify, how much assistance may be available, and what buyers should know before applying.

What Is TDHCA?

The Texas Department of Housing and Community Affairs (TDHCA) is a state agency that administers housing assistance programs throughout Texas. TDHCA does not lend money directly to homebuyers. Instead, it works through participating lenders who originate the mortgage and determine eligibility based on program guidelines.

Many buyers refer to these programs collectively as the TDHCA Texas Homebuyer Program. The two most common are My First Texas Home and My Choice Texas Home.

The Two TDHCA Programs

My First Texas Home (MFTH) is designed primarily for first-time homebuyers and eligible veterans. For program purposes, a first-time homebuyer is generally someone who has not owned a home within the previous three years. Certain exceptions also apply to qualified veterans and buyers in targeted areas.

My Choice Texas Home (MCTH) is often attractive because it may allow both first-time and repeat homebuyers to qualify, depending on eligibility requirements. This is one reason many buyers are surprised to learn they may still qualify for assistance even if they have owned a home before.

How TDHCA Down Payment Assistance Works

TDHCA programs generally combine a 30-year fixed-rate first mortgage with down payment assistance of up to 5% of the first mortgage amount, depending on the program selected. The assistance helps reduce the amount of money buyers may need at closing, and may generally be applied toward the down payment, closing costs, and certain eligible prepaid expenses.

On the standard TDHCA programs, the assistance is structured as a second lien behind your first mortgage. Depending on the program and structure, that second lien may be:

• A deferred forgivable second lien that may ultimately be forgiven after you satisfy the required program terms, or
• A deferred repayable second lien that typically carries 0% interest, requires no monthly payment, and is repaid only on a future event such as selling, refinancing, or paying off the first mortgage.

Separately, in certain eligible counties, additional grant “gift funds” may be available through a local housing finance corporation to layer on top of the TDHCA assistance. These grants are not offered statewide — they are county-specific, currently available through partners such as the Capital Area HFC (Bastrop, Blanco, Burnet, Caldwell, Fayette, Hays, Lee, Llano, and Williamson counties), the Harris County HFC, and the City of McKinney. You can confirm current availability for your area on the TDHCA additional gift-funds page.

Each structure works differently and should be reviewed carefully before making a decision. For a full breakdown of how grants, forgivable loans, and deferred loans compare, see our guide on grants vs. forgivable loans vs. deferred loans. The goal is not simply finding the largest amount of assistance — it’s finding the financing structure that best supports your monthly payment comfort, cash reserves, and long-term plans.

How Much Down Payment Assistance Is Available?

Many TDHCA programs offer assistance equal to up to 5% of the first mortgage amount. For example:

• $200,000 loan amount = up to approximately $10,000 in assistance
• $300,000 loan amount = up to approximately $15,000 in assistance
• $400,000 loan amount = up to approximately $20,000 in assistance

Assistance may generally be applied toward your down payment, closing costs, and eligible prepaid expenses. Your lender will explain exactly how the assistance may be applied to your transaction.

How Much Money Do You Need to Buy a Home?

This is often the question buyers care about most. Many assume they need 10%, 15%, or even 20% down before purchasing. In reality, many qualified buyers may need substantially less.

Conventional example. A first-time homebuyer purchasing a $400,000 home with conventional financing may only need a minimum down payment of approximately 3%, or $12,000. Depending on the assistance program selected, a qualified buyer with a loan amount near $388,000 may potentially receive up to approximately $19,400 in down payment assistance. In some situations, that amount may be enough to cover the entire minimum down payment requirement while also helping with eligible closing costs.

FHA example. A buyer purchasing the same $400,000 home with FHA financing may only need a minimum down payment of approximately 3.5%, or $14,000. On an FHA loan amount of approximately $386,000, a qualified buyer receiving 5% assistance could potentially receive approximately $19,300 in assistance. This is one reason many homebuyers are surprised to learn they may need significantly less money to purchase a home than they originally expected.

Income Limits Matter More Than Most Buyers Realize

One of the biggest misconceptions about TDHCA programs is that they are only available to low-income households. In reality, income limits may be significantly higher than buyers expect. They vary based on county, household size, loan type, and program selected.

For example, under certain My Choice Texas Home options, household income limits in the Austin–Round Rock area (Travis County) may reach approximately $227,460 in non-targeted areas, depending on loan type and current program guidelines. My First Texas Home limits vary by household size and area — for instance, the Austin area runs roughly $133,800 for a 1–2 person household and $153,870 for 3 or more. Many buyers who assume they earn too much money are surprised to learn they may still qualify. Confirm the current figure for your county with a participating lender.

What Credit Score Do You Need?

Many buyers assume they need perfect credit to qualify. That is not necessarily true. Most TDHCA programs generally require a minimum FICO score of 620.

Many buyers are also surprised to learn that TDHCA program rates are generally not priced the same way as traditional risk-based mortgage pricing. Once a borrower meets the minimum program credit requirements, the program interest rate is often the same whether the borrower has a 620 credit score or an 800 credit score. While higher credit scores may create additional financing options outside the program, perfect credit is generally not required.

Eligible Loan Types

TDHCA programs may be paired with several popular mortgage options, including FHA loans, VA loans, USDA loans, and conventional loans. The exact combinations available may vary depending on program guidelines and lender requirements.

Homebuyer Education Requirements

Certain TDHCA programs require completion of an approved homebuyer education course before closing. The course helps buyers better understand budgeting, credit, mortgage financing, homeownership responsibilities, and the closing process. Completing it early can help prevent delays later in the transaction. You can find approved courses on the TDHCA homebuyer education page.

Common Myths About the TDHCA Texas Homebuyer Program

Many buyers eliminate themselves before ever speaking with a lender because they assume they won’t qualify. Some of the most common beliefs about down payment assistance simply are not true.

“My income is too high.” Income limits can be significantly higher than buyers expect, and many middle- and higher-income households are surprised to learn they may still qualify.

“I need perfect credit.” Most TDHCA programs generally require a minimum 620 FICO, and once you meet that minimum, the interest rate is often the same at 620 as it is at 800.

“I have to be a first-time homebuyer.” While My First Texas Home generally requires the first-time definition, My Choice Texas Home may allow both first-time and repeat homebuyers to qualify.

“I’ll have to pay all the assistance back.” Not all assistance works the same way. Some structures are forgivable after you satisfy program terms; others are deferred repayable seconds that typically carry 0% interest, require no monthly payment, and generally do not increase over time. In certain eligible counties, grant gift funds may also be available.

“I need 20% down.” Many first-time buyers qualify for conventional financing with as little as 3% down, FHA with as little as 3.5% down, and VA or USDA with no down payment requirement. When down payment assistance is added, many buyers are surprised how much less they may need.

“Down payment assistance is only for FHA loans.” TDHCA programs may be available with FHA, VA, USDA, and conventional financing depending on the program selected and eligibility.

“The program offering the most assistance is automatically the best.” Not always. For some buyers, maximizing assistance makes sense; for others, a lower interest rate, different loan structure, or fewer restrictions may provide greater long-term value. The best option is the one that best supports your financial goals.

TDHCA vs. TSAHC: Which Is Better?

Neither program is automatically better. The right choice depends on your household income, county, household size, credit profile, loan type, cash reserves, and long-term goals. TDHCA and TSAHC each run respected statewide programs, and a participating lender can compare them side-by-side for your situation. For the full comparison of how the assistance is structured, see our grants vs. forgivable vs. deferred guide.

Frequently Asked Questions