TSAHC Down Payment Assistance: Home Sweet Texas, Heroes and MCC Guide (2026)

For many Texas homebuyers, the hardest part of buying a home isn’t the monthly payment — it’s the cash needed at closing. The Texas State Affordable Housing Corporation (TSAHC) was created by the Texas Legislature to help with exactly that, through statewide down payment assistance and a mortgage tax credit. This guide walks through how the TSAHC programs work, who may qualify, and what buyers should know before applying.

What Is TSAHC?

TSAHC is a nonprofit organization that administers homebuyer assistance programs across Texas. It does not lend money directly — instead, it works through participating lenders who originate the mortgage and determine eligibility. Many buyers reach TSAHC’s assistance through one of its two well-known programs.

The Two TSAHC Programs

Home Sweet Texas Home Loan is available to first-time and repeat buyers who meet the program’s income and credit requirements.

Homes for Texas Heroes is for buyers in eligible “hero” professions — including full-time public-school teachers, teacher aides, school counselors, school librarians, and school nurses; police and public security officers; firefighters and EMS personnel; veterans and active-duty military; correctional and juvenile corrections officers; and nursing and allied-health faculty. Heroes uses the same structure as Home Sweet Texas, but it waives the first-time-buyer requirement for eligible occupations. Importantly, Heroes does not use a higher income limit than Home Sweet Texas — both programs share the same TSAHC county income limit.

How TSAHC Down Payment Assistance Works

Both TSAHC programs combine a 30-year fixed-rate first mortgage with down payment assistance of up to 5% of the loan amount. You can choose to receive the assistance as a grant, which does not have to be repaid, or as a deferred forgivable second lien, which only has to be repaid if you sell or refinance within three years. The assistance may generally be applied toward your down payment and eligible closing costs. Your lender will help you decide which option fits your situation.

The TSAHC Mortgage Credit Certificate (MCC)

First-time buyers (and qualified veterans, or buyers in HUD-targeted areas) may also add a Mortgage Credit Certificate. An MCC is a federal income tax credit equal to 15% of the mortgage interest you pay each year, with no annual cap — though the amount you can actually claim in a given year depends on your federal tax liability. Because TSAHC issues its MCC at 15% (below the 20% threshold in IRS rules), the annual dollar cap that applies to higher-rate certificates does not apply here. Eligibility, income, and purchase-price limits apply, and the MCC must be obtained when you take out your mortgage.

Income Limits

One of the biggest misconceptions is that TSAHC programs are only for low-income households. In reality, the income limits are higher than most buyers expect. TSAHC applies a single income limit set by county and family-independent (it does not change with household size) — generally up to approximately $167,250 in non-targeted areas, with higher figures possible in HUD-targeted areas. The same limit applies to both Home Sweet Texas and Homes for Texas Heroes. Confirm the current figure for your county with a participating lender.

What Credit Score Do You Need?

Most TSAHC programs require a minimum 620 FICO. Perfect credit is generally not required, and meeting the 620 minimum is what opens the door to the assistance and the program rate.

Eligible Loan Types

TSAHC assistance may be paired with FHA, VA, USDA, and conventional financing. On government loans (FHA/VA/USDA) the assistance is often structured as a grant; on conventional loans it is often a forgivable second lien. The exact combinations available may vary by lender.

Homebuyer Education

TSAHC requires completion of an approved homebuyer education course before closing. The course covers budgeting, credit, financing, and the closing process, and completing it early helps avoid delays.

Common Myths About TSAHC Programs

“My income is too high.” TSAHC income limits reach approximately $167,250 in non-targeted areas — many middle- and higher-income households still qualify.

“Heroes lets me earn more than Home Sweet Texas.” Not quite. Both programs use the same TSAHC county income limit. The Heroes advantage is that it waives the first-time-buyer requirement for eligible occupations.

“I have to be a first-time homebuyer.” Home Sweet Texas is open to repeat buyers, and Heroes waives the first-time requirement for eligible jobs.

“I’ll have to pay the assistance back.” The grant option generally never has to be repaid; the forgivable second lien is only repaid if you sell or refinance within three years.

“The MCC saves a flat amount.” The MCC is a credit equal to 15% of your annual mortgage interest with no annual cap — the amount you can use depends on your tax liability, so it varies by buyer.

Frequently Asked Questions