They say everything is bigger in Texas, and that's true for Texas' first-time homebuyer program. Texas has two statewide organizations that offer many types of first-time homebuyer programs, from low-interest loans to down payment assistance. Please continue to find out if you qualify for these innovative programs.
Dig deeper: Everything you need to know as a first-time home buyer
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Texas has two statewide organizations that offer affordable housing programs for first-time homebuyers. The Texas Department of Housing and Community Affairs (TDHCA) is the state agency responsible for affordable housing programs, and the Texas Affordable Housing Corporation (TSAHC) is a nonprofit organization created by the Texas Legislature. Serve as an affordable housing provider. Neither organization provides loans directly; instead, it works with approved private mortgage lenders.
You can also find local first-time homebuyer programs at the county and city levels through the U.S. Department of Housing and Urban Development's website.
Both organizations have two first-time homebuyer programs designed for low- and moderate-income individuals to get the help they need to buy their dream home.
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Both TDHCA and TSAHC have two major loan programs that offer first-time homebuyers a variety of ways to save money.
The My First Texas Home program offers many ways to save money with just one program. Best of all, first-time homebuyers and veterans can get 30-year mortgages with fixed low interest rates to increase housing affordability across the state. Loan must be an FHA, VA or USDA loan.
In addition to this loan, you can receive assistance of up to 5% of your first mortgage amount to cover your down payment or closing costs. This additional assistance comes in the form of a forgivable 0% interest second mortgage, so you don't have to make any monthly payments or repayments on your second mortgage at all.
The program also provides you with a Mortgage Credit Certificate (MCC), which helps you save on federal income taxes. The MCC is a dollar-for-dollar federal income tax credit based on the amount you pay in mortgage interest. For example, if you have a $100,000 loan with an interest rate of 6%, you will pay $6,000 in interest each year. With the 20% MCC through My First Texas Home, you can save 20% of your $6,000 ($1,200) in federal income taxes. You can save up to $2,000 per year with this program.
learn more: What to know about the first-time homebuyer tax credit in 2025
The My Choice Texas Home plan offers many of the same basic savings as the My First Texas Home plan, but there are some key differences. Here are the similarities: My Choice Texas Home offers low-interest, fixed-rate loans and down payment or closing cost assistance up to 5% of the loan amount.
However, the program is also available to repeat homebuyers and those with higher incomes. The program also applies to conventional loans as well as government-backed FHA, VA and USDA loans. The downside is that you can't get MCC through the My Choice program.
Read more: Down payment assistance – how it works and how to qualify
The Home Sweet Texas program offers FHA, VA, USDA and HFA (housing finance agencies) conventional first mortgages. All of these loans must be 30-year fixed-rate loans. You can also get down payment or closing cost assistance through first-time homebuyer cash grants or 0% interest loans that are forgiven after three years. Both options give you access to up to 5% of the loan amount to help with a down payment or closing costs.
This scheme is not exclusive to first-time homebuyers, but there are additional benefits if you buy your first home through the 15% MCC.
Dig deeper: A Complete Guide to Texas First-Time Home Buyer Grants
The Homes for Texas Heroes program also offers 30-year fixed-rate mortgages and downpayment assistance up to 5% of the loan amount, but the program is reserved for homebuyers with specific public service jobs.
You must have a job in one of the following categories to qualify:
Professional educators (school teachers, teaching assistants, school counselors, school librarians, and school nurses in the public school system)
First responders (firefighters, police officers and paramedics)
public security personnel
Veteran or active duty military
Correctional or juvenile corrections officer
Nurse or allied health professional
If you are a first-time home buyer, you can also use an MCC to save on federal income taxes. Combining MCC with down payment assistance means you don't have to pay the typical $500 MCC fee.
Specific eligibility requirements will depend on the program type and the mortgage lender you choose. However, both organizations have some general eligibility requirements:
First time home buyer definition: The term "first-time homebuyer" generally refers to someone who has not owned a home within the past three years.
Credit score for buying a house: The minimum credit score required for all of the above programs is 620, except for the TSAHC HFA conventional loan, which requires a credit score of 640.
Debt to Income (DTI) Ratio: The maximum DTI ratio required by TDHCA is 45% to 50%, depending on the amount of your reserves. TSAHC may have DTI requirements for government-backed loans, depending on your credit score and the lender's underwriting method.
Income level: Each plan has specific income limits based on the median income in the area where you purchase. For example, TDHCA lists income limits for the My First Texas Home benefit by county, home loan type, and more.
Sales price: Each plan has specific sales price limits based on the home type and area.
Education courses: All programs require homebuyer education courses to qualify.
Read more: What is your debt-to-income ratio? How does it affect your mortgage?
Both organizations have simple application processes that you can complete with the lender of your choice.
TDHCA outlines three steps to apply for one of its programs:
Educate yourself: TDHCA offers free online education courses to take you through the entire home buying process before you start looking for a home.
Get prequalified: You can choose from a list of TDHCA-approved lenders who can pre-approval your mortgage and offer TDHCA assistance as part of the loan package. You don't even have to fill out an application directly with TDHCA. NOTE: TDHCA appears to use the terms "prequalification" and "preapproval" interchangeably on its website - as far as we know, "preapproval" is the correct term for this situation. This involves the borrower providing more financial information and can lower your credit score as the lender conducts a rigorous credit pull to assess your eligibility.
Work with a real estate agent to find a home: A real estate agent can help you find a home you can afford based on the loan amount you qualify for and work with TDHCA and your lender to close the deal.
Dig deeper: What is a mortgage pre-approval?
The TSAHC application process has four simple steps:
Take their qualifying test. You only need to answer four simple questions to determine if you qualify for one of these programs.
Find an approved lender. If you qualify, contact one of TSAHC's approved lenders and they can guide you through the rest of the loan process.
Fill out the application form: You will work with your lender, not TSAHC, to fill out the necessary paperwork to take advantage of the TSAHC program.
Find and close on homes: Once you find the home you want to buy, your lender will work with TSAHC to finalize the loan terms and prepare you for a smooth closing on your home.
Read more: Best Mortgage Lenders for First Time Home Buyers
If you are a Texas resident and qualify for a VA loan or USDA loan, you can purchase a home with 0% down. Otherwise, you may qualify for down payment assistance through the Texas Department of Housing and Community Affairs (TDHCA) or the Texas Affordable Housing Corporation (TSAHC), which can help you purchase a home without a down payment upfront.
To get down payment assistance through TDHCA or TSAHC, you typically need a minimum credit score of 620. The exception is the TSAHC HFA regular loan, which requires 640 points.
The income limits for qualifying for the My First Texas Home program depend on a variety of factors, such as the county you live in, the number of people in your household, and whether you are in a "targeted area" (that is, considered to be in a " "Target Area" area) to purchase property. Severe financial hardship. You can find the exact income limits that apply to your situation here.
The editor of this article is Laura Grace Tarpley.