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First-Time Buyers • August 7, 2025
Texas Down Payment Assistance Programs: TSAHC, TDHCA, and More (2026 Guide)
Texas has multiple state-backed programs that can cover your down payment — some with money you never repay. Here's how TSAHC, TDHCA, and the Texas MCC work in 2026.
Texas consistently ranks among the top states in the country for first-time homebuyer assistance programs — and most Texas buyers don't know these programs exist. Between TSAHC, TDHCA, and the Texas Mortgage Credit Certificate, there's a substantial amount of state-backed help available to buyers who meet the income and purchase price requirements.
Here's a complete breakdown of what's available in Texas in 2026.
TSAHC — Texas State Affordable Housing Corporation. TSAHC administers two main programs: Home Sweet Texas and Homes for Texas Heroes. Both offer down payment assistance of 3% to 5% of the loan amount, and you have a choice of how you receive it.
The grant option — money you never repay. TSAHC offers the assistance as an outright grant — not a loan, not a lien on your property. You receive the funds at closing and never have to pay them back. The trade-off is a slightly higher interest rate on your first mortgage to offset the cost. For many buyers, this is still a significantly better deal than putting 3.5% to 5% down out of pocket.
The DPA second mortgage option. Alternatively, TSAHC offers the assistance as a zero-interest second mortgage that becomes due when you sell or refinance. This option typically comes with a slightly lower interest rate on the first mortgage compared to the grant option. Running the numbers on both scenarios is worthwhile — the right choice depends on how long you plan to stay in the home.
Homes for Texas Heroes — expanded eligibility. The Homes for Texas Heroes program is specifically designed for teachers, police officers, firefighters, EMS personnel, corrections officers, and veterans. Heroes buyers get access to the same grant and DPA second mortgage options, and in some cases at slightly more favorable terms. If you work in any of these professions, you may qualify even if your income is higher than the standard TSAHC limits.
TDHCA — Texas Department of Housing and Community Affairs. TDHCA offers two key programs: My First Texas Home and My Choice Texas Home. My First Texas Home is for first-time buyers and offers a 30-year fixed-rate mortgage with down payment and closing cost assistance of up to 5% of the loan amount as a zero-interest, deferred second mortgage. My Choice Texas Home is for both first-time and repeat buyers in targeted areas or professions and offers similar assistance structure.
Texas Mortgage Credit Certificate (MCC). The MCC is a federal tax credit — not a deduction, but an actual dollar-for-dollar credit against your income taxes — worth up to 40% of the annual mortgage interest you pay, capped at $2,000 per year. For a buyer with a $300,000 mortgage at 7%, that's approximately $2,000 back at tax time every year for the life of the loan. Over a 10-year period, that's $20,000 in tax savings. The MCC can be combined with TSAHC and TDHCA assistance programs.
Income and purchase price limits. Like California, Texas programs have income limits by county and household size, and purchase price caps. In major metros like Dallas-Fort Worth, Houston, San Antonio, and Austin, limits are set to reflect local market conditions. First-time buyer status (not having owned a primary residence in the last three years) is required for most programs.
Can these programs be combined with VA or FHA loans? Yes. TSAHC and TDHCA assistance can be layered on top of FHA, VA, conventional, and USDA first mortgages. For veterans using a VA loan with zero down payment, the DPA can cover closing costs — effectively getting you into a home with nothing out of pocket.
How to take advantage before funds run out. Texas assistance programs are funded by bond programs and allocations that can be exhausted mid-year. The time to look into these programs is before you find the house — not after you're under contract. Being pre-approved with an understanding of which programs you qualify for puts you in a position to act quickly when you find the right property.
I'm licensed in Texas and work with TSAHC, TDHCA, and MCC programs regularly. If you're a Texas buyer — first-time or otherwise — book a free 30-minute call and I'll tell you exactly which programs you qualify for and what they mean for your purchase.
Jason L. Esposito | NMLS# 308764 | Hoot Home Loans NMLS# 2532931 | CA-DFPI | TX-SML | FL-OFR | Equal Housing Opportunity. Not a commitment to lend.