Texas operates one of the country’s most extensive down payment assistance networks, with more than 75 programs available statewide and two major state agencies — TSAHC and TDHCA — each offering up to 5% of the loan amount as grants or forgivable second mortgages. The Homes for Texas Heroes program provides enhanced assistance for teachers, first responders, and veterans, while the City of Austin adds up to $40,000 for income-qualifying buyers and Travis County layers a separate 4% to 6% forgivable loan on top. In fiscal year 2022 alone, the Texas Homebuyer Program provided over $1.7 billion in homeowner financing and down payment assistance. Here’s how to access it in 2026.
TSAHC Programs
The Texas State Affordable Housing Corporation operates two primary homebuyer programs, both offering the choice between a non-repayable grant and a forgivable second mortgage.
Home Sweet Texas Home Loan Program
Home Sweet Texas provides up to 5% of the loan amount as either a grant (no repayment required) or a zero-interest second mortgage that forgives after three years if the homeowner remains in the property. The program pairs with a 30-year fixed-rate mortgage at competitive rates, accepting HFA conventional loans and government-backed mortgages (FHA, VA, USDA).
The minimum credit score is 620 (640 for manual underwriting), the maximum DTI is 45%, and income limits are county-based, ranging from approximately $71,280 to $97,840 depending on location. The home must be a primary residence in Texas, and completion of a homebuyer education course is required.
The grant option is the standout feature. Unlike forgivable loans that carry conditions and potential repayment triggers, the grant requires no repayment under any circumstances — you can sell or refinance at any time without owing the assistance back. For buyers who may need to move within three years, the grant option eliminates that risk entirely.
Homes for Texas Heroes
Homes for Texas Heroes mirrors the Home Sweet Texas structure — 3% to 5% of the loan amount as a grant or forgivable second mortgage — but targets specific professions with dedicated eligibility. Qualifying professions include teachers, teacher aides, school librarians, school counselors, and school nurses; police officers and peace officers; firefighters; EMS personnel; county jailers and correctional officers; juvenile corrections officers; public security officers; nursing faculty members; and military veterans.
The credit score minimum is 620, and the program uses 30-year fixed-rate mortgages at competitive rates. Income limits are county-specific with expanded limits in targeted areas. The grant option carries no minimum occupancy requirement — a meaningful distinction for military members who may receive orders to relocate.
For Austin-area teachers and first responders, Homes for Texas Heroes offers one of the cleanest paths to homeownership assistance: a non-repayable grant of up to 5% with no strings attached beyond the initial qualification.
TDHCA Programs
The Texas Department of Housing and Community Affairs operates parallel programs that reach a broader eligible population.
My First Texas Home
My First Texas Home provides up to 5% of the mortgage loan amount as down payment assistance paired with a 30-year fixed-rate mortgage. The assistance can be structured as a grant or a deferred forgivable second lien with no monthly payments, and the balance forgives after three years if the buyer remains in the property.
The minimum credit score is 640, the maximum DTI is 43%, and income limits are county-specific based on 80% to 125% of the Area Median Family Income. First-time buyer status is required — no ownership of a principal residence in the past three years — and a HUD-approved homebuyer education course must be completed.
My Choice Texas Home
My Choice Texas Home extends assistance to repeat homeowners who don’t meet the first-time buyer definition. The program provides up to 5% of the mortgage loan amount as a 30-year, low-interest second mortgage, with a minimum credit score of 620, maximum DTI of 45%, and higher income limits than My First Texas Home (approximately $100,000 to $130,000 depending on county and family size).
For Austin buyers who already own a home and want to move up or relocate, My Choice removes the first-time buyer restriction that limits most DPA programs.
Austin and Travis County Programs
City of Austin Down Payment Assistance
The City of Austin provides up to $40,000 for down payment, closing costs, and prepaid expenses as a forgivable loan. Income limits for 2025 set the threshold at $55,400 for a single person and $78,750 for a family of four (80% of MFI), with limits adjusted annually. The home must be purchased within Austin city limits at a price under $614,054.70, and the buyer must not have owned a home in the past three years.
The $40,000 maximum is among the most generous city-level DPA programs in Texas. On a $400,000 home, $40,000 covers a 10% down payment — enough for conventional financing with favorable PMI terms. Contact the City of Austin Neighborhood Housing and Community Development (NHCD) for current application windows and requirements.
Hill Country Home Down Payment Assistance
The Travis County Housing Finance Corporation’s Hill Country Home program provides 4%, 5%, or 6% of the initial principal loan balance as a zero-interest, 10-year forgivable second mortgage. The minimum credit score is 640, the maximum DTI is 45%, and eligible loan types include FHA, VA, USDA-RD, and Freddie Mac HFA Advantage.
The program covers the entire Travis County, including the City of Austin, and is not restricted to first-time buyers. The 10-year forgiveness period is longer than the three-year windows on TSAHC and TDHCA programs, but the 6% maximum is higher than most state options. On a $450,000 home, 6% equals $27,000 in forgivable assistance.
Federal Loan Programs in Texas
FHA Loans
FHA loans require a minimum 3.5% down payment with a credit score of 580 or above (620–640 through state programs). Texas has no additional state-level restrictions on FHA use, and the 5% DPA from TSAHC or TDHCA covers the entire 3.5% down payment with room for closing costs.
VA Loans
VA loans provide zero-down financing for veterans and active-duty military. Texas’s large military population — Fort Cavazos, Joint Base San Antonio, Fort Bliss — generates significant VA demand, and the Homes for Texas Heroes grant stacks on top of VA’s zero down for closing cost coverage.
USDA Loans
USDA loans offer 100% financing in designated rural and suburban areas. While Austin’s core is excluded, surrounding areas in eastern Travis County, Williamson County, Hays County, and Bastrop County include USDA-eligible zones within commuting distance.
How to Apply
TSAHC programs start with a quick eligibility quiz at tsahc.org that determines which programs fit your situation. From there, you connect with a participating lender from TSAHC’s approved network. TDHCA programs follow a similar path through welcomehome.tdhca.texas.gov. Both agencies require a HUD-approved homebuyer education course before closing.
For the City of Austin program, contact the Neighborhood Housing and Community Development department directly. For the Hill Country Home program, Travis County’s Housing Finance Corporation maintains a lender list at corporations.traviscountytx.gov.
Stacking for Maximum Benefit
Austin buyers have one of the richest stacking opportunities in the state. A first-time buyer earning below 80% of MFI could potentially combine the City of Austin DPA ($40,000) with TSAHC Home Sweet Texas (5% grant) — totaling well over $50,000 in combined assistance on a home within Austin city limits. A teacher could access Homes for Texas Heroes (5% grant) plus the Hill Country Home program (up to 6% forgivable) for combined assistance approaching 11% of the purchase price.
The distinction between grants and forgivable loans matters for stacking: grants from TSAHC require no repayment regardless of future actions, while forgivable loans from the City of Austin and Hill Country Home carry occupancy and timing requirements. Understanding which programs impose conditions and which don’t allows you to optimize the total package.
Texas’s $1.7 billion annual commitment to homebuyer assistance reflects a state that has invested heavily in making homeownership accessible. The programs exist, the money is available, and the application processes are straightforward — the main barrier is awareness.
For more on the Austin housing market, explore our housing market update and how much house you can afford in Austin guide.