First-Time Homebuyer Programs and Incentives in Texas
Texas has some of the most robust first-time homebuyer assistance programs in the country — and many qualified buyers don’t even know they exist. If you’re buying your first home (or haven’t owned one in the past three years), there are programs specifically designed to help you bridge the gap between renting and owning.
What Counts as “First-Time Homebuyer” in Texas?
Under most Texas programs, you qualify as a first-time homebuyer if you haven’t owned a primary residence in the past three years. That means even if you’ve owned before, you may still be eligible after a gap in ownership.
TSAHC: Texas State Affordable Housing Corporation
Home Sweet Texas Program
TSAHC’s Home Sweet Texas program provides down payment assistance up to 5% of the loan amount — structured as a grant (no repayment required) or a second lien (paid off when you sell or refinance). The grant option is the most attractive for cash-strapped buyers. In Travis County, income limits are typically in the $90,000-$100,000+ range, making this accessible to a significant portion of first-time buyers.
Homes for Texas Heroes
If you work in a qualifying profession — teachers, police, firefighters, EMS, corrections officers, veterans, or nurses — the Heroes program offers the same assistance structure with potentially better interest rates. This is an underutilized benefit for public servants and healthcare workers.
TDHCA: Texas Department of Housing and Community Affairs
My First Texas Home
This program pairs a 30-year fixed rate mortgage at a competitive interest rate with down payment and closing cost assistance up to 5% of the loan amount. The assistance comes as a no-interest second lien that’s forgiven over time if you stay in the home — or paid back when you sell or refinance.
Texas Mortgage Credit Certificate (MCC)
An MCC is a federal tax credit worth up to 20% of the mortgage interest you pay each year. For a buyer paying $12,000 annually in mortgage interest, that’s a $2,400 direct reduction in federal taxes owed — every year you live in the home. MCCs are issued by TDHCA and can be combined with TSAHC and TDHCA assistance programs for maximum benefit.
Federal Programs Available in Texas
FHA Loans: Low Down Payment, Flexible Qualification
FHA loans require just 3.5% down for buyers with a 580+ credit score. They’re popular with first-time buyers because of flexible debt-to-income guidelines and acceptance of gift funds for down payments.
HomeReady and Home Possible
Fannie Mae and Freddie Mac conventional programs that allow 3% down payments for qualifying first-time buyers, with reduced PMI rates and flexible income guidelines. For buyers with strong credit, these often beat FHA on total cost.
VA Loans for Veterans and Service Members
If you’ve served in the military, a VA loan offers zero down payment, no monthly mortgage insurance, and typically competitive rates. Texas has one of the largest veteran populations in the country, and VA loans are significantly underutilized. Ask us whether you qualify.
How to Access These Programs
Most Texas assistance programs must be accessed through an approved lender. We’re positioned to help you navigate TSAHC, TDHCA, and federal programs, compare your options, and find the combination that puts the most money back in your pocket. Start with a free quote.
Frequently Asked Questions
Do Texas first-time homebuyer programs have income limits?
Yes, most programs have income limits that vary by county and household size. In the Austin area, many professionals earning under $100,000 individually qualify. We can check your specific eligibility in minutes.
Can I combine TSAHC down payment assistance with an FHA loan?
Yes. TSAHC assistance can be paired with FHA, conventional, VA, and USDA loans. We help you identify the combination that minimizes out-of-pocket costs and total loan cost.
What’s the difference between a down payment grant and a second lien?
A grant doesn’t have to be repaid. A second lien is a loan that’s either forgiven over time or repaid when you sell/refinance. Grants are more attractive but may come with slightly higher rates on the first mortgage.
Is there a first-time homebuyer tax credit at the federal level?
The Mortgage Credit Certificate (MCC) functions as an ongoing tax credit. Consult a tax advisor for current federal tax provisions.
I owned a home 5 years ago. Do I qualify as a first-time buyer?
Yes — under most program definitions, you qualify if you haven’t owned a primary residence in the past three years. Let’s check your eligibility.
Ferrando Financial LLC | Mortgage Austin | NMLS# 2403080
Licensed in Texas. This content is for educational purposes only and does not constitute a commitment to lend. Loan approval is subject to credit approval and program guidelines. Rates and terms vary and are subject to change without notice.
