Stacking TSAHC DPA With an FHA Loan in Austin: A Worked Example
The median sold price in the Austin metro was $435,000 in the latest Team Price Real Estate report, published August 7, 2026. At that price, the minimum 3.5% down payment on an FHA loan (a mortgage insured by the Federal Housing Administration) comes to $15,225. Add a realistic $11,000 in closing costs and prepaid items and a buyer needs roughly $26,225 in cash before getting keys. That number stops more Austin buyers than the monthly payment does. The Texas State Affordable Housing Corporation (TSAHC) runs a down payment assistance program, Home Sweet Texas, that can cover most of it. Here is the actual math of stacking TSAHC assistance on an FHA first mortgage, line by line.
Key points:
- TSAHC down payment assistance ranges from 2% to 5% of your loan amount. On a $419,775 FHA loan, the 4% option is about $16,791.
- The assistance comes as a grant (never repaid) or a deferred forgivable second lien (repaid only if you sell or refinance within three years).
- Minimum credit score for the FHA option is 620, and you do not have to be a first-time buyer.
- In our worked example, cash to close drops from about $26,225 to about $9,434 with the 4% option.
- Income limits vary by county; check the current Travis County figure at tsahc.org before you plan around the program.
How much down payment assistance does TSAHC offer in Austin?
TSAHC’s Home Sweet Texas program offers assistance of 2% to 5% of your total loan amount, paired with an FHA, VA, or conventional first mortgage from a TSAHC-approved lender. On an FHA loan of $419,775, that means roughly $8,396 to $20,989. You choose the assistance as either a grant with no repayment or a deferred forgivable second lien that is forgiven after three years. The program serves both first-time and repeat buyers statewide, including all of Travis, Williamson, and Hays counties.
The percentage applies to the loan amount, not the purchase price, which matters for your math. The assistance must go toward your down payment first, then closing costs. You cannot receive any of it as cash back at closing.
If you work in a covered public-service profession, the companion Homes for Texas Heroes program works the same way; see our Homes for Texas Heroes guide for Austin buyers.
The worked example: FHA plus TSAHC at Austin’s median price
Here is the full stack at the Team Price median of $435,000, using the 4% assistance option.
- Purchase price: $435,000
- FHA minimum down payment (3.5%): $15,225
- Base loan amount: $419,775
- FHA upfront mortgage insurance premium (1.75%, financed): $7,346, bringing the total financed amount to $427,121
- TSAHC assistance at 4% of the loan amount: about $16,791
- Estimated closing costs and prepaids: $11,000 (illustrative; varies by lender, title company, and escrow setup)
The assistance covers the entire $15,225 down payment, and the remaining $1,566 goes toward closing costs. Here is what that does to cash to close at three assistance levels:
| Scenario | Assistance amount | Cash to close (est.) |
|---|---|---|
| FHA with no assistance | $0 | $26,225 |
| FHA + TSAHC 3% option | $12,593 | $13,632 |
| FHA + TSAHC 4% option | $16,791 | $9,434 |
| FHA + TSAHC 5% option | $20,989 | $5,236 |
All rows assume the same $11,000 in closing costs and prepaids; seller concessions or lender credits would move them. For what different down payment sizes cost over time, see our breakdown of 3, 5, 10, and 20 percent down in Austin.
Should you take the grant or the forgivable second lien?
Take the second lien if you expect to stay in the home at least three years, because it is forgiven entirely after that and it usually comes with a lower first-mortgage rate than the grant option. Take the grant if you may sell or refinance sooner, since the grant never has to be repaid no matter when you move. The lien option requires repayment of the assistance only if you sell or refinance within the first three years.
| Grant | Deferred forgivable second lien | |
|---|---|---|
| Repayment | Never | Only if you sell or refinance within 3 years |
| After 3 years | Nothing owed | Fully forgiven |
| Typical rate on the first mortgage | Slightly higher | Slightly lower |
| Best fit | Shorter or uncertain timelines | Buyers planning to stay put |
The rate difference matters because you pay it for as long as you hold the loan. If a refinance starts to look attractive inside the three-year window, the lien option would require paying the assistance back out of your equity. Run both versions before you lock anything in.
What stacking DPA does to your monthly payment
The assistance changes your cash to close, and your monthly payment stays roughly the same either way, because the loan amount does not shrink. Using the Freddie Mac Primary Mortgage Market Survey average of 6.65% for the week ending August 20, 2026 as an illustrative market reference:
- Principal and interest on $427,121 at 6.65% over 30 years: about $2,742
- FHA annual mortgage insurance (0.55%): about $192 per month
- Property taxes and homeowners insurance: commonly $900 or more per month combined on a $435,000 Travis County home, depending on exemptions and coverage
Two caveats. TSAHC program rates are set daily and differ from the survey average, with the grant option typically pricing a notch above the lien option. And rates may move before your lock date, in either direction. Treat every figure above as a planning reference. Current survey numbers are on our Austin mortgage rates page, updated weekly.
Who qualifies for Home Sweet Texas in Travis County?
You qualify for the FHA version of Home Sweet Texas with a credit score of 620 or higher, income under your county’s program limit, and a home purchase inside Texas. There is no first-time-buyer requirement. TSAHC also asks buyers to complete an approved home buyer education course before closing, which you can take online. Income limits are set by county and updated by TSAHC, so check the current Travis County limit at tsahc.org rather than relying on a figure from an older article.
Standard FHA rules still apply on top of the program: the property must meet FHA appraisal standards, your debt-to-income ratio (DTI, monthly debts divided by gross monthly income) must fit FHA guidelines, and the loan has to clear underwriting. New to FHA loans? Start with our overview of who FHA loans actually help in Austin.
Three things to check before you commit
The rate premium against the assistance size. Assistance percentage options and rate pricing interact. A 5% assistance option at a higher rate can cost more over a long hold than a 3% option at a lower rate. The right combination depends on how long you plan to keep the loan.
Your three-year outlook. The lien option’s forgiveness clock runs from closing. A relocation or early refinance inside that window turns free money into a repayment line on your settlement statement.
Whether you need the full stack at all. Some buyers with $26,000 available do better keeping cash reserves and using assistance anyway; others with strong savings may find a straight FHA or conventional loan prices better. At Mortgage Austin we run both versions side by side, and the answer changes from buyer to buyer, subject to credit, income, and property qualification.
Curious what the stack looks like at your price point and income? Schedule a discovery call and we’ll walk through your options together, no pressure, no commitment, just clarity.
Frequently Asked Questions
How much money can I get from TSAHC down payment assistance?
Assistance runs from 2% to 5% of your loan amount. On a $419,775 FHA loan at Austin’s median price, the 4% option is about $16,791 and the 5% option is about $20,989. The money goes to your down payment first, then closing costs.
Do I have to pay back TSAHC assistance?
Depends on which form you choose. The grant version is never repaid. The deferred forgivable second lien is repaid only if you sell or refinance within the first three years; after three years it is fully forgiven.
Can I use TSAHC assistance with an FHA loan?
Yes. Home Sweet Texas pairs with FHA, VA, and conventional first mortgages through TSAHC-approved lenders. The FHA version requires a credit score of 620 or higher, and the FHA loan itself still has to clear normal underwriting.
Do I have to be a first-time buyer to use Home Sweet Texas?
No. TSAHC’s down payment assistance is open to both first-time and repeat buyers. You do need to meet the credit score minimum and your county’s income limit, and the home must be in Texas.
Is there an income limit for TSAHC assistance in Austin?
Yes. Income limits are set by county and household size and are updated by TSAHC over time. Check the current Travis, Williamson, or Hays County figure directly at tsahc.org, since older articles often cite outdated limits.
Does TSAHC assistance cover closing costs too?
Yes, after your down payment is covered. In our example, the 4% option provides about $16,791: the first $15,225 covers the FHA down payment and the remaining $1,566 offsets closing costs. You cannot take any of the assistance as cash back.
Ferrando Financial LLC | 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, income, and property qualification. Rate figures are from the Freddie Mac Primary Mortgage Market Survey for the week ending August 20, 2026, and all payment and cash-to-close figures are illustrative, not a rate quote or loan offer. TSAHC program terms, assistance percentages, rates, and income limits are set by TSAHC, change over time, and are subject to program availability; verify current details at tsahc.org. Sources: Team Price Real Estate (August 7, 2026), Freddie Mac PMMS (week ending August 20, 2026), Texas State Affordable Housing Corporation (accessed August 2026).
