Texas First-Time Home Buyer Programs and Assistance

Who qualifies as a first-time buyer in Texas

“First-time buyer” has a specific meaning, and it’s broader than most people expect. TDHCA’s program matrices define a first-time homebuyer as someone who hasn’t owned and occupied a primary residence during the last three years. That applies to every borrower and to a non-purchasing spouse. Fannie Mae uses the same three-year test for its 3%-down conventional loans.

Two groups are exempt from TDHCA’s first-time requirement:

• Veterans honorably discharged, as shown on a DD-214, who haven’t already used the veteran exemption on a bond-financed mortgage
• Buyers purchasing in a qualified targeted census tract

Some programs don’t require first-time status at all. TDHCA’s My Choice Texas Home and TSAHC’s programs are open to repeat buyers. Most programs require a primary residence, household income and purchase price within county limits, a minimum credit score and a homebuyer education course.

TDHCA: My First Texas Home, My Choice Texas Home and the Mortgage Credit Certificate

The Texas Department of Housing and Community Affairs (TDHCA) runs the Texas Homebuyer Program through participating lenders.

My First Texas Home

The My First Texas Home program is TDHCA’s first-time buyer loan. According to the program matrix published August 17, 2026:

• Loan: 30-year fixed-rate FHA, VA or USDA loan
• Assistance: 2% to 5% of the total loan amount, subject to available funds, as a 0% interest second lien with no monthly payment. You choose a 30-year deferred loan due when you sell, refinance or pay off the first lien, or a 3-year deferred loan forgiven after 36 months if you stay current and keep the home as your primary residence.
• Credit: 620 minimum middle score. DTI follows the automated findings, with a 45% maximum on manual underwriting.
• Education: a HUD-certified homebuyer education course for every borrower
• Property: single-family, condo, PUD, eligible manufactured homes and owner-occupied duplexes in Texas. You must move in within 60 days of closing.
• Insurance: maximum 2% hazard deductible and 5% for wind or hail
• Possible recapture tax if you sell within the federal recapture period, since the loan is bond-financed

My Choice Texas Home

My Choice Texas Home offers the same down payment assistance options without the first-time buyer requirement, and it’s available with conventional loans (Fannie Mae HFA Preferred and Freddie Mac HFA Advantage) as well as FHA, VA and USDA.

Texas Mortgage Credit Certificate (MCC)

A Mortgage Credit Certificate turns part of your mortgage interest into a dollar-for-dollar federal tax credit, claimed each year on IRS Form 8396. TDHCA’s rate notice dated October 16, 2026 lists a 15% MCC credit rate. You can get it two ways:

• Combo: with a My First Texas Home loan, with a $400 issuance fee (waived for military)
• Standalone: with an outside first mortgage from a participating lender, including conventional loans, with a $1,000 issuance fee plus a $225 compliance fee. There’s no minimum credit score for the MCC itself, and temporary buydowns aren’t allowed on the first lien.

Income and purchase price limits

TDHCA’s limits took effect July 13, 2026. Selected areas:

Higher limits apply in targeted census tracts. Household income counts everyone who will sign the deed of trust, including a non-purchasing spouse.

TSAHC: Homes for Texas Heroes and Home Sweet Texas

The Texas State Affordable Housing Corporation (TSAHC) is a nonprofit created by the Texas Legislature. Its two home loan programs work the same way. The difference is who qualifies.

• Homes for Texas Heroes: full-time public school teachers, teacher aides, librarians, counselors and nurses; peace officers and public security officers; firefighters and EMS personnel; corrections and juvenile corrections officers; county jailers; nursing and allied health faculty; and veterans. First-time and repeat buyers can qualify.
• Home Sweet Texas: low- and moderate-income buyers who don’t fall into a hero profession

Both offer a fixed-rate mortgage with down payment assistance of up to 5% of the loan amount, as a grant that never has to be repaid, a second lien forgiven after three years if you don’t sell, refinance or move out, or a deferred repayable second lien. TSAHC lists a 620 minimum credit score on government loans and 640 on conventional loans, and every buyer must complete an approved homebuyer education course. First-time buyers can add a TSAHC MCC worth 15% of annual mortgage interest. Texas Heroes who combine TSAHC down payment assistance with an MCC get the MCC free, a $400 savings.

Worked example: My First Texas Home on a $285,000 Houston-area home

A household of three earning $95,000 buys a $285,000 home in Harris County, under the $119,600 income limit and $566,354 price limit. They use an FHA loan with 5% TDHCA assistance on a 30-year deferred second lien. Rates come from TDHCA’s October 16, 2026 rate notice and change daily. Taxes at an assumed 2.0% combined rate and $250 a month for insurance are estimates, not a quote.

The assistance costs this buyer about $94 a month in higher principal and interest, in exchange for roughly $14,000 they don’t have to save. The combo option with an MCC carried a 7.750% rate on the same date, or about $2,005 a month in principal and interest. The 15% MCC on roughly $21,600 of first-year interest is a tax credit of about $3,240, around $270 a month, if the buyer owes enough federal income tax to use it. Run your own numbers with a tax adviser.

City and county down payment assistance

Several Texas cities fund their own down payment assistance, usually for households at or below 80% of area median income, with a homebuyer education requirement. These programs change often, so confirm current terms before you write an offer.

In Amarillo and the Panhandle, most buyers rely on the statewide TDHCA and TSAHC programs. Check with your city’s community development office for any local funds.

Loan types first-time Texans use

FHA is the most common choice for first-time buyers with scores in the 600s. Herring’s FHA loans for Texas homebuyers page covers requirements, and veterans should start with Texas VA home loans, since 0% down usually beats any assistance program. For a full breakdown of minimums, see how much down payment you need for a house.

Texas costs first-time buyers miss: property taxes, insurance, survey and option fee

• Property taxes. Texas has no state income tax, but local property taxes are high and go into your monthly escrow. Use the actual rate for the address, including MUD or PID assessments.
• Homestead exemption. After you move in, file for the residence homestead exemption with your county appraisal district. School districts must exempt $140,000 of your home’s value, per the Texas Comptroller. Read how the Texas homestead exemption works.
• Homeowners insurance. Wind and hail coverage is expensive in much of Texas. TDHCA caps the hazard deductible at 2% and the wind or hail deductible at 5%.
• Option fee. Under the TREC resale contract, you pay a negotiated option fee within three days of the effective date for the right to back out during the option period. You lose it if you terminate, but it’s credited to the price if you close.
• Earnest money. Also due within three days, held by the title company and credited at closing.
• Survey. Many Texas purchases need a new survey unless the seller’s existing survey is acceptable to the title company.
• Inspections. Schedule them inside the option period.

Our guide to typical closing costs in Texas has line-by-line estimates.

From preapproval to closing in Texas

1. Check your credit and budget. Program floors are 620 for most Texas assistance. Read the credit score you need to buy a house in Texas.
2. Take homebuyer education. TDHCA and TSAHC both require it, and many city programs require a HUD-approved course.
3. Get preapproved with a lender that participates in the program you want. See our mortgage preapproval guide for documents.
4. Shop within the price and income limits for your county.
5. Write the offer on the TREC resale contract with the Third Party Financing Addendum, and negotiate the option period and any seller-paid closing costs.
6. Inspect, appraise and lock your rate and assistance reservation.
7. Close at the title company, then file your homestead exemption.

For the full sequence, see how to get a mortgage in Texas, step by step, Herring’s first-time home buyer’s guide and our Texas mortgage page.

Herring Bank NMLS #415783 | Member FDIC | Equal Housing Lender. This article is for educational purposes only and does not constitute financial, legal or tax advice. It is not a commitment to lend. State and city program terms, limits and funding change frequently; confirm current terms with the program administrator. Payment examples use assumed taxes and insurance and are not a quote.