3 of the Best First-Time Home Buyer Assistance Programs in Texas

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Home values in Texas are below the national average, but that doesn’t make it easier to buy one. Learn what programs are available to help you with your first mortgage. 

Everything is bigger in Texas, as they say, but one thing is surprisingly not-so-big: home values. According to Zillow, the average home value in Texas is about $300,000 in 2023, which is well below the national average of $348,000. That’s not so bad, considering that homes in some states, like California, can be more than double the national average.

First-time home buyers, however, might still find it difficult to save enough down payment for a $300,000 house, let alone pay 2% to 5% of the home purchase in closing costs. If that’s the case, just know the Texas Department of Housing and Community Affairs (TDHCA) and the Texas State Affordable Housing Corporation (TSAHC) offer assistance programs to make your first mortgage more affordable. Let’s take a look at the top three.

1. TDHCA My First Texas Home

What is it? A low interest 30-year fixed-rate mortgage. You may also get up to 5% of the mortgage amount in down payment and closing cost assistance.

How does it help? Snagging a low interest rate can make your monthly mortgage payments more affordable. The 5% in down payment and closing cost assistance can also boost your savings.

Who’s it for? First-time home buyers with a minimum credit score of 620 who meet income requirements and are purchasing eligible properties. You also need to work with a lender who has been approved by the Texas Homebuyer Program.

2. TSAHC Home Sweet Home Loan Program

What is it? A 30-year fixed-rate mortgage with up to 5% in down payment assistance.

How does it help? The 5% in down payment assistance can come as a grant (which you don’t have to pay back) or as a deferred second mortgage, which is forgiven after three years, so long as you don’t sell or refinance.

Who’s it for? Home buyers who meet certain income requirements and who are buying properties below the price limits set by TSAHC. You can take TSAHC’s eligibility quiz to see if you qualify.

3. TSAHC Homes for Texas Heroes Program

What is it? A mortgage assistance program for veterans and public service professionals. It’s nearly identical to Home Sweet Home, except that it also offers $500 in savings via a free Mortgage Credit Certificate (MCC).

How does it help? Like Home Sweet Home, you can get down payment and closing cost assistance in the form of a grant or forgivable second mortgage. In addition, TSAHC will pay for the fees associated with applying for a Mortgage Credit Certificate (MCC). A MCC gives you 20% of what you spend on mortgage interest each year as a tax credit, effectively reducing your mortgage rate.

Who’s it for? Professional educators, law enforcement officers, firefighters and EMS personnel, veterans and active military, correction and juvenile correction officers, and healthcare workers.

Other ways first-time home buyers in Texas can save

In addition to the assistance programs listed above, individual cities in Texas may also offer help in the form of second mortgages, deferred loans, and grants. Federal first-time home buyer programs are also available, as are low or no down payment mortgages, such as:

FHAVAUSDA

All in all, if you’re looking for an affordable home in Texas, using a combination of grants, government-backed loans, and assistance programs can lower the bar of entry and help you buy your first house.

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