Texas Down Payment Assistance: TSAHC, TDHCA, and What Buyers Should Compare

What TSAHC and TDHCA are

TSAHC, the Texas State Affordable Housing Corporation, is a nonprofit corporation created by the state to expand affordable housing opportunities. It runs two home loan programs that pair a 30-year fixed-rate first mortgage with down payment assistance: the Home Sweet Texas Home Loan Program, open to low- and moderate-income Texas buyers, and the Homes for Texas Heroes Home Loan Program, for qualifying public-service workers such as teachers, police officers, firefighters, EMS personnel, and veterans.

TDHCA, the Texas Department of Housing and Community Affairs, is the state's housing agency. Its umbrella program, the Texas Homebuyer Program, includes My First Texas Home for first-time buyers and My Choice Texas Home for buyers who do not meet first-time status, along with a Texas Mortgage Credit Certificate program. Both agencies deliver their assistance through approved participating lenders, so you do not apply to TSAHC or TDHCA directly; you work through a lender who participates in the program.

The kinds of assistance they offer

The assistance from these programs usually comes in one of three shapes, and it is almost always paired with a specific first-mortgage program. Knowing which shape you are looking at tells you the most important thing: whether, and when, the money comes back.

In both agencies' programs, assistance is commonly structured as up to 5% of the loan amount, often between 3% and 5%, applied toward the down payment and sometimes closing costs. Some programs also offer a Mortgage Credit Certificate, a federal income tax credit on part of the mortgage interest you pay, which can be paired with the loan for buyers who qualify. The exact percentages, forms, and pairings change over time, so treat these as the general shape of the programs, not the current terms.

What to compare across programs

Two programs can look similar and still produce very different answers for the same buyer. These are the six things to compare before you plan around any program:

• Income limits. Most programs cap household income, usually as a limit set for your county and household size, so the same income can qualify in one county and not another.
• Purchase price limits. Programs set a maximum purchase price for the home, also county-specific, and sometimes different for new construction and existing homes.
• Eligible loan types. Assistance pairs with specific first mortgages, commonly FHA, VA, USDA, and HFA conventional. Some forms of assistance are only available with certain loan types.
• Grant vs. loan. Is the money a grant, a forgivable loan, or a repayable loan? When would repayment be due, and what happens if you sell before the forgiveness period ends?
• Homebuyer education. Both agencies require an approved homebuyer education course before closing. It is a real step, so plan time for it.
• Funding availability. Programs are funded in cycles and the money can run out. A program that exists this month may pause or reopen later, so availability is checked at the time you apply, not when you read about it.

First-time buyer status is another variable: some programs require it, some do not. TSAHC's down payment assistance is currently open to repeat buyers, with first-time status needed only for the Mortgage Credit Certificate. TDHCA's My First Texas Home requires first-time status, while My Choice Texas Home is open to repeat buyers. The definition of first-time buyer also varies, so check the specific program's rules rather than assuming you are in or out.

How to check whether a home qualifies

Program boundaries apply to the property as well as the buyer. Income limits and purchase price caps are set by county, and some programs target specific areas or census tracts, so the exact address of the home is part of the eligibility question. The same buyer can qualify for a program on one side of a county line and not the other.

A Katy mailing address is a good example of why this matters. Katy is a large community that spans multiple counties, and a mailing address alone does not tell you which county the property actually sits in, let alone whether it falls inside a given program's eligible area. You verify the property's exact address, county, and any program-specific boundaries against the current program rules before you count on the assistance. Most programs also require the home to be your primary residence, so a second home or investment property will not qualify.

Why working with a lender who knows these programs matters

Program details change, funding runs out, and the assistance has to be layered correctly with your first mortgage. The assistance typically sits as a second lien on the property, and some first-mortgage programs and lenders have rules about subordinate financing, so the loan officer has to structure the two together or the combination falls apart at underwriting.

Because you cannot apply to TSAHC or TDHCA directly, the lender is the one who has to be approved to participate in the program and who confirms the current income limits, price caps, and funding status for your county. A loan officer who works with these programs regularly knows which ones are active, which loan types they pair with, and which you are likely to qualify for, and can tell you honestly when a program does not fit. Kladi works with borrowers nationwide and confirms the programs available in the state where the property is, so the first question is always where the home is or will be.

A labeled example: TSAHC-style assistance on a $250,000 home

This is an illustration in the style of a TSAHC program, not a real offer. It shows how the pieces fit together, and every number here must be verified with the current program guidelines and your lender.

Illustration only: this is a made-up example in the style of a TSAHC program, not a real offer or a quote. Actual program terms, income limits, price caps, loan-type pairings, and funding availability change and must be verified with the current program guidelines and your lender.

Key takeaways

• Texas down payment assistance comes through agencies like TSAHC and TDHCA, each running several programs with different rules, and you apply through an approved participating lender, not the agency directly.
• Compare income limits, purchase price caps, eligible loan types, and whether the assistance is a grant, a forgivable loan, or a repayable loan, plus homebuyer education and funding availability.
• The property has to qualify too: verify the exact address and county against program boundaries, because a mailing address alone does not place a home inside a program's eligible area.
• Program details change and funding runs out, so confirm the current rules with a lender who works with these programs before you plan your numbers around a specific figure.

Frequently asked questions

Can I use Texas down payment assistance with an FHA loan?

Often, yes. Many TSAHC and TDHCA programs pair with FHA and other government loans, and TSAHC's grant form of assistance is currently tied to government loans like FHA, VA, or USDA. Some programs only work with certain loan types, so the reliable answer comes from checking the current program guidelines for the specific combination you have in mind.

Do these programs cover closing costs too?

Yes, in many cases. Assistance from these programs can be applied toward the down payment, closing costs, or a combination of both, depending on the program. The exact split is part of what you confirm with the lender and the program before you plan your cash to close.

Do I have to be a first-time buyer to qualify?

Not always. TSAHC's down payment assistance is currently open to repeat buyers, with first-time status required only for its Mortgage Credit Certificate. TDHCA's My First Texas Home requires first-time status, while My Choice Texas Home is open to repeat buyers. Check the specific program's rules rather than assuming you are in or out.

Primary sources

• TSAHC: Homebuyer Programs
• TSAHC: Loans and Down Payment Assistance
• TDHCA: The Texas Homebuyer Program
• HUD: Buying a Home
• CFPB: Determine your down payment
• CFPB: Special loan programs