The Best First-Time Homebuyer Programs in Texas

“I don’t have enough saved for a down payment” is what I hear most from buyers who delay calling me. However, in almost every case, it isn’t actually true. In fact, Texas runs several state, federal, and local programs that stack grants, forgivable loans, and below-market financing. They sit right on top of a standard FHA, VA, USDA, or conventional mortgage. Moreover, many of my first-time buyers in Austin, Round Rock, Bastrop, and Elgin qualify for more than one at once. Once we’ve worked out your basic down payment math, this is the layer I walk you through next. That’s because knowing your loan tier only matters once you know which programs will actually help pay for it.

TSAHC: Grants for Heroes and Everyday Buyers

First of all, the Texas State Affordable Housing Corporation runs two programs I bring up with almost every first-time buyer. Homes for Texas Heroes is reserved for teachers, school staff, firefighters, police and EMS, corrections officers, and veterans. Home Sweet Texas, on the other hand, covers all other income-qualified buyers. Both offer down payment assistance in tiers of 2%, 3%, 4%, or 5% of your loan amount. You choose the form: a grant you never repay, or a second lien that’s fully forgiven after three years. However, that forgiveness only applies as long as you don’t sell or refinance. In addition, you’ll need a 620 credit score on a government-backed loan (640 on conventional). You’ll also complete a short homebuyer education course before closing. First-time buyers can also stack on a Mortgage Credit Certificate, which is a federal tax credit. It’s worth 15% of your yearly mortgage interest for the life of the loan).

TDHCA’s Texas Homebuyer Program

Similarly, the Texas Department of Housing and Community Affairs runs a parallel option through its Texas Homebuyer Program. My First Texas Home requires first-time buyer status, though qualifying veterans are exempt. It pairs a low-interest 30-year mortgage with down payment assistance. Meanwhile, My Choice Texas Home offers the same help with no first-time requirement. That’s useful if you’ve owned before but need support now (Texas Department of Housing and Community Affairs, 2026).

For example, in Travis County, current income limits run from about $107,500 up to $134,400 or higher. The exact limit depends on the program and your household size. That’s well above what most buyers assume disqualifies them. So it’s always worth checking before you rule it out.

VA Loans and the Texas Veterans Land Board

If you’ve served, then Austin’s veteran community has real financial firepower behind it. To begin with, a VA loan lets eligible veterans, active-duty service members, and surviving spouses buy with 0% down. It also comes with no monthly mortgage insurance. On top of that, the Texas Veterans Land Board offers its own below-market home loan, up to $832,750. The rate resets weekly, with an extra discount for a 30%-or-higher VA disability rating (Texas General Land Office, 2026). The VLB also runs separate land loans and home improvement loans. In many cases, you can combine VLB financing with your VA loan benefits. So it’s worth a conversation with your lender before you assume you only qualify for one.

USDA Loans: Zero Down Outside Austin

Alternatively, buyers looking outside Austin’s urban core may qualify for a USDA Guaranteed Loan. That includes much of Elgin, rural Bastrop County, and Dale. This loan finances 100% of your purchase price with no down payment at all (U.S. Department of Agriculture Rural Development, 2026). Eligibility is address-specific, so check the exact property on USDA’s online eligibility map. Don’t assume based on the town alone. Also, household income can’t exceed 115% of the area median. USDA doesn’t set an official minimum credit score, though most participating lenders use 640 as a practical benchmark.

Local Help From the City of Austin

Finally, the City of Austin adds its own help on top of state and federal programs. It offers up to $40,000 toward your down payment and closing costs. The home must be inside city limits and priced at $440,000 or below (City of Austin Housing Department, 2026). Income limits run from about $74,800 for a single applicant up to $115,350 for a household of five. You’ll also need to complete an approved homebuyer education course. Because this is a local program, it can often be layered on top of a TSAHC or TDHCA loan. Therefore, it’s always worth asking your lender to check both at once.

Stacking More Than One Program

Here’s what surprises most buyers, though: these programs aren’t either-or. For instance, a teacher buying in Austin could pair Homes for Texas Heroes with a Mortgage Credit Certificate. She could potentially add the City of Austin’s local funds too. Of course, she’d need to meet each program’s own income and property requirements. Indeed, I’ve walked clients through combinations like this more than once. Most importantly, it’s often the difference between a comfortable move-in and an empty savings account afterward. Still, the catch is that stacking takes a lender who actually works with these programs regularly. For this reason, I always recommend checking with one before you assume you qualify for a single program.

Comparing Your Options at a Glance

A Few Quick Questions, Answered

Do I have to be a first-time buyer for these programs?

Not always. My Choice Texas Home and Home Sweet Texas don’t require it. However, My First Texas Home and the City of Austin’s program generally do.

Is this a grant or a loan I’ll have to repay?

Your choice. Specifically, TSAHC and TDHCA both let you pick a true grant or a forgivable loan. The loan disappears after three years if you stay in the home.

What credit score do I actually need?

In general, most programs set a 620 minimum on government loans (640 on conventional). USDA, on the other hand, has no official minimum at all.

Let’s Find the Right Program for You

Overall, every buyer’s income, credit, and target neighborhood changes which of these programs actually fit. Several of them can be combined in ways that aren’t obvious until we sit down together. Has “I can’t afford the down payment” been holding you back? If so, let’s talk it through before you count yourself out.

Irma D. Lozano
Real Estate Advisor
512-801-0535