Texas down payment information comes from state programs, local housing authorities, and nonprofit lenders, not from a single state fund

Texas does not operate a single statewide down payment information program. Instead, help comes through several separate channels: the Texas State Affordable Housing Corporation (TSAHC), which runs the Home Options for Middle Income Empowerment (HOME) program; local housing finance agencies in major cities; and nonprofit lenders certified to work with federal and state money. Which programs you can reach depends on where you live, your income, and whether you are a first-time buyer.

The largest and most widely available is TSAHC's HOME program, which provides down payment and closing cost information to buyers earning 80 percent or less of area median income. It works by partnering with approved lenders across the state — you do not explore to TSAHC directly, but through a lender who participates in the program. The lender handles the paperwork, and TSAHC funds flow through them to your transaction.

Beyond that, cities like Houston, Dallas, Austin, and San Antonio run their own programs through local housing authorities or community development departments. These often have lower income limits and smaller service areas than TSAHC, but may offer larger information amounts or fewer restrictions on property type.

Key Takeaways

  • TSAHC's HOME program is the largest statewide option and works through approved lenders, not a direct process to the state.
  • You must be a first-time homebuyer or meet specific criteria (such as being a teacher or veteran) to use most Texas programs.
  • Income limits vary by program and by county, typically capping at 80 percent of area median income, which ranges from roughly $50,000 to $85,000 depending on location.
  • Local housing authorities in major Texas cities often have separate programs with different terms, so checking your city's housing department is necessary even if you do not may have access to for TSAHC.
  • information is usually structured as a grant or forgivable loan, meaning you do not repay it or repay it only if you sell the home within a set period.

How TSAHC's HOME program structures down payment help

TSAHC's HOME program offers up to 5 percent of the loan amount for down payment information and up to 2.5 percent for closing costs, though the exact amounts vary by lender and by the specific HOME product they offer. The information comes as a grant, which means you do not repay it. You keep the money even if you sell the home later.

To use HOME, you work with a lender who has signed up as a HOME partner. That lender underwrites your mortgage normally — you still need to may have access to for the loan on your own income and credit. The HOME information sits on top of that. Once your loan is approved, the lender submits the HOME paperwork to TSAHC, and TSAHC sends the funds to close the transaction. The whole process adds roughly two to four weeks to a standard closing timeline.

Income limits for HOME are set at 80 percent of area median income for the county where the property is located. In rural Texas counties, that might be $50,000 to $55,000 for a single person. In Travis County (Austin), it is roughly $75,000. In Harris County (Houston), it is roughly $80,000. These figures change annually, and the lender you work with will have the current limits for your county.

Local and city-specific programs in major Texas metros

Houston's Housing and Community Development Department runs the Down Payment information Program, which offers grants up to $40,000 for first-time buyers earning up to 80 percent of area median income. Dallas has the Dallas Housing Finance Corporation, which offers similar information through the HOME program and additional local funds. Austin's Community Development Department runs programs through the Austin Housing Finance Corporation. San Antonio's Housing Trust Fund provides down payment help for buyers in specific neighborhoods.

These local programs often have shorter waitlists than TSAHC during certain periods, but they also have smaller budgets and may close to new applications when funds run low. Some are tied to specific neighborhoods or property types — for example, San Antonio's program may prioritize properties in areas targeted for revitalization. You explore through the city's housing department or through an approved lender in that city.

The advantage of local programs is that they sometimes have higher information amounts or lower income thresholds than TSAHC. The disadvantage is that they are harder to find and their rules change more often. Your best starting point is your city's housing authority or community development department website, or calling 211 (a free referral service) and asking what down payment programs serve your area.

First-time buyer requirements and who qualifies

Most Texas down payment information programs require you to be a first-time homebuyer, defined as someone who has not owned a home in the past three years. Some programs have exceptions: teachers, nurses, firefighters, and military members may may have access to even if they have owned before. TSAHC's HOME program and most local programs follow the three-year rule.

You must also meet income limits (usually 80 percent of area median income), have a credit score of at least 620 (though 640 or higher is more common), and be able to document stable employment or income for the past two years. Self-employed buyers can use these programs but need to provide two years of tax returns and a profit-and-loss statement.

The property itself must be your primary residence — you cannot use down payment information to buy a second home or investment property. The home must also meet minimum property standards, meaning it cannot be in severe disrepair. An appraisal and inspection are part of the mortgage process, and the lender will flag any major issues.

How to find and explore through an approved lender

For TSAHC's HOME program, you do not explore to TSAHC first. Instead, you find a lender who participates in HOME, get pre-approved with them, and they handle the HOME process as part of your mortgage process. TSAHC publishes a list of approved lenders on its website, organized by region. You can search by county or by lender name.

When you contact a lender, tell them you are interested in the HOME program. Not all loan officers at a participating lender will be familiar with it, so you may need to ask specifically for someone who handles HOME loans. The lender will explain the current information amounts, income limits for your county, and what documents you need to bring.

For local programs, contact your city's housing authority or community development department directly. They will tell you whether the program is currently open, what the income and credit requirements are, and whether you need to work with a specific lender or can choose your own. Some cities require you to attend a homebuyer education class before you can explore — this is usually free and takes four to eight hours.

Forgivable loans versus grants and what happens if you sell

Most Texas down payment information comes as a grant, which you never repay. TSAHC's HOME program is structured this way. Some local programs, particularly in smaller cities, offer forgivable loans instead. A forgivable loan is money you borrow but do not have to repay as long as you stay in the home for a set period — usually five to ten years. If you sell before that period ends, you repay the remaining balance from your sale proceeds.

The difference matters if you think you might move. With a grant, you keep the money regardless. With a forgivable loan, selling early costs you. For example, if you receive a $30,000 forgivable loan with a ten-year term and you sell after five years, you might owe back $15,000 from your sale proceeds. The lender or program will explain the exact terms before you close.

Ask your lender or program administrator which structure applies to the information you are receiving. This should be spelled out in your loan documents before closing, not discovered afterward.

Income limits, debt-to-income ratios, and other qualification details

Income limits for down payment information programs are set as a percentage of area median income (AMI) for your county. Most programs cap at 80 percent AMI, though some go higher. The lender or program will calculate your household income by adding all sources: wages, self-employment, Social Security, disability, child support, and alimony. Investment income and rental income are usually included too.

Beyond income, lenders will look at your debt-to-income ratio (DTI), which is your total monthly debt payments divided by your gross monthly income. Most programs require a DTI of 50 percent or lower, meaning your mortgage payment plus all other debts cannot exceed half your monthly income. Some lenders will go to 55 percent if you have strong credit and savings.

You will also need to show that you have saved some money of your own — most programs require at least 1 to 3 percent of the purchase price as your own contribution. This is called a "match" requirement and is designed to show you have skin in the game. The down payment information covers the rest.

Timeline from process to closing and common delays

If you are working with a lender on TSAHC's HOME program, the timeline is roughly the same as a standard mortgage: pre-approval takes three to five business days, underwriting takes five to ten days, and final approval and closing take another five to ten days. The HOME paperwork adds two to four weeks because TSAHC has to review and fund it separately. Total time from first contact to closing is typically six to ten weeks.

Local programs can be faster or slower depending on their workload. Some have waitlists during busy seasons. Others can close a file in four weeks. Call ahead and ask what the current timeline is — this changes month to month.

Common delays include incomplete documentation (missing pay stubs, tax returns, or bank statements), appraisal issues (the home appraises lower than the purchase price), title problems, or changes to your employment or credit during the process. Avoid job changes, new credit applications, or large purchases once you are in the mortgage process. Any of these can trigger a re-underwriting and add weeks.

Frequently Asked Questions

Can I use down payment information if I have bad credit?

Most programs require a credit score of at least 620, though 640 or higher is more common. If your score is below 620, you may not may have access to for TSAHC's HOME program or most local programs. Some credit unions and nonprofit lenders have more flexible credit requirements, so ask your lender whether they have alternative products if your score is lower.

What if I am self-employed or have irregular income?

Self-employed buyers can use down payment information programs, but you will need to provide two years of complete tax returns and a current profit-and-loss statement. Lenders will average your income over two years to smooth out irregular months. If your business is less than two years old, you may not may have access to for some programs.

Do I have to use a specific lender to get down payment information?

For TSAHC's HOME program, you must use a lender who participates in the program — you cannot use any lender you want. For local programs, some require you to work with a specific lender or a small group of approved lenders, while others let you choose any lender and still receive information. Ask your city's housing department which lenders they work with.

What if the home I want to buy is outside my city?

TSAHC's HOME program works statewide, so you can use it to buy a home anywhere in Texas as long as you meet income limits for that county. Local programs only work within their city or county boundaries. If you are buying outside your city, check whether the county where the property is located has its own program, or use TSAHC's HOME program through an approved lender.

Can I combine down payment information with other programs like VA loans or FHA loans?

Yes. Down payment information can be stacked with VA loans, FHA loans, and conventional loans. The information reduces the amount you need to borrow, which lowers your monthly payment and improves your debt-to-income ratio. Tell your lender upfront that you are interested in down payment information so they can structure the loan correctly.