Dallas Down Payment Assistance Program

Everything First-Time Buyers Need to Know About the Dallas Down Payment Assistance Program

Do rising home prices in North Texas have you feeling stuck on the sidelines? The Dallas Down Payment Assistance Program may be the ladder that gets you over the fence and into a home of your own. By offering as much as $15,000 to qualified first-time buyers inside Dallas city limits, the initiative trims years off the saving timeline and makes homeownership feel possible again.

What Is the Dallas Down Payment Assistance Program, in Plain English?

The Dallas Housing Finance Corporation—an arm of the city’s housing department—created the program to widen the path to homeownership. Instead of handing out cash, the city issues a forgivable second lien that covers some or all of your down payment and closing costs. Remain in the home and comply with program rules for the entire affordability period (usually five years) and the balance is wiped away, no repayment required.

Think of it as a silent partner: it helps you over the funding hurdle, then quietly disappears as long as you stay put and keep the mortgage current. And because the assistance is tied to percentages, not a fixed house price, it scales alongside the metro’s dynamic market.

Key Numbers at a Glance

• Maximum assistance: $15,000
• Minimum buyer contribution: $1,000 (or 1% of sales price, whichever is less)
• Forgiveness period: 5 years on a pro-rated schedule
• Home price cap: Currently $275,000 for existing homes, $310,000 for new builds*
• Income limit: 80% of Dallas area median income (AMI) adjusted for household size*

*Figures updated by the city each spring; always verify on DallasHousing.org.

How Does the Dallas Down Payment Assistance Program Work Step by Step?

Below is the sequence most lenders and housing counselors follow. Each step may seem small, yet together they form a road map that can land you a deed in your hand.

1. Pre-qualify with a participating lender. The lender runs your credit, verifies income, and confirms you meet the program’s 80% AMI ceiling.
2. Take an 8-hour HUD-approved education course. It feels like driver’s ed for homeownership, but graduates swear the budgeting modules are gold.
3. Submit your Dallas DPA application. Most documents go through the lender, who packages everything for city review.
4. Find a property inside Dallas city limits. A licensed Realtor writes the offer and inserts city-required contract language.
5. City issues a commitment letter. Approval usually appears in your inbox within 15 business days, assuming the file is clean.
6. Close on the home. The city wire arrives alongside your primary mortgage funds, covering the negotiated down payment and eligible closing costs.
7. Live in the home for five years. Sell or refinance early and you’ll repay a prorated amount; stay the entire term and the lien evaporates.

Who Qualifies for Dallas Down Payment Assistance?

Qualifying may be easier than you expect. Because the assistance is designed for low-to-moderate income households, eligibility centers on three pillars:

1. First-Time Buyer Status

You can’t have owned residential property in the last three years. If you sold a condo in 2020 and it’s now 2024, you’re considered “first-time” again. Married? Both spouses must meet the rule.

2. Income at or Below 80% AMI

For 2024, that translates roughly to $52,400 for a single person and $74,850 for a family of four, but the chart adjusts annually.

3. Property Must Be Primary Residence

Investors need not apply. You must occupy the home within 60 days of closing and call it your primary residence for at least five years.

Credit score matters, too. While the city doesn’t set a minimum, most participating lenders want to see 620 or higher for conventional and 600 for FHA. Have a thin file? A manual underwriting exception may work if payment history on rent and utilities is solid.

Case Study: How Maria, a Dallas ISD Teacher, Landed a Home with Only $1,150 Out of Pocket

Maria Garza teaches fourth grade near Oak Cliff. She earns $55,000 a year—hardly minimum wage, yet still below the 80% AMI ceiling for a single parent of two. For years, rent hikes gnawed at her budget like a mouse chewing through wiring. Last summer she attended a city-sponsored homebuyer fair “just to gather info.”

Within three months Maria closed on a $248,000 3-bedroom bungalow. She used $14,000 from the Dallas down payment help, layered it with a $2,500 teacher grant, and needed to bring only $1,150 to the table. A year later, her monthly mortgage is $240 less than what she paid in rent—and her kids finally have a backyard swing.

Maria’s story illustrates a hidden truth: you don’t need a six-figure salary or a giant savings account to buy in Big D.

Benefits and Drawbacks: A Balanced View

Why Buyers Love This Program

• Up to $15k lowers your loan-to-value ratio, which can translate into better mortgage rates.
• Forgivable after five years—no monthly payments on the second lien.
• Can pair with FHA, VA, USDA, and conventional loans.
• Available citywide, not tied to census tracts like some federal programs.

Potential Cons to Consider

• Income caps exclude some middle-income households.
• Resale restrictions: any sale within five years triggers a prorated payback.
• City review can add two to three weeks to closing timelines.
• Funds are finite; when the annual allocation runs out, applications pause until the next fiscal year.

Weigh those factors against your financial plans and mobility preferences. If you expect a job transfer in three years, another option—like a statewide 3-year forgivable grant—may suit you better.

How Much Can You Really Save? Crunching the Numbers

According to the Texas Real Estate Research Center, the median Dallas sales price hovered around $355,000 in late 2023. A 3.5% FHA down payment on that price runs $12,425. Closing costs in Texas average 2%–3% of the sales price—let’s call it $8,500 for simplicity.

Without help, a first-time buyer could need roughly $20,925 upfront. With the full $15,000 Dallas homebuyer assistance, the out-of-pocket requirement shrinks to $5,925. That’s the difference between “maybe next year” and “let’s write the offer.”

Is the Dallas Down Payment Assistance Program Worth It?

Short answer: Often, yes. Long answer: It depends on your horizon and discipline.

Consider two parallel buyers purchasing identical homes. Buyer A uses Dallas DP assistance; Buyer B saves another 24 months to reach a $21k nest egg. If home values appreciate the regional average of 5% annually, Buyer B pays roughly $36,000 more for the same house down the line—and loses two years of mortgage amortization. In that scenario, the forgivable lien looks downright inexpensive.

FAQ

Ready to Unlock Your Front Door?

The Dallas Down Payment Assistance Program has already helped thousands of renters pivot into ownership, building equity instead of handing landlords another check. If you meet the income guidelines and plan to stay put for at least five years, the numbers lean heavily in your favor.

Our team monitors local and statewide homebuyer incentives daily. We’d be honored to map out your personal path—whether that means Dallas down payment grant money, a lower-rate mortgage, or both. Reach out today for a free, no-pressure eligibility check and get one step closer to holding your own set of keys.