Texas Department of Housing and Community Affairs (TDHCA) Down Payment Assistance Program

Unlock Your Texas Dream Home with the Texas Department of Housing and Community Affairs (TDHCA) Down Payment Assistance Program

Buying your first home in Texas shouldn’t feel like roping the wind. Yet for many hopeful buyers, saving tens of thousands of dollars for a down payment can be a tall order. That’s where the Texas Department of Housing and Community Affairs (TDHCA) Down Payment Assistance Program rides to the rescue. By offering up to $15,000 in aid, TDHCA turns “someday” into a firmly staked claim—often months or years sooner than expected.

Why Down Payment Assistance Matters in the Lone Star State

Home prices in Texas have galloped ahead of wage growth in recent years. According to state-level transaction data, the median sales price surged roughly 44% between 2019 and 2023, while average wages grew about 18%. That mismatch forces many would-be homeowners into longer rental stretches, draining resources that could otherwise build equity.

Down payment assistance bridges this divide. By shaving $10,000–$15,000 off upfront costs, the TDHCA Down Payment Assistance program effectively:

• Reduces the time needed to save for a down payment by 12–24 months for median-income households.
• Lowers the monthly mortgage payment when paired with competitive interest-rate loans.
• Expands eligibility to buyers who thought they’d never clear the cash-to-close hurdle.

In other words, what feels like a dusty mirage can become a key in your hand—no tumbleweeds required.

How the Texas Department of Housing and Community Affairs (TDHCA) Down Payment Assistance Program Works

The Texas Department of Housing and Community Affairs (TDHCA) Down Payment Assistance Program funnels federal and state funds into forgivable second liens or grants, depending on the loan option you choose. Think of it as a friendly co-pilot whose only role is to cover that tricky first leg of your journey.

Program Snapshot: The Numbers You Need to Know

• Assistance amount: Up to $15,000 (or 5% of loan amount, whichever is lower).
• Loan type: 30-year fixed-rate first lien with a matching second lien or grant for down payment and closing costs.
• Repayment: Forgivable after 3–10 years depending on option; some grants never require payback.
• Income limits: 80%–115% of Area Median Income (AMI) based on county and household size.
• Minimum credit score: 620 for most borrowers; non-traditional credit accepted in select cases.
• Home price cap: Follows conventional loan limits—currently $726,200 for single-family in most counties.

Pro tip: The interest rate on the first mortgage is slightly higher than market, but the upfront grant often offsets the lifetime cost. Always request a side-by-side comparison.

A Micro-Story from West Texas

Meet Maria and Lucas, a nurse and public-school teacher in Lubbock. After paying off student loans, they managed to save $6,500—far short of the $21,000 a 3% down payment plus closing costs would require on a $300,000 starter home. Their lender introduced the Texas Department of Housing and Community Affairs (TDHCA) Down Payment Assistance Program. With $14,000 in support, they closed within 45 days, beating a rent hike that would have cost them $2,400 more per year. Their monthly mortgage landed just $139 above their old rent—yet $139 now goes toward equity, not a landlord’s ledger.

How Do I Qualify for the TDHCA Down Payment Assistance?

Qualifying is easier than you might assume. TDHCA uses a streamlined checklist rather than endless red tape. First, confirm that your household income sits below the county cap. For instance, in Harris County a family of three can earn up to roughly $111,000 and still qualify in 2024. Next, verify that your credit score is at least 620; if not, some participating lenders will accept alternative credit sources like rent-payment histories.

You’ll also complete a HUD-approved homebuyer education course (often online and under \$100) and occupy the home as your primary residence. Finally, work with a TDHCA-approved lender who files the necessary paperwork. The lender essentially acts as your trail boss, herding each document until you reach closing day.

Is the TDHCA Down Payment Assistance Program Only for First-Time Buyers?

The name may whisper “first-time,” but in practice the program casts a wider net. TDHCA defines a first-time buyer as someone who hasn’t owned a principal residence in the last three years. So if you sold a home during the oil downturn of 2018, rented for a spell, and now want back in—congratulations, you’re reborn as a first-timer under TDHCA rules.

Certain rural and targeted census tracts even waive that three-year look-back completely. That means move-up buyers in qualifying areas can snag down payment assistance, provided they meet income and purchase-price limits. In short, the program is Texas-sized in its flexibility, serving both genuine newbies and returning homeowners alike.

Do I Have to Repay the Assistance?

The answer hinges on the option you choose:

• Forgivable second lien: Acts like a silent partner. Stay in the home and make on-time payments for the required period (usually 3, sometimes 10 years) and the lien dissolves—no payback.
• Grant option: Money that never expects an RSVP. Higher first-mortgage rate applies, but funds are not repaid.

If you sell, refinance, or otherwise pay off the first mortgage before the forgiveness period ends, the outstanding balance on the second lien becomes due. A seasoned loan officer will tailor your choice to your five- and ten-year plans.

Other Key Benefits & Nuances Worth Knowing

• Layering with local aid: Several Texas cities—Austin, San Antonio, El Paso—offer municipal grants. These can be combined (with lender approval) for even larger savings.
• Condo-friendly: Unlike some state programs, TDHCA funds attached condos and even certain manufactured homes.
• Rate locks: TDHCA lets lenders lock your interest rate for 60–70 days—handy in volatile markets.
• No recapture tax: As of federal updates, TDHCA loans funded after 2010 avoid the old recapture penalty that once surprised sellers.

Step-By-Step Application Roadmap

1. Check eligibility. Use TDHCA’s online income and purchase-price lookup tool.
2. Choose an approved lender. Over 150 statewide—ask upfront if they’re experienced with the Texas Department of Housing and Community Affairs (TDHCA) Down Payment Assistance Program.
3. Complete homebuyer education. Allocate 6–8 hours; virtual options available 24/7.
4. Submit loan application. Provide W-2s, paystubs, bank statements, and ID—standard mortgage fare.
5. Secure rate & assistance. Lender reserves funds and issues a pre-approval letter.
6. Go house hunting! Contract must fall within TDHCA limits.
7. Close & move in. Sign both the first mortgage and the grant/second lien documents at closing. Welcome home.

Benefits vs. Other Texas Down Payment Programs

TDHCA’s statewide reach makes it a reliable fallback even when local funds run dry mid-quarter.

FAQ

What credit score do I need?

Most lenders look for 620, though 640 earns better pricing. Non-traditional credit can sometimes substitute.

Can I use TDHCA assistance with an FHA loan?

Yes. TDHCA pairs with FHA, VA, USDA, and conventional 30-year fixed loans.

Are there property condition requirements?

Standard appraisal and safety guidelines apply, similar to any FHA or conventional loan.

Does the program cover closing costs, too?

Absolutely—your assistance can pay both the down payment and most lender or title fees.

How long does approval take?

Pre-approval can be issued within 48 hours. The full mortgage process averages 30–45 days.

Your Next Move

The path to homeownership isn’t a dusty trail lined with cacti—it’s a paved road, and the Texas Department of Housing and Community Affairs (TDHCA) Down Payment Assistance Program hands you the fuel money to get rolling. Our Texas-licensed real estate advisors have guided hundreds of clients through TDHCA, TSAHC, and local grant programs. Let us decode the numbers, connect you with an experienced lender, and negotiate your purchase so that you stride into closing with confidence, not jitters.

Ready to claim your slice of Texas? Call us at 555-123-4567 or click the chat icon below for a no-obligation strategy session.