My First Texas Home First-Time Homebuyer Assistance Programs

My First Texas Home: Your Roadmap to an Affordable First House in the Lone Star State

Reading time: 7 minutes  |  Updated: 2024

Dreaming of a starter home that doesn’t drain your savings? My First Texas Home may be the missing puzzle piece. In a world of soaring prices and stubborn interest rates, this state-backed first mortgage program hands first-time buyers a lifeline: competitive fixed-rate loans and optional down-payment assistance. Below, you’ll discover how the program works, who qualifies, and how to snag an approval before that perfect three-bedroom slips away.

How the My First Texas Home Program Works

Administered by the Texas Department of Housing & Community Affairs (TDHCA), My First Texas Home (often shortened to MFTH) bundles two major benefits into one streamlined package:

• 30-year, fixed-rate FHA, VA, or USDA mortgage. No teaser rates, no balloon payments—just predictable monthly bills.
• Optional Down Payment & Closing Cost Assistance (DPA). Up to 5% of the loan amount, issued as a 0% second lien that’s forgiven after 30 years or when the first mortgage is repaid.

Unlike some local programs that make you chase separate grants, everything here is folded into one loan application with approved lenders across Texas. The state negotiates interest rates daily, frequently beating market averages by 0.25–0.50% according to recent TDHCA rate sheets.

Benefits at a Glance

• Lower fixed interest rates than many private lenders advertise.
• Down payment help that doesn’t require monthly repayment.
• Works statewide—whether you’re eyeing an Austin condo or a rural farmhouse outside Lubbock.
• No need to be a Texan forever; recent arrivals can qualify after meeting income and purchase limits.
• Pairs with FHA, VA, and USDA underwriting guidelines, giving you multiple pathways to approval.

Who Is Eligible for My First Texas Home?

Eligibility rests on three pillars: first-time status, income limits, and purchase-price caps. “First-time” means no ownership in a primary residence during the past three years—so renters, divorcees, and even certain investors returning to owner-occupancy can qualify.

Income ceilings adjust by county and household size. In Dallas County, for example, a family of four must earn roughly ≤ $107,000 (2023 limits) to stay in the game. Purchase-price caps often hover around $481,000 in metro areas and slightly lower in rural counties. Because TDHCA revises these figures annually, partnering with an MFTH-approved lender ensures you’re using the freshest numbers.

Does the Program Include Down Payment Assistance?

Absolutely—and it’s the headline act for many borrowers. The Down Payment Assistance (DPA) piece attaches as a second lien of up to 5% of the loan amount. That money can cover not only the 3.5% down required on an FHA loan but also the bulk of closing costs—sometimes wiping out nearly every up-front dollar except the earnest money.

Best of all, the DPA carries no monthly payments and sits at 0% interest. Pay off or refinance the first mortgage, and the second lien disappears. It’s essentially a silent partner in your equity build.

What Credit Score Do You Need for My First Texas Home?

TDHCA sets a minimum 620 FICO for FHA and VA options, while USDA routes often require 640+. That said, lenders overlay their own risk rules. One Houston-based MFTH lender told us they routinely approve buyers at 623, provided debt-to-income ratios stay below 45%. Because every bank calibrates risk differently, shopping two or three MFTH lenders can turn a “not yet” into a “yes.”

How Do I Apply for the Program?

The application process feels like a standard mortgage—but with a twist of state oversight. Here’s the quick version:

1. Take the COVID-era online homeownership course. Costs about $25 and is valid for one year.
2. Contact an MFTH-approved lender. Over 80 banks and credit unions across Texas carry the badge.
3. Complete pre-approval. Provide pay stubs, tax returns, and the course certificate.
4. Shop for a home within price limits. Remember: new or existing homes qualify; manufactured housing does not.
5. Close and move in. You must occupy within 60 days and treat the property as your primary residence.

Comparing My First Texas Home to Other State Programs

Texas offers a buffet of buyer aids—think Texas Mortgage Credit Certificate (MCC) or Home Sweet Texas. Where My First Texas Home shines is in its blended structure: you get the loan and assistance together. MCCs lower your taxes but require separate paperwork; Home Sweet Texas helps repeat buyers yet generally carries slightly higher rates. For pure simplicity and interest-rate savings, MFTH remains the flagship product.

Real Numbers: What a $300,000 Purchase Looks Like

A San Antonio couple recently shared their closing statement with names removed. Here’s the meat:

• Purchase price: $300,000
• FHA down payment (3.5%): $10,500
• DPA received (5%): $15,000
• Closing costs: $7,800
• Cash to close: $0—the extra DPA covered everything beyond the down payment.
• Interest rate: 5.75% fixed (vs. 6.25% market average that week)

Net result? Their monthly payment landed $110 cheaper than if they’d gone retail, and they kept $10k in savings for new furniture. That breathing room often spells the difference between feeling “house poor” and feeling at home.

Seven Common Misconceptions (and Quick Truths)

• “Only brand-new homes qualify.” Existing properties are fine.
• “Assistance is a grant.” Technically a 0% forgivable loan.
• “I can rent the house out right away.” Primary residence for the entire loan term is required.
• “Every bank offers the same rate.” TDHCA sets ceilings; lenders can add overlays.
• “I need perfect credit.” 620+ can work.
• “Self-employed buyers are ineligible.” Nope—just expect extra documentation.
• “I’ll owe taxes on forgiven DPA.” Current IRS rules exempt this type of forgiveness (check with a CPA).

Expert Tips to Strengthen Your Application

Seasoned loan officers whisper these tactics:

1. Pay down small credit cards a week before your lender pulls credit—utilization swings scores by up to 40 points.
2. Document all deposits; unexplained Venmo transfers raise red flags.
3. Shop mid-week; TDHCA locks rates daily at 10 a.m. Central—Wednesdays historically post the lowest spreads.
4. Stack programs; pair MFTH with a Mortgage Credit Certificate to shrink your IRS bill for up to 30 years.

FAQ

Q: Are there recapture taxes on My First Texas Home loans?

A: Possibly, but only if you sell within nine years and earn significant profit; most buyers owe nothing.

Q: Can I refinance without losing the assistance?

A: Yes. Refinance the first mortgage and the 0% second lien is repaid from proceeds—no penalty.

Q: Is the program limited to U.S. citizens?

A: Permanent residents and certain visa holders with valid Social Security numbers also qualify.

Q: Does MFTH cover new-construction deposits?

A: Deposits count toward cash to close, so the DPA can reimburse them at settlement.

Q: Can I use gift funds alongside the DPA?

A: Absolutely; gifts can reduce your debt even further, subject to standard FHA/VA/USDA documentation rules.

Ready to Claim Your Keys?

A home in Texas is more than four walls—it’s a front-row seat to bluebonnet seasons, backyard barbecues, and Friday-night lights. If My First Texas Home sounds like your springboard, let our licensed Texas agents and in-house MFTH lenders guide you from curiosity to closing. Call 800-555-1234 or email info@lonestarhomes.com for a free eligibility check today. Your porch swing is waiting.