
Down Payment Assistance: Are You Eligible?
Buying a home is a major milestone, but for many, the down payment is a significant obstacle. Fortunately, there are down payment assistance (DPA) programs that offer grants, loans, and other financial aid to help Texas homebuyers secure a home with little to no money down. If you're wondering whether you qualify for these programs, keep reading to learn more about eligibility requirements and available assistance options.
What Is Down Payment Assistance?
Down Payment Assistance (DPA) programs provide financial support to homebuyers to help cover their down payment and closing costs. These programs come in different forms:
- Grants – Free money that does not need to be repaid
- Forgivable Loans – Loans that are forgiven after a specific period, as long as certain conditions are met
- Low-Interest Loans – Secondary loans with lower interest rates to assist with upfront homebuying costs
- Matched Savings Programs – Programs that match a homebuyer’s savings, increasing their down payment funds
Who Qualifies for Down Payment Assistance?
Each program has its own eligibility criteria, but most consider:
- Income Limits – Many programs are designed for low-to-moderate-income buyers, with income limits based on the Area Median Family Income (AMFI).
- First-Time Homebuyer Status – Some programs are exclusively for first-time buyers, but others allow repeat buyers who haven't owned a home in the past three years.
- Credit Score Requirements – A minimum credit score of 620–660 is common, but some programs are more flexible.
- Primary Residence Requirement – Most DPAs require that the home be your primary residence (not an investment property).
- Home Price Limits – Some programs limit the maximum purchase price of the home.
Types of Down Payment Assistance Programs
There are numerous DPA programs available through federal, state, and local agencies. Below are some of the most common programs:
1. Federal Low Down Payment Loans
- FHA Loans – Allow down payments as low as 3.5%, making them ideal for buyers with limited funds.
- VA Loans – Offer zero-down financing for veterans, active military, and eligible spouses through the Department of Veterans Affairs (VA).
- USDA Loans – Designed for rural and suburban homebuyers, USDA loans require no down payment if you meet location and income requirements.
2. State & Local Government Programs
Many state and local governments offer grants, forgivable loans, and low-interest loans for eligible homebuyers. Here are some Texas-specific programs that can help:
Harris County – Up to $23,800 for New and Existing Homes
- First-time homebuyers only
- Income limits apply – Must be at or below 80% of the Area Median Family Income (AMFI) based on household size
- New construction homes must be Energy Star certified
- Existing homes must be less than 20 years old
- Home must be in Harris County, but outside Houston, Pasadena, and Baytown
Homes for Texas Heroes
- Up to 5% of the loan amount in assistance
- Grant-based program – No need to repay the DPA
- Available to educators, emergency medical personnel, firefighters, corrections officers, allied health faculty, county jailers, juvenile correction officers, nursing faculty, peace officers, public security officers, or veterans
- Household income and purchase price limits apply
- Home can be located anywhere in Texas
- Funds provided by TSAHC
City of Houston – Up to $15,000 for New and Existing Homes
- For homebuyers who pay taxes to the City of Houston and who currently don't own property
- Income limits apply – Must be at or below 80% (Houston HOPE) and 110% (Workforce Housing) of AMFI based on household size
Home Sweet Texas Home Loan
- Up to 5% of the loan amount in assistance
- Grant-based program – No need to repay the DPA
- Household income and purchase price limits apply
- Home can be located anywhere in Texas
- Funds provided by TSAHC
5 Star Program
- Up to 6% of the loan amount in assistance
- Grant-based program – No need to repay the DPA
- Homebuyer must meet household income limits
- Home can be located anywhere in Texas, except within the city limits of Grand Prairie, El Paso, McKinney, and Travis County (including Austin)
- Funds provided by SETH
Montgomery County – Up to $14,500 for New and Existing Homes
- First-time homebuyers only
- Income limits apply – Must be at or below 80% of AMFI based on household size
- Home must be in Montgomery County, but outside the city limits of Conroe
- Maximum sales price set by HUD ($183,000 for an existing home, $228,000 for a new home)
My First Texas Home
- Up to 5% of the loan amount as a second mortgage loan (must be repaid)
- Household income limits apply:
- $69,300 for 1-2 people
- $79,695 for 3 or more people
- Home can be located anywhere in Texas
- Funds provided by TDHCA
3. Employer & Community-Based Assistance
Some employers, particularly hospitals, universities, and large corporations, offer DPA as an employee benefit. Additionally, nonprofit organizations like NeighborWorks America provide grants, education, and counseling for homebuyers.
How to Apply for Down Payment Assistance
- Check Eligibility – Research programs in your area and review their income, credit, and property requirements.
- Complete a Homebuyer Education Course – Many programs require a homebuyer education class before approval.
- Get Pre-Approved for a Mortgage – Work with a lender experienced in DPA programs to determine how much you qualify for.
- Submit an Application – Each program has its own process, typically requiring proof of income, credit score, and a home purchase agreement.
Final Thoughts: Is Down Payment Assistance Right for You?
If saving for a down payment is holding you back from homeownership, DPA programs can help make buying a home more affordable. With options like grants, forgivable loans, and employer-based programs, homeownership could be within reach.
If you're looking for down payment assistance programs in your area, consult with a real estate agent or lender who specializes in first-time homebuyer programs. They can guide you through the process and help you find the best options for your financial situation.
Are you ready to take the first step toward homeownership?
Homebuyer Education
Video 1 - How Much Will A Home Cost Me?
Video 2 - 5 Sources of Down Payment Assistance
Video 3 - Texas Down Payment Programs
Video 4 - Down Payment Programs Ins & Outs
Video 5 - S.E.T.H. & H.A.T. Program Details
Video 6 - A Home Purchase Scenario
Video 7 - Negotiation Terms
Video 8 - What Happens After Your Contract Is Accepted
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