2026 Texas First-Time Homebuyer Programs and Loans
Eligible Texas residents can take advantage of the state’s programs for first-time homebuyers. There are several options available, including down payment assistance programs, low-interest mortgages and tax credits for Texas homebuyers. To qualify, you generally need a credit score of 620 or higher. Income restrictions can also apply.
First-time homebuyer programs in Texas
Depending on where you want to live, the Texas housing market can be highly competitive. The Texas Real Estate Research Center also reports that December 2025 home sales showed a 6.1% year-over-year gain.
According to the agency, the median housing price in Texas came in at $330,000 as of December 2025. For conventional mortgages, that means a typical homebuyer would need about $16,500 for a 5% down payment.
To help make homeownership more achievable, the Lone Star State has several programs to assist homebuyers:
- Home Sweet Texas Home: Good for low- and middle-income households
- My Choice Texas Home: Good option for repeat homebuyers
- Homes for Texas Heroes: Good option for teachers, public servants and veterans
- My First Texas Home: Good for first-time homebuyers
- Texas Bootstrap Loan Program: Good for those purchasing or renovating a fixer-upper
Home Sweet Texas Home
The Homes Sweet Texas Home Loans Program provides home loans and down payment assistance to low- and moderate-income families. Through the program, families can qualify for a low-interest mortgage loan and receive funding to use toward the down payment. You can opt to receive the down payment assistance either as a grant — which doesn’t have to be repaid — or as a deferred forgivable second lien loan that only has to be repaid if you refinance or sell within three years of purchasing the home.
If you qualify as a first-time homebuyer, Home Sweet Texas Home also qualifies for the state’s mortgage credit certificate (MCC) program. This program reduces your federal income taxes by allowing you to get a portion of what you spent on mortgage interest back as a tax credit. Effective as of March 5, 2026, the MCC gives homebuyers a credit of 15% of what you spent.
Requirements
- 620 credit score or higher
- Income cannot exceed a percentage of the area’s median income
- Not profession-specific
- Completion of a homebuyer education course approved by the Department of Housing and Urban Development (HUD)
Pros and cons
Pros
- Not limited to certain professions
- Grants available for down payment assistance
- Open to first-time and repeat homebuyers
Cons
- Income restrictions apply
- 620 minimum credit score required
- Homebuyer education course required
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My Choice Texas Home
My Choice Texas Home is a program available to new and repeat homebuyers. Through the program, you can qualify for a 30-year, low-interest mortgage with up to 5% of down payment and closing cost assistance. The program is available statewide.
Requirements
- 620 credit score or higher
- Occupy the home as a principal residence
- Meet income limits for the property’s county
- Must be approved for a qualifying mortgage through an approved Texas Homebuyer Program lender
Pros and cons
Pros
- Available to repeat homebuyers
- Down payment and closing cost assistance
- Available statewide
Cons
- Income restrictions apply
- Home must fall under property value limits
- Minimum credit score of 620
Homes for Texas Heroes
Homes for Texas Heroes gives eligible homebuyers low-interest mortgages and down payment assistance. Only those who work in certain public service roles are eligible:
- Public school teachers
- Corrections officers
- EMS personnel
- Fire fighters
- Veterans
- Active military
- Police officers
- School librarians
- School counselors
- School nurses
First-time homebuyers who use Homes for Texas Heroes may also be eligible for the Texas MCC program.
Requirements
- Qualifying profession
- 620 minimum credit score
- Completion of a HUD-approved homebuyer education course
Pros and cons
Pros
- Available for first-time and repeat homebuyers
- Eligible for MCC program
- Grants for down payment assistance available
Cons
- Not available to all professions
- Must work with an approved lender
My First Texas Home
My First Texas Home is a program designed solely for military veterans and first-time homebuyers. With this program, qualifying participants can take out a 30-year, low-rate mortgage with up to 5% of the first mortgage amount to use toward the down payment and closing costs. This program can be combined with the MCC program.
Requirements
- Credit score of 640 to 680 required (depending on loan type)
- First-time homebuyer or military veteran
- Meet income and property value limits for your selected county
- Debt-to-income ratio must not exceed 45%
Pros and cons
Pros
- Up to 5% of loan amount for down payment assistance
- Three-year second lien is forgivable
- Eligible for MCC
Cons
- Income and property value limits apply
- Minimum credit score of 640 to 680 required
- Only available to veterans and first-time homebuyers
Texas Bootstrap Loan Program
Not limited to first-time homebuyers, the Texas Bootstrap Loan Program helps low-income Texans build or repair a home. Participants will receive up to $45,000 as a loan, and it’s repaid over a term of up to 30 years at 0% interest. In exchange, participants contribute at least 65% of the labor themselves.
Requirements
- Cannot exceed 80% of the area median family income and 80% of the state median income
- Provide at least 65% of the labor, and you must work with a certified administrator
- Must live in an eligible area of Texas
Pros and cons
Pros
- 0% interest loan
- Up to 30-year term
Cons
- Income limits apply
- Loan capped at $45,000
- Labor commitment required
Texas first-time homebuyer qualifications
Texas has several homebuyer programs, and their eligibility requirements vary widely. Generally speaking, you need to fall into the low- to moderate-income category and have at least a 620 credit score to qualify. The average credit score in Texas was 692 as of 2025, according to Experian, so many residents should be able to easily qualify.
Steps to apply for a first-time homebuyer program
The process to find out whether you’re eligible for one of Texas’s programs is easy, and the state has a website to guide you through the process. Follow these steps to apply for a Texas first-time homebuyer program:
- Take an eligibility quiz: The Texas State Affordable Housing Corporation (TSAHC) website has an eligibility quiz you can use to find out what programs you may be eligible for. The program will ask about your job, whether you’re a first-time homebuyer, your household size and your household income. Based on the information you provide and details like your credit score, the site will tell you what programs are available to you.
- Find a lender: To take advantage of Texas’s programs, you must work with a loan officer employed by an approved mortgage company. You can find a qualifying loan officer through the TSAHC website and work with that lender to get preapproved for a home loan.
- Complete a homebuyer education class: Most Texas first-time homebuyer programs have a homebuyer education requirement, and the course must be approved by the TSAHC. In-person classes range in cost from $0 to $50, while online classes range from $0 to $99.
- Find a Realtor: Now you’re ready to find a real estate agent and start shopping for a home. You can use any Realtor you’d like; you aren’t limited to a TSAHC-recommended agent.
Understanding Texas first-time homebuyer down payment assistance
Texas operates several homebuyer programs to help low- to moderate-income families become homeowners. In Texas, 82.8% of down payment assistance programs were funded as of the fourth quarter of 2025, according to the Down Payment Resource’s homeownership program index.
Depending on your profession and income and whether you’ve bought a home previously, you may qualify for a deferred second mortgage, grants or mortgage credit certificates.
Deferred second mortgage
A deferred second mortgage can be used to cover down payment and closing costs. This type of loan is repayable over a specific period, but the rates and terms vary by state and program.
The mortgage only has to be repaid if you sell or refinance your home within a certain period. For example, Texas’s Home Sweet Texas Home Loan program allows you to receive a deferred forgivable second lien. The loan only has to be repaid if you sell or refinance your home within three years of purchasing it.
Requires repayment? Yes, if sold or refinanced within a certain period.
Forgivable second mortgage
A forgivable second mortgage can be used for closing costs and down payments. And if you live in the home for a certain length of time, the loan may be forgiven.
Requires repayment? No
Grant
Some assistance comes in the form of grants that don’t have to be repaid. The Home Sweet Texas Home Loan Program includes a grant option for down payment assistance that never needs to be paid back.
Requires repayment? No
Mortgage credit certificate
A mortgage credit certificate is a tax credit that lowers your tax liability. In Texas, qualifying homeowners can get an annual tax credit of up to 15% of the mortgage interest paid.
Requires repayment? No
Down payment assistance (DPA) programs can make homeownership more attainable, but there may be strings attached. For example, for programs that involve deferred second mortgages, you may have to repay the amount of the loan if your circumstances change and you need to sell your home or refinance your loan within a certain period, such as three years after the purchase date.
How much of a down payment do I need to buy a house in Texas?
The median down payment for Texas homebuyers was $41,250 in 2024, according to a recent LendingTree analysis. But depending on the house you buy, you can make a smaller down payment and still qualify for conventional, FHA, VA and USDA loans, thanks to these requirements and the Texas down payment assistance programs.
Can you afford a home in Texas? Use LendingTree’s home affordability calculator to find out.
Can I qualify for down payment assistance in Texas?
To qualify for down payment assistance in Texas, you typically need to meet the following requirements:
- You must live in the state
- You must have a 620 credit score or higher, depending on the program
- You must meet area income limits
- The home you want to purchase may be subject to price limits
How do I apply for Texas first-time homebuyer down payment assistance?
To start the process, take the eligibility quiz on the TSAHC website. Based on your profession, income and location, it will tell you what homebuyer assistance programs you may be eligible for and how to apply.
Here’s what you need to know about the process of applying for a home loan.
Other first-time homebuyer loan programs
Conventional loans
A conventional loan is not backed by a government agency and is available from banks and credit unions. With good credit, you may qualify for a mortgage with competitive rates and a down payment as low as 3% to 5%.
FHA loans
FHA loans are not just for first-time homebuyers, but they can make homeownership more accessible for some people. You can qualify for a loan with a down payment of just 3.5% if your credit score is 580 or higher. FHA mortgage rates vary by lender.
VA loans
VA loans are available to active service members, military veterans and surviving spouses and do not require a down payment. VA loan mortgage rates vary by lender.
USDA loans
USDA loans are available to homebuyers looking to buy rural properties in designated areas. Like VA loans, USDA loans allow you to buy a home with 0% down.
Learn more about minimum mortgage requirements in 2026.
What are the best first-time homebuyer loans?
First-time homebuyer programs make homeownership more attainable with low down payment and credit score requirements. Conventional and FHA loans allow you to buy a home with a down payment of as little as 3% or 3.5%, and FHA loans have low credit score minimums.
Other loans, like USDA and VA loans, allow you to buy a home without a down payment, but their eligibility requirements are more restrictive.
| Loan program | Best for first-time homebuyers who: |
|---|---|
| Conventional | Have good credit and a down payment of 5% or more |
| FHA | Have a lower credit score and want a smaller down payment |
| VA | Are military service members |
| USDA | Are buying a property in an eligible rural area |
Home price trends in Texas major areas
Over the last year, Texas home price increases have finally steadied and slowed down. Unfortunately, this slowing in home price growth comes after several years of rapid price appreciation.
For example:
- Austin-Round Rock-Georgetown: The Austin-Road Rock-Georgetown area is a technology hub; major companies like Tesla, Amazon and more are based there. Home prices in this region increased just 0.38% in the 12 months leading up to Q4 of 2025. However, that’s after increasing 34.02% over the last five years.
- El Paso: From Q4 of 2024 to Q4 of 2025, home prices rose 2.19%. Over five years, home prices have increased 56.68%.
-
Dallas-Plano-Irving: In the year leading up to Q4 of 2025, home prices in the area actually decreased by -0.34%. But that’s after increasing 47.39% over the preceding five years.
Although there used to be a federal tax credit for first-time homebuyers, that credit was discontinued. However, first-time homebuyers in Texas may be eligible for the mortgage credit certificate (MCC), which is an annual benefit that gives you a credit of up to 15% of the mortgage interest paid — a significant tax break for homeowners.
What are the current mortgage rate trends in Texas?
So far in 2026, rates for 30-year fixed-rate mortgages in Texas are hovering around 6%. Current mortgage rate predictions from LendingTree experts forecast that interest rates nationwide could possibly drop below 6% at some point in 2026.
- 30-year mortgage rates are averaging: 6.26%
- 15-year mortgage rates are averaging: 5.42%
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