What down payment assistance programs exist in Texas

Texas offers down payment help through several distinct channels: federal programs run by HUD (the Department of Housing and Urban Development), state programs managed by the Texas Department of Housing and Community Affairs, and local programs run by individual cities and counties. The money comes as grants or forgivable loans — you receive it once, and you do not repay it if you meet the program's terms. Most programs pay the lender or seller directly, not you.

The largest federal option is the Community Development Block Grant (CDBG) program, which flows through local governments. Texas also has the Home Investment Partnerships Program (HOME), which funds down payment help in specific regions. At the state level, the Texas Housing and Community Development Office runs the Homebuyer Assistance Program, though funding and availability shift year to year. City and county programs vary widely — Houston, Dallas, Austin, and San Antonio each run their own schemes with different income limits and property price caps.

The amount you receive depends on which program you use. Some cap assistance at $15,000; others go higher. Income limits typically range from 60% to 120% of your area's median income, though this varies by program and location. You must be a first-time homebuyer for most programs, though some define "first-time" as not having owned a home in the past three years rather than ever.

Key Takeaways

  • Down payment assistance in Texas comes from federal CDBG and HOME programs, state programs through the Texas Housing and Community Development Office, and local city or county programs, each with different income limits and award amounts.
  • Most programs require you to be a first-time homebuyer, have a household income below a set threshold (usually 60% to 120% of area median income), and complete homebuyer education before closing.
  • The money is typically a grant you do not repay, though some programs offer forgivable loans that become grants if you stay in the home for a set period.
  • Your local housing authority, city housing department, or a HUD-approved housing counselor can tell you which programs are currently open in your area, since funding and availability change throughout the year.

Income limits and property price caps by program type

Income limits are the first gate. Federal CDBG programs typically serve households at or below 80% of area median income, though some serve up to 120%. The Texas Homebuyer Assistance Program uses similar thresholds. Local programs often set their own limits — some are stricter, some looser. You calculate your household income by adding all gross income from all household members before taxes.

Property price caps exist in most programs. A home must fall below a certain purchase price to be may be able to access — this prevents the program from funding luxury purchases. Caps vary by county and by program. In urban areas like Travis County (Austin), the cap might be $350,000; in rural counties it may be lower. The program you are looking at will state its cap clearly. If the home you want to buy exceeds it, that program will not work for you, though another one in your area might.

Some programs also cap the amount of assistance you can receive as a percentage of the purchase price — for example, 10% or 15% of what you are paying. Others set a flat dollar maximum. A few programs combine both: they will give you up to $20,000 or 10% of the purchase price, whichever is less.

What documents you need to gather before you start

Programs require proof of income, proof of citizenship or legal residency, a credit report, and documentation of your first-time homebuyer status. Bring recent pay stubs (usually the last two months), tax returns from the past two years, and a letter from your employer confirming your job and salary. If you are self-employed, bring profit-and-loss statements and tax returns. If you receive benefits, bring the award letter.

You will also need a signed purchase agreement or letter of intent for the specific home you plan to buy. Programs do not give you money in advance; they fund a purchase that is already in motion. Bring your driver's license or state ID, proof of Social Security number, and documentation of residency in Texas (a utility bill or lease works). If you have been married or had a name change, bring divorce decrees or name-change documents.

Most programs require you to complete homebuyer education — a course covering budgeting, credit, and the mortgage process. Some programs offer this course themselves; others direct you to HUD-approved counselors. The course usually takes 8 to 12 hours and costs nothing. You must complete it before you close on the home.

How the application and approval timeline works

The process typically unfolds in this order: you contact the program, submit documents, attend homebuyer education, get pre-approval from a lender, find a home and make an offer, submit a full application to the down payment program, and then wait for approval while your lender processes the mortgage. The entire timeline from first contact to closing usually takes 60 to 90 days, though it can be faster or slower depending on how quickly you gather documents and how busy the program is.

After you submit a complete application, the program verifies your income, checks your credit, and confirms the property meets its requirements. This verification step typically takes two to four weeks. Once approved, the program sends the funds to your lender or the title company at closing. You do not receive a check; the money reduces what you owe at closing or goes directly to the seller.

The bottleneck is usually document gathering and homebuyer education. If you delay submitting documents or miss the education deadline, your closing date can slip. Programs also have limited funding. Some close their applications when money runs out and reopen when new funding arrives. Before you invest time in an application, call the program and ask whether it is currently accepting new applications.

Federal CDBG and HOME programs versus state and local options

Federal CDBG and HOME programs are administered locally — you apply through your city or county housing department, not through HUD directly. CDBG typically serves lower-income households (60% to 80% of area median income) and offers smaller grants. HOME programs often serve slightly higher incomes and may offer larger amounts. Both require homebuyer education and have property price caps.

The Texas Homebuyer Assistance Program is state-run but distributed through local partners. It often has higher income limits (up to 120% of area median income) and may serve households that federal programs do not. However, funding is limited and varies by year. Local city and county programs sometimes offer the most generous terms because they have local funding sources and can set their own rules. Austin's program, for example, has different terms than Houston's.

The practical difference: federal programs are more stable year to year but may have stricter income limits. State programs offer a middle ground. Local programs can be generous but may have shorter windows when they are open. Your best move is to contact all three in your area and ask which are currently accepting applications and which best fits your income and situation.

How to find the right program in your city or county

Start by contacting your local housing authority or city housing department. Search online for "[your city] down payment assistance" or "[your county] first-time homebuyer program." Most cities have a housing or community development department that lists available programs on their website. If you cannot find it online, call 211 (a free referral line) and ask for down payment assistance programs in your area.

HUD also maintains a list of approved housing counselors by state and county. These counselors know which programs are open, which have money left, and which fit your situation. Many offer free consultations. You can find a counselor at HUD's website by entering your zip code. A counselor can also help you understand the terms of each program and walk you through the application.

When you contact a program, ask three things: Is it currently accepting applications? What is the income limit? What is the maximum assistance amount? If a program is closed, ask when it expects to reopen. Some programs cycle through funding and reopen predictably; others depend on grant cycles. Knowing the timeline helps you plan.

What happens if you do not meet the income limit or the home is too expensive

If your income is above the limit, you may still have options. Some programs have a higher tier for households at 100% to 120% of area median income, though the assistance amount may be smaller. Ask whether the program has a second tier before you give up. If the home price exceeds the cap, you have two choices: look for a less expensive home, or apply to a different program with a higher cap. Not all programs in your area have the same cap.

If you do not meet either requirement, you can still buy a home — you just will not receive down payment help from these programs. You may be able to save a larger down payment yourself, ask the seller to cover closing costs, or look into other mortgage products like FHA loans, which require only 3.5% down and do not have the same income restrictions. A mortgage lender or HUD-approved counselor can explain these alternatives.

Timing also matters. If you are close to the income limit, wait until the next tax year if your income is expected to drop. If the home is slightly over the cap, negotiate the price down or look for a similar home that meets the requirement. Programs update their caps and income limits periodically, so check back if you were turned down in the past.

Frequently Asked Questions

Do I have to repay down payment assistance?

Most down payment assistance in Texas is a grant — you do not repay it. Some programs offer forgivable loans, which means you receive a loan but it becomes a grant if you stay in the home for a set period, usually 5 to 10 years. If you sell or move before that period ends, you may owe back part or all of the assistance. Read the program terms carefully to understand whether what you receive is a grant or a forgivable loan.

Can I use down payment assistance with an FHA loan?

Yes. Most down payment assistance programs work with FHA loans, conventional loans, and VA loans. The program does not care what type of mortgage you get — it only cares that you are a first-time homebuyer buying a home within its price cap and income limits. Tell your lender you are using down payment assistance so they can coordinate with the program at closing.

What if I already have a home under contract?

You can still apply, but move quickly. Programs need time to verify your information and approve the assistance before closing. If your closing date is fewer than 30 days away, call the program first and ask whether it can meet that timeline. Some can; others cannot. Do not assume — ask before you submit documents.

Can I use down payment assistance if I have bad credit?

Most programs do not have a minimum credit score, but your lender will. Lenders typically require a score of at least 580 to 620 for FHA loans and higher for conventional loans. Down payment assistance does not change your lender's credit requirements. If your credit is low, work on improving it before you apply, or ask a HUD-approved counselor about credit repair resources.

What if the program runs out of money before I close?

If the program exhausts its funding, your application may be placed on a waitlist or denied. This is why it is important to ask whether the program is currently accepting applications when you first call. If it is closed, ask when it expects to reopen. Some programs reopen on a predictable schedule; others depend on new grant funding. Check back periodically if you were turned down due to lack of funds.