Texas is the most consequential first-time buyer market in the country right now — and that is not hype. The Lone Star State added more residents over the past decade than any other state, the job market across Dallas, Houston, and Austin remains among the strongest in the nation, and in 2026 prices are actually pulling back in the two biggest metros. Redfin’s February 2026 data shows the statewide median sale price at $334,100, down 1.0% year over year, with 91 average days on market — the most buyer-favorable conditions since before the pandemic. Dallas is down 1.4%. Houston is one of the only major Texas metros still posting positive growth, at +3.2%. Austin, which peaked above $600,000 in 2022, has corrected sharply to $520,000 with buyers now holding significant negotiating leverage.
Find Texas First Time Home Buyer Programs
The even better news: Texas has two full state housing agencies — the Texas Department of Housing and Community Affairs (TDHCA) and the Texas State Affordable Housing Corporation (TSAHC) — each running independent DPA programs that can put up to 5% of the loan amount in a buyer’s pocket at closing.
Stack either with city-specific grants (Dallas offers up to $60,000, Houston up to $50,000, Austin up to $40,000) and many first-time buyers are closing with less than $3,000 out of pocket. This guide covers every major program available in March 2026, with current income limits, 2026 loan limits, and verified lender contacts from Dallas and Houston.
The RefiGuide can help you compare loan programs, Texas mortgage rates and lenders with state-backed down-payment assistance, home buying grants, government and conventional loans at no cost.
Texas Housing Market — February 2026 Snapshot
Texas is not one housing market — it is four distinct metro markets with different price points, inventory levels, and buyer conditions. Knowing your specific metro changes which programs you qualify for and how hard you can negotiate.
| Metro / Region | Median Sale Price | Year-Over-Year | Avg. Days on Market | Buyer Environment |
|---|---|---|---|---|
| Dallas (city) | $411,000 | ▼ −1.4% | 76 days | Buyer-favorable; sharpest correction in TX |
| Houston (metro) | $324,200 | ▲ +3.2% | 91 days | Most affordable major market; modest growth |
| Austin (city) | $520,000 | ▲ +0.5% | 96 days | Buyers have leverage unseen since 2019 |
| San Antonio | ~$293,000 | ▼ −1.8% | 84 days | Most affordable of the major 4; price cuts common |
| Texas (statewide) | $334,100 | ▼ −1.0% | 91 days | Near 5-month supply; buyer-friendly statewide |
| Sources: Redfin February 2026; Texas Real Estate Research Center (TRERC), March 2026. Current 30-year fixed rate: 6.22% (Freddie Mac PMMS, March 19, 2026). | ||||
What this means for first-time buyers: Over two-thirds of Texas home sellers accepted price cuts of 3% or more in late 2025, according to TRERC. That negotiating environment is still in play as of March 2026. Houston’s relative affordability combined with its positive price trajectory makes it the strongest long-term value for buyers who want to build equity quickly. Dallas suburbs offer the best blend of DPA program access and price correction. Austin — despite its higher median — gives buyers the most leverage they have had in five years.
How Much Down Payment Do You Need in Texas?
The table below shows the minimum cash required at closing for each major Texas metro before accounting for any DPA programs. This is your baseline target — and the programs in this guide can cover most or all of it.
| Metro | Median Price | 3% Down (Conventional) | 3.5% Down (FHA) | + Est. Closing Costs (3%) | Total Without DPA |
|---|---|---|---|---|---|
| Dallas (city) | $411,000 | $12,330 | $14,385 | $12,330 | ~$26,715 |
| Houston | $324,200 | $9,726 | $11,347 | $9,726 | ~$21,073 |
| Austin | $520,000 | $15,600 | $18,200 | $15,600 | ~$33,800 |
| San Antonio | $293,000 | $8,790 | $10,255 | $8,790 | ~$19,045 |
| Closing costs estimated at 3% of purchase price. Texas actual closing costs typically range 2–5% depending on title fees, property taxes, and prepaids. TDHCA and TSAHC DPA of up to 5% can cover all or most of the amounts shown. | |||||
What Texas Loan Officers Are Saying in 2026
“The biggest mistake I see Dallas-area first-time buyers make right now is assuming DPA programs are only for people buying cheap homes. The TSAHC grant gives you 5% on any purchase price within the program limits — on a $400,000 Dallas home, that’s $20,000 at closing that you never have to repay. Combined with the current price corrections across Dallas-Fort Worth suburbs, buyers who get pre-approved and move quickly are closing on homes they wouldn’t have been able to touch 18 months ago. My advice: don’t wait for rates to hit 5%. The savings on a negotiated price cut today are more valuable than waiting for a rate that may never arrive.”
— Everett Financial d/b/a Supreme Lending, Dallas, TX
NMLS #2129 | 14801 Quorum Dr., Suite 300, Dallas, TX 75254 | 877-350-5225
Verified: nmlsconsumeraccess.org | Participates in TDHCA and TSAHC programs statewide
“Houston is one of the most misunderstood first-time buyer markets in the country. The national headlines focus on Austin’s correction, but Houston is quietly the best story in Texas right now — positive price appreciation, the most affordable major metro median in the state, and 91 days on market giving buyers real negotiating room. Add the TSAHC 5% grant or TDHCA’s forgivable DPA on top of a Houston income limit that goes up to about $115,000 for most households, and we are helping buyers close with less than $2,500 out of pocket on a regular basis. The buyers who win here are the ones who start the pre-approval process first and worry about the ‘perfect rate’ second.”
— Cornerstone Home Lending, a division of Cornerstone Capital Bank, SSB, Houston, TX
NMLS #2258 | 1177 West Loop South, Suite 700, Houston, TX 77027 | 713-621-4663
Verified: nmlsconsumeraccess.org | TSAHC and TDHCA approved lender | Participates in Homes for Texas Heroes program
Texas First-Time Home Buyer Programs — 2026 Overview
Texas first-time buyer assistance is administered through two independent state agencies:
TDHCA (Texas Department of Housing and Community Affairs) and TSAHC (Texas State Affordable Housing Corporation). Both require that buyers work through an approved lender — you cannot apply directly to either agency.
The table below summarizes the five major programs. (Source: tdhca.texas.gov and tsahc.org, verified March 2026.)
| Program | Agency | Max Assistance | Type | Repayment | Min. Credit Score | First-Time Buyer Required? |
|---|---|---|---|---|---|---|
| My First Texas Home | TDHCA | Up to 5% of loan amount | 0% interest 2nd mortgage, forgivable after 3 years | Forgiven at 3 yrs; repaid if sold/refi’d early | 620 | Yes (or veteran) |
| My Choice Texas Home | TDHCA | Up to 5% of loan amount | 0% interest 2nd mortgage, forgivable after 3 years | Forgiven at 3 yrs; repaid if sold/refi’d early | 620 | No — open to repeat buyers; higher income limits |
| Home Sweet Texas | TSAHC | Up to 5% of loan amount | Grant (never repaid) OR 3-year forgivable 2nd lien | Grant = no repayment; loan = forgiven at 3 yrs | 620 | Yes |
| Homes for Texas Heroes | TSAHC | Up to 5% of loan amount | Grant OR 3-year forgivable 2nd lien | Same as Home Sweet Texas | 620 | No — open to teachers, fire/EMS, police, veterans |
| Texas MCC (Mortgage Credit Certificate) | TDHCA / TSAHC | Up to $2,000/yr federal tax credit | Federal tax credit (20% of mortgage interest) | No repayment — tax credit for life of loan | 620 | Yes (stackable with DPA) |
| Source: tdhca.texas.gov and tsahc.org, verified March 2026. All programs require a TDHCA- or TSAHC-approved lender and a 30-year fixed-rate first mortgage (FHA, VA, USDA, or approved conventional). Homebuyer education course required for all programs. Note: TSAHC’s standalone Mortgage Credit Certificate program was discontinued — MCC is now available only when paired with TDHCA or TSAHC DPA loans. Verify current availability with your lender. | ||||||
TDHCA — My First Texas Home
TDHCA’s flagship program provides a 30-year fixed-rate mortgage paired with up to 5% of the loan amount as a deferred, 0% interest second mortgage for down payment and closing costs. The DPA is forgiven in full after three years of occupancy — meaning if you stay in the home for three years without selling or refinancing, the second mortgage disappears completely. If you sell or refinance within three years, the DPA must be repaid. Income limits vary by county and household size, generally ranging from $90,000 to $130,000 for a family of four. Purchase price limits in Austin (Travis County) are approximately $510,939; Dallas-Fort Worth limits range from $577,842 to $706,251 depending on the specific county. (Source: TDHCA, verified March 2026.)
Eligibility: First-time buyer (no homeownership in past three years) or veteran. Minimum 620 FICO. 30-year fixed mortgage only. Homebuyer education course required. Must be primary residence.
TSAHC — Home Sweet Texas and Homes for Texas Heroes
TSAHC operates two programs with the same DPA structure but different eligibility pools. Home Sweet Texas is open to all income-eligible first-time buyers statewide. Homes for Texas Heroes is specifically for teachers, police and corrections officers, firefighters, EMS personnel, and veterans — and does not require first-time buyer status for Heroes occupations. Both programs offer the same choice: a true grant (never repaid under any circumstance) or a three-year forgivable second lien. The grant option is the strongest DPA available in Texas for buyers who qualify, because there are no repayment triggers whatsoever — you can sell or refinance the following year and owe nothing back. Income limits are similar to TDHCA, varying by county. (Source: tsahc.org, verified March 2026.)
City-Level DPA Programs — Dallas, Houston, Austin
For buyers purchasing within city limits, local programs can provide significantly larger assistance than state programs. These cannot generally be stacked with state DPA but can be combined with the Texas MCC:
- City of Dallas: Up to $60,000 in down payment and closing cost assistance for income-eligible buyers within Dallas city limits. Income limits at 80% AMI. Requires homebuyer education and occupancy for the full loan term.
- City of Houston: Up to $50,000 for income-qualifying buyers. Multiple programs through the Houston Housing and Community Development Department. Income limits typically at 80% AMI.
- City of Austin: Up to $40,000 via the Austin Down Payment Assistance Program. 0% interest loan, forgiven after 5 years (amounts under $14,900) or 10 years. Income limit approximately $72,000 for a family of four at 80% AMI — stricter than state programs.
Texas Mortgage Credit Certificate (MCC)
The MCC converts 20% of annual mortgage interest paid into a direct federal tax credit, capped at $2,000 per year. Unlike a deduction, this is a dollar-for-dollar reduction in your tax bill. On a $325,000 Texas home at 6.22%, the MCC saves approximately $167/month in effective housing cost. Over 30 years, cumulative MCC savings typically exceed $60,000. The MCC can be stacked with TDHCA or TSAHC DPA — your lender initiates the application at closing. Note: TSAHC’s standalone MCC program was discontinued; MCC is now only issued in conjunction with TDHCA or TSAHC first mortgage programs.
2026 Texas Loan Limits — FHA and Conforming
Loan limits determine the maximum amount you can borrow under each program. Texas has mostly standard-cost counties with a few higher-limit exceptions around Austin and surrounding counties.
Understanding your county’s limit before you shop prevents choosing a home that exceeds the program cap.
| County / Area | FHA Limit (1-Unit) | Conforming Limit (Fannie/Freddie) | Notes |
|---|---|---|---|
| Most Texas Counties | $524,225 | $806,500 | Standard baseline — covers most of TX including Dallas, Houston, San Antonio |
| Travis County (Austin) | $571,550 | $806,500 | Higher FHA limit due to Austin’s elevated home prices |
| Williamson, Hays, Caldwell, Bastrop Counties | $571,550 | $806,500 | Austin MSA suburbs — same elevated limit as Travis County |
| TDHCA / TSAHC Purchase Price Caps | Varies by county | Austin: ~$510,939 | DFW: $577,842–$706,251 | Program-specific caps — may be lower than FHA limits; verify with lender |
| Sources: HUD FHA Mortgage Limits, FHFA Conforming Loan Limits, TDHCA program guidelines — all verified March 2026. Check exact county limits at hud.gov/program_offices/housing/sfh/lender/origination/mortgage_limits before going under contract. | |||
FHA vs. Conventional: Which Is Right for Texas First-Time Buyers?
Most TDHCA and TSAHC programs are compatible with both FHA and conventional loans — so which you choose matters primarily for long-term cost and credit score threshold. Understanding the differences between FHA and conventional loans before you apply can save you tens of thousands over the life of the loan.
| Factor | FHA Loan | Conventional (HFA) | Best for TX Buyers |
|---|---|---|---|
| Min. credit score | 580 (3.5% down); 500 (10% down) | 620 for TX programs | FHA if score under 620 |
| Min. down payment | 3.5% | 3% (HomeReady/Home Possible) | Tie (DPA covers both) |
| TDHCA/TSAHC DPA compatibility | Fully compatible — 5% DPA available | Fully compatible — 5% DPA available | Tie |
| Mortgage insurance | MIP: 0.55%/yr — stays for life of loan if <10% down | PMI: ~0.5–1%/yr — cancellable at 20% equity | Conventional (long-term savings) |
| 2026 TX loan limit (most counties) | $524,225 | $806,500 | Conventional if buying above $524K |
| DTI flexibility | Up to 57% with compensating factors | Up to 50% for HFA programs | FHA if DTI above 50% |
| 10-year MIP cost on $325K TX loan | ~$17,800 (permanent if <10% down) | ~$8,000–$12,000 (cancellable) | Conventional saves ~$6,000–$10,000 |
| Rule of thumb: FHA is better if your credit score is below 620 or DTI is above 50%. Conventional is better if your score is 620+ and you plan to stay long enough to build equity and cancel PMI. See our guide on FHA mortgage requirements. | |||
Texas Housing-Approved Lenders — 2026
You must use a TDHCA- or TSAHC-approved lender to access any of the programs described in this guide. Not all approved lenders offer every program. Verify current licensing at nmlsconsumeraccess.org before applying. The two Texas-based lenders quoted in this article:
| Lender | NMLS # | Location | Programs | Phone |
|---|---|---|---|---|
| Everett Financial d/b/a Supreme Lending | #2129 | 14801 Quorum Dr., Ste 300, Dallas, TX 75254 | TDHCA, TSAHC, FHA, VA, USDA, Conventional — statewide | 877-350-5225 |
| Cornerstone Home Lending (div. of Cornerstone Capital Bank) | #2258 | 1177 West Loop South, Ste 700, Houston, TX 77027 | TDHCA, TSAHC, Homes for Texas Heroes, FHA, VA — statewide | 713-621-4663 |
| Always obtain quotes from at least 3 approved lenders before committing. Full lists of TDHCA-approved lenders at tdhca.texas.gov and TSAHC-approved lenders at tsahc.org. | ||||
Illustrative Case Study — Texas First-Time Buyer, 2026
Disclosure: The following is an illustrative example based on typical TSAHC Home Sweet Texas borrower scenarios. Names and identifying details are representative, not those of a specific individual. Loan amounts, program terms, and income figures reflect actual 2026 TDHCA/TSAHC program parameters.
| Buyer Profile & Transaction — Houston Metro, 2026 | |
|---|---|
| Buyer Profile | 31-year-old high school teacher, Harris County, household income $72,000, credit score 644, renting for 3 years, no prior homeownership. Qualifies for both TSAHC Homes for Texas Heroes (educator) AND TSAHC grant option. |
| Purchase Price | $310,000 — single-family home, Houston suburbs (Katy area) |
| Income Limit Check | TSAHC Harris County limit for family of 3: ~$110,000. At $72,000, well under limit. ✅ Qualifies |
| First Mortgage | FHA loan at 6.25% (30-year fixed) — base loan $299,150 |
| TSAHC Heroes Grant | 5% of $299,150 = $14,958 GRANT — applied to down payment and closing costs. No repayment ever. |
| Texas MCC | 20% of annual interest paid, capped at $2,000/yr = ~$167/month effective federal tax savings |
| Out-of-Pocket at Closing | ~$2,800 (inspection $450, homebuyer education $99, prepaid homeowners insurance, remaining prepaid escrow after grant applied) — less than 1% of purchase price |
| Monthly P&I Payment | ~$1,841 at 6.25% on $299,150 |
| Effective Net Housing Cost (with MCC) | ~$1,674/month vs. $1,950/month in prior rent — savings of $276/month vs. renting |
| Key Lesson | TSAHC Heroes grant was available year-round with no lottery — no waitlist. Because the buyer worked with a TSAHC-approved lender who knew the program, the grant was reserved at the time of pre-approval. Total time from first call to closing: 41 days. |
Tips for Buying Your First Home in Texas
Check your credit score: Get free reports at AnnualCreditReport.com. TDHCA and TSAHC programs require a minimum 620. FHA loans accept 580 with 3.5% down. Improving your score from 610 to 640 before applying can open all state DPA programs.
Get fully pre-approved with a program-approved lender: A full pre-approval — not just pre-qualification — requires income documentation, a credit pull, and asset verification. Critically: your lender must be TDHCA- or TSAHC-approved to access state DPA. Ask explicitly before you start.
Complete homebuyer education: Required for all TDHCA and TSAHC programs. One approved borrower must complete a HUD-approved online course (approximately $99, completed in 4–8 hours). Certificates are valid for 2 years.
Check both TDHCA and TSAHC: Run your eligibility through both agencies before choosing. If you qualify for a Heroes occupation, TSAHC’s grant option may be superior to TDHCA’s forgivable loan. If your metro has a strong city-level program (Dallas’s $60,000 assistance), compare that against the state option.
Find your home and sign a purchase contract: TSAHC DPA reservations are made by your lender at pre-approval. TDHCA DPA is reserved after you have a signed purchase contract. Fund reservations are first-come, first-served — don’t delay.
Complete loan processing: TDHCA and TSAHC programs add approximately 1–2 weeks to a standard closing timeline. Budget 40–55 days total from contract to close.
Close and take ownership: DPA funds close simultaneously with your first mortgage. If using MCC, the certificate is issued at closing and used when filing your federal taxes.
Texas’s 40–55 day closing timeline with state DPA programs requires early planning — review our guide to zero down payment options and FHA loan requirements before you start searching. For veterans, our VA home loan guide covers how VA loans interact with TSAHC Heroes programs — veterans can often combine both for maximum benefit.
Federal Home Loan Options for Texas First-Time Buyers
- FHA: Minimum 580 credit score, 3.5% down. 2026 limit: $524,225 for most TX counties, $571,550 in Travis/Williamson/Hays counties. Most widely used first-time buyer loan in Texas. Fully compatible with TDHCA and TSAHC DPA.
- Conventional (HomeReady/Home Possible): 3% down, PMI cancellable at 20% equity. Better long-term cost if credit score is 620+. 2026 conforming limit: $806,500.
- VA: Zero down payment for eligible veterans and active-duty service members. No PMI. Fully compatible with TSAHC Homes for Texas Heroes — first-time buyer requirement is waived for veterans using Heroes. Texas has a very large active-duty population (Fort Hood, Fort Sam Houston, NAS Corpus Christi, JRB Fort Worth).
- USDA: 100% financing for buyers purchasing in eligible rural or suburban areas. Many Texas communities outside the four major metros qualify. Income limits apply. Compatible with TDHCA DPA in some circumstances.
Frequently Asked Questions — Texas First-Time Home Buyers
What qualifies as a first-time home buyer in Texas?
In Texas, a first-time home buyer is defined as someone who has not owned a primary residence in the past three years. Veterans are exempt from this requirement for TSAHC Homes for Texas Heroes and TDHCA programs. Buyers purchasing in HUD-designated targeted areas also have expanded eligibility. If you owned a home before 2023 and have been renting since, you qualify under most Texas programs in 2026.
What is the income limit for TDHCA My First Texas Home in 2026?
Income limits vary by county and household size. In most major Texas metros, limits range from $90,000 to $130,000 for a family of four. Dallas-Fort Worth purchase price limits range from $577,842 to $706,251 by county. Austin (Travis County) purchase price cap is approximately $510,939. Verify your exact county limit at tdhca.texas.gov or with a TDHCA-approved lender. (Source: TDHCA, verified March 2026.)
Is the TSAHC DPA a grant or a loan?
TSAHC offers two options for every eligible buyer: a true grant (never repaid under any circumstances) or a three-year deferred forgivable second lien. If you choose the grant, it is free money regardless of how soon you sell or refinance. If you choose the forgivable loan, it is forgiven in full after three years of occupancy — but must be repaid if you sell or refinance within three years. Both provide up to 5% of the loan amount. Most buyers who qualify for the grant option should choose it.
Can I use Homes for Texas Heroes if I’m not a teacher or first responder?
No. Unlike Florida’s Hometown Heroes (which is open to all Florida employers), Texas’s Homes for Texas Heroes is specifically for teachers, police and corrections officers, firefighters, EMS personnel, and veterans. If you do not work in one of these occupations, you qualify for TSAHC’s Home Sweet Texas program instead — which has identical DPA terms and the same grant/forgivable loan options.
What is the 2026 FHA loan limit in Texas?
The baseline FHA limit for most Texas counties is $524,225 for a single-family home. Travis County (Austin) and its surrounding counties (Williamson, Hays, Caldwell, Bastrop) have a higher limit of $571,550. The conforming loan limit (Fannie Mae/Freddie Mac) for most Texas counties is $806,500. See our full 2026 FHA loan limits guide for county-by-county figures.
Is Dallas, Houston, or Austin a better market for first-time buyers in 2026?
For budget-conscious first-time buyers, Houston and Dallas suburbs offer the strongest combination of affordability and DPA program access. Houston’s $324,200 median is the most affordable of the four major metros, with positive price growth suggesting long-term equity potential. Dallas is down 1.4% year-over-year with 29% of listings cutting prices — giving buyers real negotiating power on a $411,000 median. Austin remains the most expensive at $520,000 but buyers now have 96 average days on market, the most leverage since 2019. (Source: Redfin, February 2026.)
What credit score do I need for Texas DPA programs?
Most TDHCA and TSAHC programs require a minimum 620 FICO score. Some conventional program options or lender overlays may require 640. FHA loans within these programs accept 580 for a 3.5% down payment structure. If your score is below 620, focus on targeted credit improvement — most buyers reach 620 within 3–6 months with concentrated effort on utilization reduction and any collection account resolution.
Cam I Buy a Home in Texas with Bad Credit?
Buying a home with bad credit in Texas is possible by exploring FHA loans or other government-backed programs with lower credit score requirements. Improve approval chances by increasing your down payment, reducing debt, and working with lenders offering flexible options like Non-QM loans.
Reviewed March 2026 by Peter Miller, Nationally Syndicated Real Estate Columnist & Author of Common Sense Mortgage | Program data verified against TDHCA and TSAHC guidelines, March 2026. Last updated: March 21, 2026.
HUD-Approved Housing Counseling
Free, independent housing counseling is available through HUD-approved agencies across Texas. Counselors can help you review finances, understand program eligibility, and prepare your application — at no charge. Call 800-569-4287 or visit hud.gov/counseling. Texas homebuyer education requirements for TDHCA and TSAHC programs can be satisfied through HUD-approved agencies.
Sources and References
- Texas Department of Housing and Community Affairs — Texas Homebuyer Program. tdhca.texas.gov. Verified March 2026.
- Texas State Affordable Housing Corporation — Home Buyer Programs. tsahc.org. Verified March 2026.
- Redfin. Texas Housing Market, February 2026. redfin.com. Accessed March 2026.
- Texas Real Estate Research Center (TRERC). Texas Housing Insight, February 2026. Via Republic Title. Accessed March 2026.
- National Mortgage Professional. Texas Housing Market Weakens as 2026 Begins. February 2026.
- Freddie Mac PMMS. Weekly Mortgage Survey, March 19, 2026. 30-year fixed: 6.22%.
- NMLS Consumer Access — lender verification. nmlsconsumeraccess.org.
About Bryan Dornan
Bryan Dornan is a financial journalist and mortgage industry veteran with nearly 30 years of experience as a lender, loan officer, mortgage broker, and chief marketing officer. He currently serves as Chief Editor of RefiGuide.org, where he has built one of the most trusted mortgage education platforms in the United States. Bryan has founded multiple mortgage and digital marketing companies throughout his career and remains focused on helping homeowners leverage home equity wisely while making affordable homeownership accessible to everyday Americans. Bryan's continual focus is to educate homeowners how to leverage home equity while also promoting affordable home-ownership to consumers like you across the United States. He is a licensed California Real Estate Broker DRE: #01203791. and writes for RealtyTimes, Patch, Buzzfeed, Medium and other national publications. Find him on Twitter, Muckrack, and Linkedin
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