Here's a sentence I say to clients more than almost anything else: you probably don't need to save 20% to buy a house in Texas. A lot of buyers, especially self-employed folks and first-time buyers, write themselves out of the market before they've even looked at the options, because somewhere along the way they picked up the idea that down-payment money has to come from a savings account. It doesn't. In Texas, it can come from a grant, a second-lien loan, or a bond-funded program, and most buyers have never heard of any of them.
Let's fix that. Here's exactly what's out there in 2026, how each type of assistance actually works, and what it looks like on the ground in Houston, Austin, and San Antonio.
Three Kinds of Money, and They Are Not the Same
Every down-payment assistance program in Texas falls into one of three buckets. Understanding the difference matters more than the headline percentage, because it determines whether you're getting free money or a loan with your name on it.
Grants. True grants never get repaid, period. TSAHC offers this option on some of its programs. If you take the grant version, there's no lien, no clock, and no catch beyond meeting the eligibility rules at closing.
Second-lien programs. This is the most common structure. The assistance shows up as a second mortgage behind your primary loan, usually at 0% interest with no monthly payment. Some are deferred, meaning you repay the balance only when you sell, refinance, or pay off the first mortgage. Others are forgivable, meaning the balance disappears in pieces (or all at once) after you've lived in the home for a set number of years, typically three to ten depending on the program.
Bond money. This is the one people ask about the least and understand the least. Certain Texas housing finance corporations issue tax-exempt mortgage revenue bonds, then use that money to fund below-market first mortgages paired with down-payment assistance. The Southeast Texas Housing Finance Corporation's 5 Star Texas Advantage Program is the best-known example, and despite the regional-sounding name, it's available to buyers across almost the entire state.
None of these are better or worse across the board. The right one depends on your income, your profession, your credit score, and how long you plan to stay in the home.
The Statewide Programs Everyone Should Know
TDHCA: My First Texas Home and My Choice Texas Home
The Texas Department of Housing and Community Affairs runs the state's largest down-payment program. It pairs a 30-year fixed first mortgage with up to 5% of your loan amount as a deferred, 0% interest second lien. You don't pay it back monthly, and you don't pay it back at all until you sell, refinance, or pay off the house. My First Texas Home is for first-time buyers, defined as anyone who hasn't owned a primary residence in the past three years. My Choice Texas Home drops that requirement, so repeat buyers can use it too.
You'll need a 620 minimum credit score, and income limits are set by county, which is exactly why the same program looks different depending on where you're buying.
TSAHC: Home Sweet Texas and Homes for Texas Heroes
The Texas State Affordable Housing Corporation gives you a choice most people don't expect: take up to 5% of your loan amount as a true grant with no repayment, or take it as a second lien that's forgiven after three years in the home. Home Sweet Texas is open to any income-eligible Texas buyer, first-time or not. Homes for Texas Heroes is the same money with a narrower audience, teachers, firefighters, EMS, police and correctional officers, veterans, and nursing faculty, often paired with a slightly better first-mortgage rate.
Minimum credit is 620 for FHA, VA, and USDA loans, and 640 for conventional.
SETH 5 Star Texas Advantage (the bond program)
This is your statewide bond-money option. It's available across nearly all of Texas, with the notable exception of Travis County and the cities of El Paso, McKinney, and Grand Prairie. There's no first-time buyer requirement, assistance comes as a grant or a three-year forgivable second lien, and it works with FHA, VA, USDA, and conventional loans. If TDHCA or TSAHC don't fit your situation, this is usually the next lender I check.
Houston: Where the City Money Runs Deep
Houston buyers have more layers to work with than almost anywhere else in the state.
City of Houston Homebuyer Assistance Program (HAP). As of 2026, the city increased its maximum subsidy, and current guidance puts it well above the old $50,000 ceiling for income-eligible, first-time buyers purchasing inside Houston city limits. It's structured as a deferred, forgivable loan, and it can go toward down payment, closing costs, or even principal reduction. You'll need to fall at or below 80% of area median income and complete a homebuyer education course.
Harris County Down Payment Assistance Program. If you're buying outside Houston's city limits, in Katy, Cypress, Spring, or Humble, for example, Harris County runs its own forgivable second-lien program for first-time buyers.
State programs stack on top. TDHCA, TSAHC, and SETH 5 Star all operate in Harris County too, and a Houston buyer using an FHA loan can sometimes combine city or county money with a state grant to walk into closing owing almost nothing out of pocket.
The honest caveat here: HAP funding levels and program caps get revised by city council, so the exact number changes more often than the state programs do. Confirm the current cap before you build a client's numbers around it.
Austin: Smaller Windows, Real Money
Austin's programs are generous, but the price caps and funding cycles make timing matter more here than in Houston or San Antonio.
City of Austin Down Payment Assistance Program. Up to $40,000 for income-eligible, first-time buyers purchasing inside Austin city limits, structured as a 0% deferred loan that's forgiven over five years for smaller amounts and ten years for the full $40,000. Funding is first-come, first-served, so a stalled pre-approval can genuinely push a buyer into the next funding cycle.
Travis County Hill Country Home DPA. This one covers all of Travis County, including Austin, and offers 4%, 5%, or 6% of the loan amount depending on the option selected. It's a good fallback for buyers just outside Austin's city boundary who still want local assistance.
One thing to flag: SETH 5 Star isn't available in Travis County, so Austin-area buyers who don't qualify for the city or county programs should lean on TDHCA or TSAHC instead.
Austin's home prices push more buyers up against county purchase-price limits than in Houston or San Antonio, so run the numbers early rather than after you've written an offer.
San Antonio: More Fragmented, Still Worth It
San Antonio doesn't have one single flagship program the way Houston has HAP. Instead, buyers piece together assistance from a few different sources.
SAHA's Homeownership Incentive Program (HIP), including HIP 120. Run by the San Antonio Housing Authority, HIP 120 extends eligibility up to 120% of area median income, which catches more middle-income buyers than most city programs do. It carries a 640 minimum credit score, a bit higher than the state programs.
City of San Antonio down-payment assistance. This has the tightest income ceiling of the local options, so it tends to serve buyers at the lower end of the income spectrum.
Neighborhood Housing Services of San Antonio (NHSSA). A nonprofit offering a second-lien loan for down payment and closing costs, with a credit floor as low as 580, the most flexible credit requirement of any San Antonio program.
No standalone Bexar County program. Unlike Harris and Travis counties, Bexar County doesn't run its own DPA fund. Buyers purchasing outside San Antonio's city limits generally lean on TDHCA, TSAHC, or SETH 5 Star instead, all three of which are active throughout Bexar County.
For San Antonio buyers with a credit score between 620 and 639, the state programs are often the only door open, since SAHA's 640 floor rules them out.
The Fine Print Nobody Bothers to Explain
A few truths that matter more than the marketing:
- •You generally can't stack two second-lien DPA programs on the same loan. You pick one. A lender who tells you otherwise without running the actual approval isn't doing you any favors.
- •Forgivable doesn't mean free of conditions. If you sell, refinance, or move out before the forgiveness period ends, whether that's three years or ten, you may owe back some or all of the assistance.
- •Income limits are set by county and household size, and they shift. The same household that qualifies in Harris County might not qualify in Travis County, and vice versa.
- •"Available now" isn't permanent. City and county-funded programs, in particular, run on budgets that get depleted and replenished on their own schedules. What's open in January might be paused by summer.
None of that is a reason to avoid these programs. It's a reason to work with someone who checks the current terms before promising you a number.
Let's Look at Your Deal
Down-payment assistance isn't a consolation prize for buyers who couldn't save enough. It's a legitimate financing tool, and in a lot of cases it's the difference between renting for another two years and owning a home this year. The program that makes sense for a teacher in San Antonio isn't the same one that makes sense for a self-employed buyer in Houston or a repeat buyer in Austin.
If you've been told "no" somewhere else, or you've just assumed you don't qualify, let's actually run your numbers against what's currently funded and open in your area. That's a five-minute conversation, and it beats guessing.
