Down Payment Assistance in Texas: How to Buy Without 20% Down
If you've been told you need 20% down to buy a home, here's some welcome news: many buyers put down far less, and down payment assistance in Texas can help cover some of what's left. For many first-time buyers, assistance is what turns "someday" into "this year."
I'm Taylor Ring, a Mortgage Loan Officer with Fairway Independent Mortgage (The Wood Group). I work with buyers throughout Central Texas, from Killeen, Temple, and Belton to Waco, Salado, Georgetown, Round Rock, Cedar Park, and Leander.
What Is Down Payment Assistance?
Down payment assistance is help, from a state agency, local government, or nonprofit, that can be used toward your down payment and, in many cases, your closing costs. It's used together with a first mortgage, such as an FHA, VA, USDA, or conventional loan.
DPA usually comes in one of these forms:
Grants
Assistance that typically doesn't need to be repaid if program terms are met.
Forgivable Second Loans
May be forgiven over time if you stay in the home and meet program requirements.
Deferred Second Loans
Repaid when you sell, refinance, or pay off the first mortgage.
Repayable Second Loans
A second loan with a monthly payment alongside your first mortgage.
Each structure comes with trade-offs. I break these down in detail in my guide to first-time home buyer grants in Texas.
Statewide Down Payment Assistance Programs in Texas
Texas has two main statewide sources of down payment help.
My First Texas Home (TDHCA)
The Texas Department of Housing and Community Affairs pairs a 30-year fixed-rate mortgage with down payment and closing cost assistance for eligible buyers. Designed primarily for first-time buyers (no primary residence owned in the last three years), with possible exceptions for veterans or targeted areas. Income and purchase price limits vary by county. Assistance up to 5% of the loan as a 0% second lien — either 30-year deferred repayable or 3-year deferred forgivable. Available only through participating lenders; a HUD-certified homebuyer education course is required.
TDHCATSAHC Down Payment Assistance
The Texas State Affordable Housing Corporation offers home buyer programs that may include down payment assistance. Some options are open to repeat buyers, and some are aimed at service professions. Programs include Homes for Texas Heroes and Home Sweet Texas; eligible buyers may receive up to 5% of the loan amount as a grant, a forgivable second lien, or a repayable second lien.
TSAHCLocal Assistance in Central Texas: Some cities and counties in our area, along with local nonprofits, have offered their own home buyer assistance at times. These programs can have tight funding windows and their own rules.
Who Qualifies for Down Payment Assistance in Texas?
Every program is different, but most look at the same core areas.
Income
Many DPA programs set maximum household income limits based on county and household size; we'll check the limits for your county.
Credit
You'll need to meet both the assistance program's minimum and the first mortgage's minimum.
Purchase Price and Property
Purchase price limits often apply, and the home generally needs to be your primary residence.
First-Time Buyer Status
Some programs require it, others don't. Not sure where you fall? We'll help you figure it out.
Homebuyer Education
Many programs require a homebuyer education course before closing.
A Central Texas Example
Buying in Killeen With Limited Savings
A first-time buyer in Killeen had steady income but limited savings and assumed they'd need years to save 20% down. Together, we explored TDHCA and TSAHC down payment assistance along with negotiated seller credits to help with closing costs. The big takeaway: there were real options to consider without 20% down, and we could compare them side by side before they made an offer.
Illustrative scenario, not an actual client transaction. Assistance and loan eligibility are subject to program and lender requirements.
Other Ways to Lower Your Cash to Close
Down payment assistance isn't the only tool. Depending on your loan and situation, you may also be able to use:
Low- or No-Down-Payment Loans
VA loans for eligible military buyers and USDA loans for eligible rural properties may allow no down payment.
Seller Credits
Toward closing costs, subject to negotiation and loan guidelines.
Gift Funds
From family, following your loan program's documentation rules.
Learn more about VA loans in Texas and USDA home loans in Texas.
How to Apply for Down Payment Assistance in Texas
Talk with a participating lender. Texas DPA programs are generally accessed through approved lenders, not applied for directly by the buyer.
Get pre-approved. We'll check your eligibility for both the first mortgage and assistance at the same time.
Complete homebuyer education, if required.
Shop within program limits. Your real estate agent should know your price ceiling.
Make an offer and close. Assistance funds are typically applied at closing.
Questions to Ask Before Choosing a DPA Program
I'll help you answer each one with real numbers for your scenario.
How does this program affect my interest rate and monthly payment?
Is the assistance a grant, forgivable, deferred, or repayable?
What happens if I sell or refinance in a few years?
Are there extra fees?
How does it compare with a standard low-down-payment loan without assistance?
Let's run your numbers.
Frequently Asked Questions
Questions about down payment assistance in Texas.
You may not need 20% down.
Taylor Ring, Mortgage Loan Officer, NMLS# 2809683 | Fairway Independent Mortgage Corporation, NMLS# 2289 | 127 Lake Rd Ste 300, Belton, TX 76513