Down Payment Assistance Programs in Texas: Where to Look and How They Work
Texas down payment help comes from city and county programs, nonprofits, and a few state-backed options—not from a single statewide fund
Texas does not run one central down payment assistance program. Instead, help comes from your city or county housing authority, community development nonprofits, and lenders who offer their own programs. Some programs cover part of your down payment; others cover closing costs or both. The amount varies widely—from a few thousand dollars to programs that cover 15 or 20 percent of the purchase price. Your first step is to find out what exists in your specific county or city, because availability and rules change by location.
Most programs require you to complete a homebuyer education course, show proof of income, and have a credit score in a certain range—often 580 or higher for FHA loans paired with assistance. Some are income-limited; others are not. A few programs require you to work with a specific lender or real estate agent. The fastest way to learn what you can actually use is to call your local housing authority or contact a HUD-approved housing counselor, both of whom keep current lists.
Key Takeaways
- Texas down payment programs are run by cities, counties, and nonprofits—not by the state—so what is available depends entirely on where you want to buy.
- Most programs require a homebuyer education course, proof of income, and a credit score of 580 or higher, though requirements vary by program.
- Your local housing authority or a HUD-approved housing counselor can tell you in one call which programs serve your area and whether you meet the basic requirements.
- Some programs give you a grant (money you do not repay), while others are forgivable loans that become a grant if you stay in the home for a set number of years.
- Down payment assistance often works alongside FHA loans or conventional loans with lower down payment requirements, so your lender and the assistance program must coordinate.
How to find programs in your county or city
Start by calling your county or city housing authority. In Texas, most large cities—Houston, Dallas, San Antonio, Austin, Fort Worth—run their own down payment assistance programs. If you live in a smaller city or unincorporated county, your county housing authority or county commissioners office can tell you what exists locally. Ask specifically: "Do you have down payment assistance for first-time homebuyers?" and "What are the income limits and credit score requirements?"
If your local authority does not run a program, ask for a referral to nonprofits in your area. Many Texas counties have community action agencies or community development corporations that manage down payment funds. You can also search the HUD website for HUD-approved housing counselors in your zip code; they maintain lists of local programs and can discuss which ones fit your situation.
A third option is to contact lenders directly. Some banks and credit unions in Texas offer down payment assistance as part of their mortgage products. Ask your lender whether they have a down payment grant or forgivable loan program, and whether it can be combined with other assistance you find.
Grants versus forgivable loans: what you actually owe
Some Texas programs give you a grant—money that is yours to keep, no repayment required. Other programs offer a forgivable loan, which works differently: you borrow the money, but the loan is forgiven (erased) 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 have to repay part or all of the loan.
A forgivable loan is not assistance programs upfront, but it can be assistance programs if you plan to stay. The trade-off is that it shows up on your credit report as a debt, which can affect how much you can borrow for the mortgage itself. Ask any program whether assistance is a grant or a loan, and if it is a loan, what happens if you move in year three or year seven.
Some programs mix the two: they might give you a grant for part of the down payment and a forgivable loan for closing costs. Read the paperwork carefully or ask the program to explain it in writing before you commit.
Income limits and credit score requirements
Most Texas down payment programs limit who can use them based on income. Common thresholds are 80 percent of the area median income (AMI) or 100 percent of AMI, though some programs go higher. For example, in a county where AMI is $70,000, an 80 percent limit means your household income cannot exceed about $56,000. Programs that are income-limited tend to offer larger grants or better terms because they target lower-income buyers.
Credit score requirements vary. Many programs accept a score of 580 or higher, which aligns with FHA loan minimums. Some require 620 or higher. A few programs work with borrowers below 580 if they have compensating factors—like a larger down payment saved or a co-signer. Ask the program what score they require and whether exceptions exist.
If your credit score is below the program's minimum, you have two options: wait and work on raising your score, or ask whether the program has a path for borrowers with lower scores. Some nonprofits offer credit counseling and can help you understand what is hurting your score and how long it typically takes to improve.
Homebuyer education and other requirements
Nearly every Texas down payment program requires you to complete a homebuyer education course before you close on the home. These courses cover budgeting, understanding your mortgage, property taxes, insurance, and what to expect during the buying process. Most are offered online and take 4 to 8 hours to complete. Some programs require the course before you even apply; others require it before closing.
You will also need to provide proof of income (recent pay stubs or tax returns), proof of employment, and a signed purchase agreement or letter of intent from a real estate agent. Some programs require you to work with a HUD-approved housing counselor or a specific lender. A few have first-time homebuyer requirements—meaning you cannot have owned a home in the past 3 years.
Ask the program for a complete list of documents before you start gathering them. Having everything ready speeds up the process, which typically takes 2 to 6 weeks from application to closing.
How down payment assistance works with your mortgage
Down payment assistance does not replace a mortgage—it reduces how much you have to borrow. If a home costs $200,000 and you have $10,000 saved, a program that gives you $15,000 means you now have $25,000 down (12.5 percent) instead of 5 percent. You still need a mortgage for the remaining $175,000.
The assistance must be coordinated with your lender. Some lenders have restrictions on where down payment money can come from; they may not allow gifts or grants from certain sources, or they may require the assistance to come from a specific program. Before you apply for assistance, tell your lender what program you are considering and ask whether they accept it. If your lender does not, you may need to switch lenders or choose a different assistance program.
FHA loans (which allow down payments as low as 3.5 percent) often pair well with down payment assistance because you are borrowing less to begin with. Conventional loans with 3 percent down also work, though some programs require FHA or specify which loan types they support.
What to do if no program serves your area
If your city or county does not have a down payment assistance program, you have several alternatives. First, ask your lender whether they offer down payment grants or reduced-rate mortgages for first-time buyers—many do, even if no government program exists locally. Second, check whether you may have access to for a state or federal program that is not county-specific; some nonprofits run statewide programs that serve multiple Texas regions.
Third, explore whether you are may be able to access for an FHA loan with a lower down payment requirement (3.5 percent) or a VA loan if you are military or a veteran. These do not provide assistance directly, but they reduce how much you need to save upfront. Fourth, consider whether a family member can gift you down payment money; most lenders allow gifts if you document them properly.
If you are still short on funds, a HUD-approved housing counselor can review your full situation and suggest options you may not have considered. Their service is free, and they work with programs across Texas.
Frequently Asked Questions
Can I use down payment assistance if I already have a mortgage pre-approval?
Yes, but tell your lender immediately which program you are considering. Your pre-approval is based on your current financial situation; adding assistance changes the numbers. Your lender needs to re-verify that you still may have access to and that they accept the specific program you are using.
What happens to down payment assistance if the sale falls through?
If you do not close on the home, the assistance is typically cancelled and you receive nothing. Some programs may allow you to reapply for a future purchase, but that varies. Ask the program what happens to your application if the deal ends.
Do I have to repay down payment assistance if I sell the house in five years?
It depends on whether the assistance is a grant or a forgivable loan. Grants are yours to keep regardless of when you sell. Forgivable loans may require repayment if you sell before the forgiveness period ends—often 5 to 10 years. Read your loan documents or ask the program to explain the repayment rules in writing.
Can I combine down payment assistance from two different programs?
Some programs allow it; others do not. Your lender has the final say, because they need to document all sources of down payment funds. Ask each program whether they allow stacking, and ask your lender whether they will accept multiple assistance sources before you apply to more than one program.
What if my credit score is too low for the program I found?
Ask the program whether they have exceptions or whether they work with borrowers who are actively improving their credit. Some nonprofits offer credit counseling to help you understand what is affecting your score and how long improvement typically takes. You can also ask your lender whether they have a program with lower credit requirements.