Texas offers a mix of state-run programs and widely available federal loan options that make it easier to buy your first home. Whether you’re just starting to save or nearly ready to close, here are the biggest benefits first-time buyers can use in Texas.
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Most first-time buyers in Texas start with a government-backed or low-down-payment mortgage. These programs are designed to lower the barrier to entry — whether that means requiring less money upfront, being more flexible on credit, or waiving certain fees. Each option comes with its own pros and cons, and the best fit depends on your income, location, and eligibility.
Alongside federal loan options, Texas offers unique programs through two housing agencies: the Texas Department of Housing & Community Affairs (TDHCA) and the Texas State Affordable Housing Corporation (TSAHC). These programs are designed to support both first-time buyers statewide and specific groups like teachers, firefighters, and veterans.
Saving for a down payment is often the biggest hurdle for first-time buyers. Texas agencies make this easier with grants and deferred loans that cover part of the upfront costs, plus tax credits that reduce your yearly expenses.
The most effective path for first-time buyers is often to layer multiple benefits. In Texas, for example, you could take out an FHA loan, add TSAHC’s down payment assistance, and secure a Mortgage Credit Certificate for ongoing tax savings. When paired with consistent savings in a dedicated account, these programs can dramatically reduce upfront costs and make homeownership feel attainable.
Texas, however, does not currently offer a state-level FHSA program. That means there’s no special tax deduction or credit for setting up a dedicated account here.
But that doesn’t mean you’re out of options. Texas buyers can still open a dedicated home savings account, set specific goals, and automate contributions — all strategies that make it easier to stay on track. With Foyer, you can also explore match opportunities and partner programs that stack on top of what the state already offers
Instead of a state FHSA, Texas offers valuable alternatives like Mortgage Credit Certificates (MCCs) through TDHCA and TSAHC. MCCs allow you to claim a portion of your annual mortgage interest — up to $2,000 per year — as a federal income tax credit. This can put real money back in your pocket year after year, helping offset costs once you’ve purchased your home.
Beyond federal loan options, Texas buyers have access to strong statewide programs through the Texas Department of Housing & Community Affairs (TDHCA) and the Texas State Affordable Housing Corporation (TSAHC). These agencies provide affordable mortgages, down payment assistance, and tax credits that can make homeownership more achievable.
Both TDHCA and TSAHC partner with approved lenders across Texas to provide fixed-rate, 30-year mortgages tailored for first-time buyers. These mortgages often come bundled with down payment assistance or the ability to add a Mortgage Credit Certificate (MCC) for long-term savings.
Saving enough for a down payment and closing costs is often the hardest part of buying a first home. Texas housing agencies make it easier by offering multiple forms of assistance.
Some TDHCA programs provide down payment help in the form of a set dollar amount grant or loan, which can be applied toward closing costs or part of the down payment.
TSAHC allows buyers to choose assistance equal to 3%, 4%, or 5% of their loan amount. This money can be applied upfront, reducing the immediate cash needed to close.
TSAHC’s Homes for Texas Heroes Program provides added benefits for teachers, police officers, firefighters, EMS workers, and veterans. TDHCA also offers Targeted Area benefits, which waive the first-time buyer requirement in certain communities and may allow for higher income or purchase price limits.
Both TDHCA and TSAHC offer Mortgage Credit Certificates (MCCs). These allow first-time buyers to claim a portion of their annual mortgage interest (up to $2,000/year) as a federal tax credit — which directly reduces the amount of tax you owe, not just your taxable income. MCCs can be paired with many loan products, including FHA, VA, USDA, and conventional loans.
To qualify for most TDHCA and TSAHC programs, buyers must complete a homebuyer education course. This can usually be done online or in person, and it covers budgeting, mortgage basics, and responsibilities of homeownership. The certificate is typically valid for one year and must be presented before closing.
While Texas doesn’t offer statewide transfer tax reductions like some states, there are still ways first-time buyers can save money at closing and beyond. From property tax exemptions to local credits, these programs can help reduce the long-term cost of owning a home.
Texas is unique in that it does not impose a state transfer tax on real estate sales. This is a major savings compared to states that charge 0.25–1% of the home’s price at closing. Buyers in Texas can still expect standard closing costs, but they won’t face an extra transfer tax at the state level.
Although Texas has no statewide transfer tax, local governments may charge fees tied to title, recording, or document preparation. These amounts vary by county, so it’s smart to confirm costs with your title company early in the process. Some local housing departments (like in Houston or Dallas) may also offer limited credits toward closing costs for qualifying first-time buyers.
Texas homeowners can apply for the Homestead Exemption, which reduces the taxable value of your primary residence. First-time buyers can typically file for this exemption starting January 1 of the year after they purchase. Additional exemptions are available for seniors, veterans, and disabled homeowners, which can further reduce annual property tax bills.
Closing costs in Texas usually run between 2% and 5% of the purchase price. On a $250,000 home, that means $5,000–$12,500 in total costs. Without a state transfer tax, Texas buyers save compared to many other states, but should still budget for:
In addition to statewide programs, many Texas cities and counties offer their own homebuyer assistance. These programs often provide grants for down payments or closing costs and can sometimes be layered with TDHCA or TSAHC benefits. Employers in Texas may also offer housing support as part of their benefits package.
Some of the most impactful local programs in Texas include:
Each program has its own eligibility criteria, typically tied to income limits, purchase price caps, and homebuyer education requirements.
Some large employers, especially hospitals, universities, and city governments, offer Employer-Assisted Housing (EAH) benefits. These may come in the form of down payment assistance, forgivable loans, or homeownership grants. TSAHC’s Employer-Assisted Housing Program can also connect workers with local employers who contribute toward their purchase, often layered with TSAHC’s own DPA.
The good news: local assistance can often be stacked with TDHCA and TSAHC programs. For example, a Houston buyer might use TDHCA’s My First Texas Home loan with TSAHC’s MCC, plus the City of Houston’s $50,000 grant. The result is a dramatically reduced cash-to-close and lower long-term costs.
Texas follows the common federal definition of a first-time homebuyer, but some exceptions apply. Knowing whether you qualify matters because it determines your eligibility for programs like TDHCA, TSAHC, and federal loan options.
In Texas, a first-time homebuyer is generally defined as someone who has not owned a home in the past three years. Exceptions include:
Both TDHCA and TSAHC set income limits and maximum home purchase prices that vary by county, household size, and program type. For example, income limits are higher in urban areas like Houston and Dallas than in smaller counties. Buyers should check current TDHCA and TSAHC charts or confirm with their lender to see if they qualify.
To qualify for assistance, the home must be your primary residence — not a rental or vacation property. Most programs also require you to move in within 60 days of closing and remain in the home for a set number of years if you’ve received forgivable assistance.
To apply for Texas programs, first-time buyers typically need:
The fastest way to confirm eligibility is to work with a TDHCA- or TSAHC-approved lender. They can review your income, credit, and location to confirm which programs you qualify for and how much assistance you may receive.
Every first-time buyer’s timeline looks different. Some need months (or even years) to save, while others are nearly ready to make an offer. Here’s a plan tailored to both paths — so whether you’re pacing yourself or sprinting to the finish line, you know your next step.
Even though Texas doesn’t have a state FHSA, setting up a dedicated savings account keeps your down payment and closing cost funds organized. Automate contributions and set milestones so you can see your progress.
Enroll in a TDHCA- or TSAHC-approved homebuyer education course. Not only is it required for most assistance programs, but it also prepares you for budgeting, loan terms, and the closing process.
Research TDHCA, TSAHC, and city-level programs (like Houston, Dallas, Austin, or San Antonio). If your employer offers housing benefits, ask if they can be combined with state or local support.
Work with a TDHCA- or TSAHC-approved lender to get pre-approved. This confirms how much you can afford and which programs you qualify for.
Apply for down payment assistance, MCCs, or local grants early — some programs are first-come, first-served and funding can run out.
When you’re ready to make an offer, make sure your contract reflects any assistance or incentives you’re using. Work with your lender and title company to confirm exact closing costs and ensure all program rules are met.
In Texas, a first-time buyer is typically someone who hasn’t owned a home in the past three years. You’ll also need to meet income and purchase price limits set by TDHCA or TSAHC, complete homebuyer education, and plan to live in the home as your primary residence.
You may be disqualified if you’ve owned a home in the last three years, unless you’re buying in a federally designated Targeted Area or qualify as an eligible veteran. You can also lose eligibility if your household income or the home’s purchase price exceeds program limits, or if you plan to use the property as an investment or vacation home rather than as your primary residence.
The down payment requirement depends on the loan type. FHA loans require as little as 3.5% down, while conventional loans may allow first-time buyers to put down just 3%. VA and USDA loans go further, offering 0% down if you qualify. Many Texas buyers combine these loans with down payment assistance from TDHCA or TSAHC, which can cover a portion — and sometimes all — of the upfront costs.
Yes. TDHCA and TSAHC both offer grants or forgivable loans that cover 3–5% of your loan amount. In addition, many Texas cities — including Houston, Dallas, Austin, and San Antonio — provide local grants that can add thousands more in assistance.
Income limits vary by county, household size, and program. For example, the limit may be higher in urban counties (like Harris or Dallas) than in rural ones. TDHCA and TSAHC publish updated income and purchase price charts each year, and approved lenders can confirm which limits apply to you.
Yes. All Texas homeowners can apply for the Homestead Exemption, which lowers the taxable value of your home and reduces your annual property tax bill. Additional exemptions exist for seniors, veterans, and people with disabilities.
Buying your first home in Texas often comes down to how well you prepare financially. Foyer helps you stay organized with a dedicated savings account built for homeownership. You can set clear milestones, automate contributions, and track your progress toward your down payment and closing costs — so you know exactly where you stand and what’s left to do.
Foyer is more than just a savings tool. We break down programs like TDHCA and TSAHC in plain language, so you understand your options without the jargon. We also connect you with trusted local lenders and agents who know how to layer state, local, and federal assistance programs — giving you a real advantage as a first-time buyer in Texas.
Foyer provides education and savings support, but we’re not a tax, legal, or lending advisor. Banking services are provided through our FDIC-insured partner institution. For questions about designating savings accounts, filing for assistance, or claiming credits like MCCs, we always recommend speaking with your tax professional or lender.
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Foyer is a fintech company, not an FDIC-insured bank. Banking services provided by Pacific West Bank, Member FDIC. Deposit insurance covers the failure of an insured bank.
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