Texas Down Payment Assistance Programs 2026: How DFW First-Time Buyers Are Using TSAHC and TDHCA Grants to Close

By Steven J. Thomas | Refind Realty DFW | Envision Home Lenders

One of the biggest reasons first-time buyers in DFW stay on the sidelines isn't the home prices — it's the down payment. Coming up with $15,000 to $30,000 in cash before you even start packing feels impossible for a lot of households. What most people don't realize is that there are state-funded programs specifically designed to hand you that money. Not a loan. A grant. And if you qualify, you can stack it with other benefits to walk into a home in DeSoto, Cedar Hill, or Midlothian with a fraction of what you thought you needed.

Direct Answer

The Two Programs Every DFW Buyer Should Know

TSAHC — Texas State Affordable Housing Corporation

TSAHC runs the Homes for Texas Heroes and Home Sweet Texas programs. Texas Heroes is for people who work in public service — teachers, firefighters, police officers, corrections officers, veterans, nurses, and emergency medical services. Home Sweet Texas is open to anyone who meets the income limits, not just public servants.

Both programs offer the same core benefit: a grant of up to 5% of the total loan amount that never has to be paid back. On a $350,000 home with a 3.5% FHA loan, that's up to $17,500 going toward your down payment and closing costs at no cost to you. There's also a mortgage credit certificate option that reduces your federal income tax bill every year you stay in the home.

For the Dallas-Collin metropolitan area, the 2025-2026 income limits run from approximately $85,840 for targeted areas up to $103,100 or higher depending on household size and program tier. Purchase price limits for the same area are currently set up to $661,949 — which covers most of the resale inventory in southwest DFW and even a good portion of new construction in markets like Midlothian and Red Oak. Visit tsahc.org for the current limit tables — they update annually.

TDHCA — Texas Department of Housing and Community Affairs

The TDHCA My First Texas Home program works differently from TSAHC. Instead of a standalone grant, it pairs a below-market-rate first mortgage with a second loan of up to 5% of the loan amount at zero percent interest. That second loan is deferred — you don't make payments on it — and it gets forgiven on a schedule tied to how long you stay in the home.

The income limits are similar to TSAHC, generally in the $97,000 to $111,550 range for DFW depending on household size. The program is available to first-time buyers and, in some targeted areas, repeat buyers who haven't owned in the past three years. The below-market interest rate on the first mortgage can be a bigger advantage than the DPA itself depending on where rates are sitting. As of May 21, 2026, the Freddie Mac 30-year fixed averaged 6.51%, according to the Primary Mortgage Market Survey. Shaving half a point off that rate compounds into meaningful savings over 30 years.

Southwest DFW Neighborhoods Where These Programs Work

DeSoto, TX

DeSoto sits squarely in the income and price range where these programs do the most work. The median sale price in DeSoto was around $349,500 in early 2026, according to Redfin data — well inside the TSAHC purchase price limit. A buyer earning $85,000 a year who qualifies for a 5% TSAHC grant on a $320,000 purchase would receive $16,000 toward their down payment and closing costs. That changes the math entirely. You can search available DeSoto homes and check affordability through the Lone Star Living app.

Cedar Hill, TX

Cedar Hill has seen inventory increase in 2026, which means buyers have more negotiating room than they did two years ago. For a first-time buyer using TSAHC or TDHCA assistance, that negotiating room matters. You may be able to ask the seller for additional closing cost credits on top of your DPA grant, effectively coming in with very little out of pocket. Cedar Hill homes generally run in the $280,000 to $380,000 range, which fits neatly within the program purchase price limits.

Glenn Heights, Midlothian, and Red Oak

The Ellis and Johnson County portions of these markets are technically in different HMFAs from Dallas and Collin Counties, which means their income limits and purchase price limits can vary. In some cases, targeted areas in these counties have lower income thresholds but allow buyers who've owned before to participate. If you're looking at new construction in Red Oak or Midlothian, check the TSAHC limits for those counties specifically — they're different from the Dallas-Collin table. Our team can walk you through this. Book a free consultation here.

Local Market Context: Spring 2026

• 30-year fixed mortgage rate: 6.51% as of May 21, 2026 (Freddie Mac PMMS)
• DeSoto median sale price: $349,500, down approximately 6.7% year-over-year (Orchard, April 2026)
• DFW median days on market: approximately 82 days as of March 2026
• Active listings across DFW are up substantially from 2022-2023 levels, giving buyers more choices
• Approximately 30% of active DFW listings carried price reductions as of March 2026

This market context matters for DPA buyers specifically. More inventory and longer days on market mean sellers are often willing to contribute additional closing costs on top of your grant money. In 2021 and 2022, that wasn't possible. Sellers had all the leverage. Today, the math works in your favor — especially if you come in pre-approved with a DPA program already in place. Get pre-approved at stevenjthomas.com/get-started.

Breaking Down the Costs: What DPA Actually Covers

Down payment assistance doesn't just cover the down payment — it can cover a portion of your closing costs too. That's important because closing costs in Texas typically run 2% to 4% of the purchase price. On a $340,000 home, that's $6,800 to $13,600 in fees before you get the keys.

Here's a realistic cost breakdown for a $320,000 home in DeSoto using a TSAHC grant:

• Purchase price: $320,000
• FHA down payment (3.5%): $11,200
• Estimated closing costs: $8,000 to $10,000
• Total needed without assistance: $19,200 to $21,200
• TSAHC 5% grant: $16,000 (applied to down payment and closing costs)
• Remaining out of pocket: approximately $3,200 to $5,200

That's a significant shift. You're not coming in with $20,000 — you're coming in with $5,000 or less. The grant does the heavy lifting.

There are trade-offs. FHA loans require mortgage insurance premiums (MIP), which adds to your monthly payment. Some TSAHC-paired mortgages carry slightly higher interest rates than non-assisted loans. Running the numbers with a dual-licensed broker and loan officer — someone who can compare both sides of the transaction — gives you a cleaner picture of the total cost over time. That's exactly what I do. One person, both sides, zero confusion.

New Construction and DPA Programs: What to Know

DPA programs can be used on new construction, but there are a few things to watch for. Builders in DFW actively offer their own incentives — rate buydowns, closing cost credits, lot upgrades — and some of these can be stacked with state assistance programs. Others can't. The key is having your financing locked down before you walk into a builder's sales office.

Builders like Lennar, D.R. Horton, and Bloomfield have preferred lender relationships that come with incentives tied to using their in-house financing. If you're using a TSAHC or TDHCA-approved lender, you need to know upfront whether the builder's closing cost credits still apply. Some do. Some don't. Coming in prepared — with a pre-approval from an approved lender and a clear understanding of what the builder is offering — puts you in the best negotiating position.

If you use our team as your buyer's agent on a new construction purchase, you may be eligible for up to $10,000 back at closing through our New Construction Rebate Program. That's on top of any state assistance you qualify for. Explore new construction options in DFW at stevenjthomas.com/dallas-ft-worth-tx-new-construction-homes.

How to Qualify: The Real Requirements

The income limits get most of the attention, but there are other requirements worth knowing.

For TSAHC's Home Sweet Texas program, you need a minimum credit score of 620 for FHA loans and typically 640 or higher for conventional. The home has to be your primary residence — no investment properties, no vacation homes. There's no requirement that you be a first-time buyer for all TSAHC programs, but some income tiers and targeted area designations do impose that condition.

For TDHCA My First Texas Home, you do generally need to be a first-time buyer, defined as not having owned a home in the past three years. There are exceptions for targeted areas and for veterans. Credit score minimums are similar to TSAHC. Both programs require completion of a HUD-approved homebuyer education course, which is available online for free and typically takes four to eight hours.

The application process runs through a TSAHC- or TDHCA-approved lender. As a loan officer at Envision Home Lenders, I'm set up to run both programs. The pre-approval process isn't any more complicated than a standard mortgage application — the programs layer on top of the underwriting, they don't replace it.

Conclusion

The down payment problem is real. But it's not unsolvable. Texas has put serious money into making homeownership accessible for buyers in the DFW area, and the 2026 market — with more inventory, more negotiating room, and sellers willing to offer concessions — is one of the better environments in years to put these programs to work.

If you earn under roughly $100,000 and are looking at homes in the $200,000 to $500,000 range, there's a real chance you qualify for grant money that covers most or all of your down payment. The only way to know for sure is to run the numbers. Get pre-approved and see exactly what you qualify for at stevenjthomas.com/get-started. Download the Lone Star Living app to browse available homes and get real-time market alerts at lonestarliving.hsidx.com/@sthomas. Or if you'd rather just talk through your situation, book a free appointment here.

You're Always Home with Steven J. Thomas.

Key Takeaways

• TSAHC and TDHCA both offer up to 5% of the loan amount in down payment assistance — on a $320,000 purchase, that's up to $16,000 in grant money.
• Income limits for the Dallas-Collin metropolitan area run up to approximately $103,100 for smaller households, with purchase price limits up to $661,949.
• These programs work on FHA, conventional, and VA loans, and can often be paired with seller concessions in today's DFW buyer's market.
• New construction in DFW is eligible — but you need to coordinate DPA with builder incentives before signing a contract.
• TSAHC requires no repayment on the grant; TDHCA's second lien is deferred and forgiven over time. Both require a HUD-approved homebuyer education course.

FAQ: Texas Down Payment Assistance Programs 2026

Can I use TSAHC or TDHCA on a new construction home in DFW?

Yes. Both programs work on new construction purchases as long as the home will be your primary residence and the loan goes through an approved lender. Coordinate with your agent and lender before signing a builder contract to confirm the program stacks properly with any builder incentives.

How much money can I actually receive from a DPA program in Texas?

Both TSAHC and TDHCA offer up to 5% of the loan amount. On a $300,000 FHA loan, that's $15,000. On a $380,000 loan, that's $19,000. The exact amount depends on the program tier and your loan type. TSAHC grants are not repaid. TDHCA provides a deferred second lien at 0% interest that is forgiven over time.

What if I make too much money to qualify?

Income limits for the Dallas-Collin HMFA run up to roughly $103,000 to $144,000 depending on household size and program tier. If you're over the limit, conventional loan programs with lower down payment requirements — 3% down with Fannie Mae HomeReady or Freddie Mac Home Possible — may still reduce your out-of-pocket costs significantly.

Are homes in DeSoto, Cedar Hill, or Midlothian within the TSAHC purchase price limits?

For the Dallas-Collin HMFA, the purchase price limit is currently $661,949. Most resale homes in DeSoto, Cedar Hill, and Glenn Heights fall well within that limit. Ellis and Johnson county homes (Midlothian, Red Oak, Waxahachie) are in a separate HMFA with their own limits — verify those directly with an approved lender.

How long does it take to close using a DPA program?

Closing timelines using TSAHC or TDHCA are typically the same as a standard purchase — 30 to 45 days from executed contract. The DPA process runs parallel to the mortgage, not after it. As long as you're pre-approved before you go under contract, you shouldn't experience any unusual delays.

Where can I find DFW homes that fit within the TSAHC purchase price limit?

Download the Lone Star Living app at lonestarliving.hsidx.com/@sthomas to search current DFW listings with real-time MLS data. You can filter by price, city, and school district to find homes that work with your DPA eligibility.

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Equal Housing Opportunity. Steven J. Thomas is a licensed Texas real estate broker with Refind Realty DFW (TREC) and loan officer at Envision Home Lenders, NMLS #689220. This content is based on current market conditions as of May 2026 and is for informational purposes only. Program terms, income limits, and purchase price limits are subject to change. Verify current requirements with a TSAHC- or TDHCA-approved lender before applying. Contact: 972-846-9170 | [email protected] | 128 S. Cockrell Hill Rd, DeSoto, TX 75115.