First-Time Buyer Programs in Texas: Complete Guide

Making Homeownership Accessible in Texas

Buying your first home is exciting, but the financial requirements can feel overwhelming. The good news? Texas offers numerous programs designed specifically to help first-time buyers overcome the barriers to homeownership.

This comprehensive guide covers all the assistance programs available to first-time buyers in Texas, with special focus on opportunities in the Dallas-Fort Worth area.

What Qualifies You as a First-Time Buyer?

Contrary to popular belief, "first-time buyer" doesn't always mean you've never owned a home:

Standard Definition

• Haven't owned a primary residence in the past 3 years
• This applies to most programs

Special Qualifications

Some programs also include:

• Single parents who only owned with former spouse
• Displaced homemakers
• Veterans (some programs)

Texas State Programs

Texas State Affordable Housing Corporation (TSAHC)

Homes for Texas Heroes Program

• Eligibility: Teachers, firefighters, EMS, police, corrections officers, veterans
• Benefits: Up to $15,000 in down payment assistance
• Rate: Competitive fixed rates
• Requirements: Must work in a qualifying profession

My First Texas Home Program

• Down payment assistance: Up to 5% of loan amount
• Grant option: Available in targeted areas (no repayment!)
• Income limits: Vary by county (typically up to 115% of area median)
• Credit score: Minimum 640
• Property limits: Cannot exceed program maximum ($726,200 in DFW)

Texas Department of Housing and Community Affairs (TDHCA)

My Choice Texas Home Program

• Down payment help: Up to 5% of purchase price
• Second lien: Deferred payment, 0% interest
• Forgiveness: May be forgiven after 5-year period
• Interest rates: Below-market rates on first mortgage

Federal Programs

FHA Loans

Benefits:

• Down payment: As low as 3.5%
• Credit score: Minimum 580 for 3.5% down; 500-579 requires 10% down
• Debt-to-income: Up to 50% may be acceptable
• Seller concessions: Up to 6% toward closing costs
• Gift funds: Allowed for down payment

Requirements:

• Must be primary residence
• Property must meet FHA standards
• Mortgage insurance required (can be refinanced out later)
• Loan limits: $498,257 for single-family in DFW (2025)

Best For:

• Buyers with limited savings
• Those with credit scores 580-680
• Buyers needing seller assistance with closing costs

VA Loans (Veterans Affairs)

Benefits:

• Down payment: $0 required
• No PMI: No monthly mortgage insurance
• Interest rates: Typically lower than conventional
• Closing costs: Seller can pay all closing costs
• Appraisal: VA ensures property meets standards

Eligibility:

• Veterans with qualifying service
• Active duty service members
• National Guard and Reserve members
• Surviving spouses (in some cases)

Funding Fee:

• 2.15% of loan amount (first-time use)
• 3.3% for subsequent use
• Waived for disabled veterans

Best For:

• Qualified veterans and military
• Buyers with no down payment savings
• Anyone who qualifies (often the best option available)

USDA Loans

Benefits:

• Down payment: $0 required
• Rates: Competitive fixed rates
• Terms: 30-year fixed mortgages
• Property types: Single-family homes in eligible rural areas

Eligibility:

• Income limits: Up to 115% of area median (varies by location)
• Property must be in USDA-eligible area
• Some outer DFW suburbs qualify (parts of Denton, Kaufman counties)

Best For:

• Buyers willing to live in suburban/rural areas
• Those with limited down payment funds
• Buyers who meet income requirements

Conventional 97 (Fannie Mae)

Benefits:

• Down payment: Just 3% required
• Credit score: Minimum 620
• PMI: Can be removed once you reach 20% equity
• Gift funds: Allowed from family members

Requirements:

• Primary residence only
• One borrower must be first-time buyer
• Complete homebuyer education course
• Income limits in some areas

Best For:

• Buyers with good credit (680+)
• Those who want conventional financing benefits
• Buyers with some down payment savings

Local DFW Programs

City of Dallas

Down Payment Assistance Program

• Assistance: Up to $25,000
• Form: Forgivable loan (0% interest)
• Forgiveness: 20% per year over 5 years
• Income limits: Up to 80% AMI ($70,400 for family of 4)
• Property requirements: Must be in Dallas city limits

House Dallas

• Assistance: Up to $40,000 for down payment and closing
• Target: Moderate-income buyers
• Requirements: Complete homebuyer education
• Restrictions: Must live in home for 5 years

City of Fort Worth

First-Time Homebuyer Program

• Assistance: Up to $30,000
• Form: Deferred loan, no interest
• Forgiveness: After 10 years of occupancy
• Eligibility: Income limits apply (up to 80% AMI)
• Areas: Throughout Fort Worth

Tarrant County

Housing Finance Corporation

• Down payment: Up to 5% assistance
• MCC: Mortgage Credit Certificate available
• Tax credit: Save up to $2,000/year on federal taxes
• Requirements: First-time buyer, income limits apply

Collin County

Collin County Housing Finance Corporation

• Down payment assistance: Available through approved lenders
• MCC Program: Tax credit certificate
• Benefit: Reduce federal income tax dollar-for-dollar
• Credit amount: Up to 20% of annual mortgage interest

Employer-Assisted Housing Programs

Many DFW employers offer housing assistance:

Common Benefits

• Down payment grants or loans
• Closing cost assistance
• Below-market rate mortgages
• Forgivable loans with employment commitment

Major DFW Employers with Programs

• Texas Health Resources
• Baylor Scott & White
• Dallas ISD
• Fort Worth ISD
• American Airlines
• Various municipal employers

Action: Check with your HR department about available benefits.

Non-Profit Organizations

Habitat for Humanity - Dallas/Fort Worth

• Opportunity: Build/purchase affordable homes
• Requirements: Income limits, sweat equity, credit counseling
• Benefit: Below-market pricing, 0% interest mortgage

NeighborWorks America

• Services: Homebuyer education and counseling
• Assistance: Down payment grants in some areas
• Support: Credit counseling and financial education

The Complete First-Time Buyer Strategy

Step 1: Assess Your Readiness (3-6 months before buying)

Financial Preparation:

• Check credit scores (aim for 640+ minimum, 680+ ideal)
• Reduce debt-to-income ratio to 43% or lower
• Save for down payment and closing costs
• Build emergency fund (3-6 months expenses)

Credit Improvement:

• Pay bills on time
• Reduce credit card balances below 30% of limits
• Don't open new credit accounts
• Dispute any errors on credit reports

Step 2: Complete Homebuyer Education (Required for most programs)

Benefits:

• Required for most assistance programs
• Learn home buying process
• Understand mortgage options
• Often available free or low-cost

Where to Take Classes:

• HUD-approved counseling agencies
• Non-profit housing organizations
• Online courses (some programs accept these)
• Many lenders offer classes

Step 3: Get Pre-Approved (Not just pre-qualified)

Why It Matters:

• Know your true budget
• Strengthen offer competitiveness
• Identify best loan programs for you
• Speed up closing process

What You'll Need:

• 2 years of tax returns
• 2 months of bank statements
• Pay stubs (last 30 days)
• Proof of employment
• Photo ID
• List of debts and assets

Step 4: Apply for Assistance Programs

Timeline:

• Apply early (some programs have limited funds)
• Work with lender familiar with programs
• Gather all required documentation
• Be patient (approval takes time)

Documentation Typically Required:

• Proof of income (tax returns, pay stubs)
• Bank statements
• Credit reports
• Employment verification
• First-time buyer affidavit
• Homebuyer education certificate

Step 5: House Hunting

Considerations:

• Stay within approved budget
• Consider total monthly costs (not just mortgage)
• Think about resale value
• Factor in commute and lifestyle
• Don't max out your approval amount

Step 6: Make an Offer

Using Assistance Programs:

• Clearly state program usage in offer
• Some sellers prefer conventional financing
• Be prepared to explain timeline
• Have backup financing if possible

Step 7: Home Inspection and Appraisal

Home Inspection:

• Always get professional inspection
• Don't waive this contingency
• Negotiate repairs or credits if needed
• Budget $400-600 for inspection

Appraisal:

• Required by lender
• Must meet or exceed purchase price
• May need to renegotiate if low
• Consider appraising during inspection period

Step 8: Final Approval and Closing

Final Steps:

• Submit any additional documentation
• Avoid major purchases or credit changes
• Do final walk-through
• Review closing documents carefully
• Bring required funds (certified check or wire)

Maximizing Your Benefits

Stack Multiple Programs

You can often combine programs:

• State assistance + local city program
• FHA loan + down payment assistance
• VA loan + MCC (Mortgage Credit Certificate)
• Employer program + state program

Example Scenario:
$300,000 home purchase

• FHA loan: 3.5% down = $10,500
• State assistance: $10,500 grant
• City program: $15,000 forgivable loan
• Employer: $5,000 grant
• Total out of pocket: $0 down payment + closing costs (~$7,500)

Mortgage Credit Certificates (MCC)

How It Works:

• Convert mortgage interest deduction to tax credit
• Receive up to $2,000/year in tax savings
• Available through county housing authorities
• One-time fee (usually ~$500)

Example:

• $300,000 loan at 7% interest = $21,000 first-year interest
• 20% MCC = $2,000 tax credit
• Remaining $19,000 can still be itemized deduction

Common Mistakes to Avoid

1. Not Shopping Around

• Get quotes from multiple lenders
• Compare total costs, not just interest rates
• Consider both banks and credit unions
• Ask about all available assistance programs

2. Maxing Out Your Budget

• Lenders approve more than you should spend
• Leave room for maintenance, repairs, furniture
• Consider future financial goals
• Don't become house-poor

3. Skipping Homebuyer Education

• Required for most assistance programs
• Valuable information even if not required
• Often free or low-cost
• Helps you avoid costly mistakes

4. Ignoring Total Monthly Costs

• Principal and interest payment
• Property taxes
• Homeowners insurance
• HOA fees (if applicable)
• Utilities (often higher than renting)
• Maintenance and repairs

5. Rushing the Process

• Take time to find the right home
• Don't skip inspection
• Read all documents carefully
• Ask questions about anything unclear

EnterActDFW First-Time Buyer Services

We specialize in helping first-time buyers navigate the complex process:

Our Services:

• Program identification: Match you with best assistance programs
• Lender connections: Work with lenders experienced in assistance programs
• Education support: Guide you through homebuyer education requirement
• Property search: Find homes that meet program requirements
• Negotiation expertise: Protect your interests throughout transaction
• Closing support: Coordinate with all parties for smooth closing

Free Consultation:
We offer complimentary first-time buyer consultations to:

• Assess your readiness to buy
• Identify programs you qualify for
• Create personalized home buying timeline
• Answer all your questions

Your Path to Homeownership

Don't let down payment requirements or credit concerns stop you from homeownership. With the right assistance programs and guidance, buying your first home in DFW is more achievable than you might think.

The key is starting early, getting educated, and working with professionals who understand first-time buyer programs. Every day you wait is another day paying rent instead of building equity.

Ready to take the first step toward homeownership? Contact EnterActDFW today for your free first-time buyer consultation and learn which programs can help make your dream of owning a home a reality.

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Information current as of October 2025. Program details, income limits, and loan amounts subject to change. Verify current program parameters with providers. This article is for informational purposes only and does not constitute financial or legal advice.