First-Time Home Buyer Programs in Texas (2026 Guide)

Published May 23, 2026 · Updated June 2, 2026 · ReKeyGenAI Editorial Team

Texas has multiple programs to help first-time buyers afford a home in 2026 — including TDHCA's My First Texas Home with up to 5% down payment assistance, the Texas MCC tax credit, city-level grants, and federal FHA/VA/USDA loans.

Who Qualifies as a "First-Time Home Buyer" in Texas?

Most Texas programs define "first-time home buyer" as someone who has not owned a principal residence in the past 3 years. This means even if you owned a home years ago, you may qualify if you've been renting since. Divorced individuals who didn't own the home during marriage may also qualify as first-time buyers.

TDHCA My First Texas Home Program

The Texas Department of Housing and Community Affairs (TDHCA) My First Texas Home program is the state's flagship first-time buyer assistance program. Key features for 2026:

• Down payment assistance: Up to 5% of the loan amount provided as a 0% interest, deferred forgivable loan (forgiven after 3 years if you stay in the home)
• Eligible loan types: FHA, VA, USDA, and Conventional (Fannie Mae HFA Preferred)
• Income limits: Vary by county and family size — generally $74,500–$99,000 for Dallas-Fort Worth area buyers
• Purchase price limits: Up to $404,400 in most Texas counties (2026 FHA limits)
• Credit score minimum: 620 for most loan types

The assistance covers down payment AND closing costs. A buyer purchasing a $300,000 home could receive up to $15,000 in assistance — potentially eliminating the need for any out-of-pocket funds at closing.

Texas Mortgage Credit Certificate (MCC) Program

The Texas MCC is a federal income tax credit (not a deduction) that reduces your annual federal taxes for the life of the mortgage. In 2026:

• Credit equals 20–40% of annual mortgage interest paid
• Maximum credit: $2,000/year
• Available combined with TDHCA down payment assistance
• Remains in effect as long as you live in the home and carry the mortgage

Example: If you pay $15,000 in mortgage interest in year one and have a 30% MCC, you receive a $2,000 federal tax credit — reducing your tax bill dollar-for-dollar. Over a 30-year mortgage, this can equal $60,000 in cumulative tax savings.

TDHCA My Choice Texas Home Program

For buyers who don't qualify as first-time buyers (owned a home in the last 3 years), TDHCA's My Choice Texas Home program offers the same down payment assistance structure but without the first-time buyer requirement. Income and purchase price limits are the same as My First Texas Home.

City-Level DFW First-Time Buyer Programs

Many DFW cities offer additional local assistance programs stacked on top of TDHCA funding:

• City of Dallas: DHA Housing Down Payment Assistance Program — up to $20,000 for eligible buyers purchasing in Dallas city limits
• City of Fort Worth: Home Sweet Fort Worth Program — up to $20,000 for homes in eligible Fort Worth neighborhoods
• City of Arlington: HOME Investment Partnerships Program — provides gap financing for eligible buyers
• Collin County: HOME Grant Program — down payment assistance for Collin County purchases

These local programs are subject to funding availability — your REALTOR® and loan officer can help you identify and apply for programs before the funds run out each year.

Federal First-Time Buyer Loan Programs

• FHA Loans: 3.5% minimum down payment with a 580+ credit score (10% down with 500–579). Low rates, but require mortgage insurance premiums. Most common first-time buyer loan in Texas.
• VA Loans: 0% down payment for eligible veterans and active-duty military. No mortgage insurance. No purchase price cap (with full entitlement). The best loan program available for those who qualify.
• USDA Rural Development Loans: 0% down for homes in eligible rural areas. Many DFW exurbs including parts of Kaufman, Parker, and Johnson counties qualify. Income limits apply.
• Conventional 97: Only 3% down for first-time buyers with a 620+ credit score. No upfront mortgage insurance like FHA. Lower monthly costs for buyers with good credit.

How to Stack Multiple Programs

The most powerful strategy is combining programs. Example for a DFW first-time buyer:

1. FHA loan (3.5% down required)
2. TDHCA My First Texas Home covers the 3.5% down + closing costs
3. MCC credit reduces annual tax bill by up to $2,000/year
4. City of Dallas additional grant fills any remaining gap

Result: A qualified buyer may purchase a $300,000 home with little to no money out of pocket and immediate annual tax savings.

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