El Paso Down Payment Assistance and First-Time Homebuyer Programs

El Paso is quickly growing in popularity as Texans, along with people from all over the US, consider buying homes in the area.

As the sixth-largest city in Texas, El Paso has a strong employment market and impressively affordable housing. But despite the city’s relative affordability, the upfront costs of buying a home in El Paso are significant. Between a down payment and closing costs, upfront expenses for first-time homebuyers can easily top $10,000.

Fortunately, Texas has a strong list of down payment assistance (DPA) programs. This includes two programs available only in El Paso, as well as several programs for homebuyers anywhere in the state.

These programs are a great resource if you plan to buy a house in El Paso. Getting DPA could be the difference between purchasing a home now and beginning to build equity, versus spending years paying rent and saving up for a down payment.

Disclaimer: This article is for informational purposes only and should not be considered as legal or financial advice. Please consult an attorney, mortgage lender, or CPA for guidance on your specific situation.

Types of down payment assistance for El Paso homebuyers

Most statewide and local down payment assistance (DPA) programs available to buyers in El Paso are relatively straightforward. The majority of programs come in the form of a loan, and in almost all cases, these loaned down payment funds are fully forgivable, meaning you don’t need to repay the money as long as you meet certain requirements. 

Some of these DPA programs are called “loans” and some are called “liens”, but regardless of the name, they are all essentially forgivable loans. 

We’ll give you the details about each program in the second half of this article. But first, we’ll briefly go over what you can expect when you apply for a first-time homebuyer loan to help with your down payment in El Paso. 

El Paso first-time homebuyer loans: What to expect when you apply

First-time homebuyer loans are specifically designed to help people, especially those with low or moderate incomes, get over the hurdle of purchasing their first house. 

Meeting the program requirements

Each first-time homebuyer program available in El Paso sets its own eligibility requirements, such as an income limit, minimum credit score, and maximum purchase price.

Most, but not all, programs also have a first-time homebuyer requirement. 

That being said, almost all programs with this requirement define a first-time homebuyer as anyone who doesn’t currently own a home and hasn’t owned one in the past three years. Also, this requirement is sometimes waived for buyers who have been displaced by divorce or another life event. 

Qualifying for loan forgiveness

If you qualify for one of these programs, there are a few requirements you’ll have to meet to have your assistance fully forgiven. In most cases, this entails consistently making your monthly mortgage payments on time and living in the house for a certain number of years before selling, renting it out, or refinancing. 

Usually, the forgiveness period is between three and ten years, although some programs have longer forgiveness periods. There are also a few outlier programs that do require you to repay your loan. But in this case, the loans are set up so you can pay the money back without stressing your finances.

Applying for assistance

To apply for a first-time homebuyer loan, you’ll need to work with a mortgage lender approved by your specific assistance program. None of the down payment assistance programs available in El Paso accept applications directly from homebuyers. 

If you need help making sense of your options and finding an approved mortgage lender, Stairs Financial can help. 

Stairs Financial streamlines your access to down payment assistance, making it easy for you to connect with a trusted lender and compare the loan and assistance programs you may qualify for, all in one place.

Learn more about your down payment assistance options.

Down payment assistance programs in El Paso

The City of El Paso administers an assistance program to help local homebuyers with their down payments. 

City of El Paso First-Time Homebuyer Program (FTHB Program)

The City of El Paso First-Time Homebuyer Program offers principal reduction assistance, as well as closing cost and down payment assistance, to first-time homebuyers in El Paso. 

Assistance type: Forgivable loan

Sponsor: El Paso Housing Finance Corporation

Assistance amount: 

• Principal reduction: Up to a maximum of either $25,000 or $45,000, depending on where in El Paso your home is located
• Down payment and closing cost assistance: Up to an additional $5,000 

Purchase price limit*: $184,000 

Minimum borrower contribution: $1,000

Eligibility requirements: 

• First-time homebuyer 
• Purchasing within El Paso city limits
• Income limit*: Between 60-80% of El Paso area median income (AMI)

*For all DPA programs, income and purchase price limits are regularly reviewed and updated. Be sure to check the most current limits before assuming you don’t qualify. You can do this by using our free down payment assistance finder. 

Statewide down payment assistance programs available in El Paso

These Texas-based down payment assistance programs are available to eligible first-time homebuyers purchasing throughout the state, including in El Paso. 

TSAHC Home Sweet Texas HFA Loan

The Home Sweet Texas HFA Loan helps with down payments and is available all over Texas. It is a fully forgivable loan with a three-year forgiveness period.

You can also use this program with the Texas Mortgage Credit Certificate (MCC) tax credit, which we explain in more detail later in this article.

Assistance type: Forgivable loan

Sponsor: Texas State Affordable Housing Corporation

Assistance amount: Up to 5% down payment, no fixed maximum

Purchase price limit: None

Minimum borrower contribution: None

Eligibility requirements: 

• Purchasing in Texas
• Credit (FICO) score of 620 or higher
• Income limit*: $71,280 to $97,840 depending on location of home

TSAHC Homes for Texas Heroes HFA Loan

The Homes for Texas Heroes HFA Loan offers down payment assistance to Texas veterans, as well as people currently working in certain helping professions. You don’t have to pay the loan back if you meet the forgiveness requirements for three years. 

You can also pair this loan with the Mortgage Credit Certificate (MCC) tax credit.

Assistance type: Forgivable loan

Sponsor: Texas State Affordable Housing Corporation

Assistance amount: Up to 5% down payment, no fixed maximum

Purchase price limit: none 

Minimum borrower contribution: None 

Eligibility requirements: 

• Purchasing in Texas
• A veteran or currently working as: a teacher, emergency medical professional, nurse, law enforcement officer, or active duty service member 
• Credit (FICO) score of 620 or higher
• Income limit: $126,140 to $163,520 depending on location of home

SETH 5 Star Texas Advantage Forgivable Lien

The 5 Star Texas Advantage Forgivable Lien is a community second lien to help you make a larger down payment. The lien is removed and you don’t have to pay the money back as long as you meet the forgiveness requirements over a period of three years.

Assistance type: Forgivable loan

Sponsor: Southeast Texas Housing Finance Corporation

Assistance amount: Up to 5% down payment, no fixed maximum 

Purchase price limit for FHA loans*:  $472,030 to $571,550 (depending on location)

Purchase price limit for all other loan types: $492,500 

Minimum borrower contribution: None 

Eligibility requirements: 

• Purchasing anywhere in Texas except: Travis County, El Paso, McKinney, and Grand Prairie
• Credit (FICO) score of 640 or higher 
• Income limit for USDA-backed loans: $56,880 to $170,800 depending on location 
• Income limit for all other loan types: $78,820 to $171,220 depending on location

My First Texas Home Down Payment Assistance

The My First Texas Home Down Payment Assistance program helps first-time homebuyers increase their down payment through a second lien. The assistance can be structured either as a three-year fully forgivable lien, or as a 30-year deferred repayment lien. 

Assistance type: Forgivable lien or deferred repayment lien

Sponsor: Texas Department of Housing and Community Affairs

Assistance amount: Up to 5% down payment, no fixed maximum

Purchase price limit: None 

Minimum borrower contribution: None 

Eligibility requirements: 

• First-time homebuyer purchasing in Texas
• Credit (FICO) score of 620 or higher 
• Income limit: $90,100 to $163,520, depending on location 

TDHCA My Choice Texas Home Down Payment Assistance 

The My Choice Texas Home Down Payment Assistance program has no first-time homebuyer requirement. Funds are delivered as a second lien which can be structured either as a three-year forgivable lien or as a 30-year deferred repayment lien.

Assistance type: Forgivable lien

Sponsor: Texas Department of Housing and Community Affairs

Assistance amount: Up to 5% down payment, no fixed maximum

Purchase price limit: $481,176 to $712,097 depending on location of home 

Minimum borrower contribution: None 

Eligibility requirements: 

• Purchasing in Texas
• Credit (FICO) score of 620 or higher
• Income limit: $90,100 to $163,520 depending on location of home 

Veterans Housing Assistance Program

The Veterans Housing Assistance Program gives veterans and active-duty service members discounted mortgage loans to buy a home in Texas. You can choose a loan that lasts 15, 20, 25, or 30 years. Usually, there is either no down payment requirement or a very small one, and the interest rates are often better than market rates.

Assistance type: Discounted mortgage loan

Sponsor: Veterans Land Board

Assistance amount: Up to $726,200 loan 

Minimum borrower contribution: None 

Eligibility requirements: 

• Purchasing in Texas 
• Veteran or active duty service member
• Income limit: none 

National down payment assistance programs and grants you can use in El Paso

Regardless of where you purchasing a home, be it in El Paso or anywhere else in the U.S., you could be eligible for down payment assistance sponsored by the National Homebuyer Fund. The program details are below. 

NHF Down Payment Assistance Program

The NHF Down Payment Assistance Program offers down payment assistance through a forgivable loan. You don’t have to repay the loan if you live in the house for a set number of years, which is determined when your home sale closes.

Assistance type: Forgivable loan

Sponsor: National Homebuyer Fund

Assistance amount: Up to 5% down payment, no fixed maximum

Purchase price limit: Flexible, based on buyer’s income

Minimum borrower contribution: None 

Eligibility requirements: 

• Credit (FICO) score of 600 or higher
• Income limit: 115% of the area median income (AMI) in the location where the home is purchased

In addition to the National Homebuyer Fund, you could potentially qualify for a lender-sponsored assistance program through one of the nation’s largest banks. These programs vary from lender to lender. Stairs Financial does not endorse any single lender-sponsored DPA program over the next.  

El Paso down payment assistance program FAQ

There’s a lot to think about when you consider all your down payment assistance options.

Here’s a quick round of answers to the most common questions from homebuyers looking for down payment assistance in El Paso to help you process all the information. 

What first-time homebuyer programs are available in El Paso?

These are the first-time homebuyer programs available in El Paso:

• City of El Paso First-Time Home Buyer Program
• Home Sweet Texas HFA Loan
• Homes for Texas Heroes HFA Loan
• 5 Star Texas Advantage Forgivable Lien
• My First Texas Home Down Payment Assistance Lien
• My Choice Texas Home Down Payment Assistance Lien
• Veterans Housing Assistance Program
• NHF Down Payment Assistance Program

How does down payment assistance work in Texas?

Generally, down payment assistance (DPA) works in Texas as it does in any other place throughout the country. To get assistance, you need to work with a lender who is approved by your specific DPA program. You apply for DPA through your lender at the same time you submit your mortgage application. 

Once approved, you get your assistance money when your home sale closes. The money usually goes directly to your lender, who applies it toward your down payment and/or closing costs. 

Stairs Financial makes getting down payment assistance in Texas easy.

Stairs streamlines your access to DPA, helping you connect with a trusted lender and compare the loan and assistance programs you may qualify for, all in one place.

How much is a down payment for a house in El Paso (on average)?

At the time of publication, the median housing price in El Paso is $212,017. According to the National Association of Realtors, the average down payment for first-time homebuyers nationwide is 6%. Using this number, the average down payment in El Paso is around $12,721.

But remember, this is just an average. Since most loan programs offer lower interest rates at the 5%, 10%, or 20% down payment mark, 6% might not always be your best option. 

For example, making a 5% down payment might be your best bet, even if you can afford 6%, because you can use the saved money for other expenses, such as closing costs, initial home improvements, or to further reduce your interest rate by purchasing mortgage points. 

Your lender can help you run the numbers for your specific situation.

What is the City of El Paso FTHB Program and is funding available right now?

The City of El Paso FTHB Program is a first-time homebuyer program that offers up to $45,000 in principal reduction assistance and up to an additional $5,000 in down payment and closing cost assistance to people purchasing homes in El Paso. It is funded on an annual basis and stays open until the money is exhausted each year. 

Use our free down payment assistance finder to get the most up-to-date information about this program.

What is the income limit for down payment assistance in El Paso?

Each program is different, but the typical income limits for El Paso down payment assistance programs are between 60 – 80% of the area median income (AMI). According to the most recent information, this ranges between $28,620 and $71,900, depending on the size of your household.

Keep in mind that down payment assistance programs regularly assess their income limits and make adjustments as necessary, so these numbers change over time. Always check the most current information before assuming you don’t qualify. You can check your current eligibility with our free down payment assistance finder.

What credit score is needed for first-time homebuyer programs in El Paso?

Each first-time homebuyer program sets its own credit score requirements. Most ask for a score of 620. However, some require a score of 640, while others accept scores as low as 580. There are a few programs that have no minimum credit score at all.

How do I find out if I’m eligible for first-time homebuyer assistance?

Stairs Financial simplifies down payment assistance (DPA) by showing you exactly which programs you qualify for and finding lenders in your area that work with those programs. 

Stairs streamlines your access to down payment assistance, making it easy for you to connect with a trusted lender and compare the loan and assistance programs you may qualify for, all in one place

Learn more about your down payment assistance options.