Houston Down Payment Assistance and First-Time Homebuyer Programs

Houston has an impressively affordable housing market, especially for a large city. Median home prices in the Bayou City are well below the national average, making it a viable option, even for first-time homebuyers.  

That being said, buying in an affordable city still comes with a fair amount of upfront costs. A down payment and closing costs on a home in Houston can easily add up to tens of thousands of dollars.

And now for the good news: there is down payment assistance (DPA) available in Houston to help homebuyers get into the city’s housing economy.

In fact, Houston down payment assistance programs offer up to $30,000 in fully forgivable loans for first-time homebuyers purchasing within the city limits. There are also a number of national and statewide DPA programs you could qualify for as a Houston homebuyer. 

If you take advantage of these programs, you could potentially buy your first home in Houston without spending months or years 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 Houston homebuyers

Most statewide and local down payment assistance (DPA) programs in Houston are relatively simple. The majority of programs come in the form of a loan, and in almost all cases, the loaned down payment funds are ‘forgivable’, meaning you do not 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. 

Houston first-time homebuyer loans

As we already mentioned, almost all Houston first-time homebuyer loans are forgivable, which means the loan is attached to the house and does not need to be repaid if you meet the program’s forgiveness criteria.

In most cases, the forgiveness criteria is straightforward: to have the loan forgiven, you must make your mortgage payments on time and live in the home for a specified number of years before you refinance, sell, or rent it out.

Typically, a down payment assistance loan is eligible for forgiveness between three and ten years from the purchase date. However, there are a few outlying programs in which your loan is not forgiven until you’ve fully paid off your mortgage.

There are loan programs (but not many) that do not offer forgiveness. However, even though you have to pay back the money, these loans are designed to make it financially feasible to do so without compromising your ability to meet your regular mortgage payments.

Learn more: Considering buying in greater Harris County? Read our full list of Harris County down payment assistance programs.

Down payment assistance programs in Houston

Houston has local down payment assistance programs for people buying homes within the city limits, and there are also a number of state and national programs available to first-time homebuyers in Houston.

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.

Houston Homebuyer Assistance Program

The Houston Homebuyer Assistance Program offers down payment assistance loans with a $50,000 maximum. These loans can be forgiven after five years, provided you don’t sell, refinance, or move out of the home within that time.

Assistance type: Forgivable loan

Sponsor: City of Houston

Assistance amount: $50,000 maximum 

Purchase price limit: None 

Minimum borrower contribution: $350

Eligibility requirements: 

• First-time homebuyer 
• Purchasing within Houston city limits
• Income limit: 80% of area median income

Statewide down payment assistance programs available in Houston

These Texas-based down payment assistance programs are available to eligible first-time homebuyers purchasing in Houston and beyond. 

TSAHC Home Sweet Texas HFA Loan

The Home Sweet Texas HFA Loan is a down payment assistance loan available everywhere in Texas that can be fully forgiven if you don’t sell or refinance the home for a period of three years after purchase. 

This program can also be combined with the Texas Mortgage Credit Certificate (MCC) tax credit which we describe in greater detail below.

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

*For all DPA programs, income limits are regularly reviewed and updated. Be sure to check the most current limits before assuming you don’t qualify. 

TSAHC Homes for Texas Heroes HFA Loan

The Homes for Texas Heroes HFA Loan is a forgivable down payment assistance loan program available to Texas residents working in certain helping professions. The loan can be combined with the Mortgage Credit Certificate (MCC) tax credit, and it can be forgiven if you do not sell or refinance the home within three years.

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 provides down payment assistance in the form of a community second lien which is forgiven after three years, provided you do not sell or refinance the home in that time. 

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

*For all DPA programs, purchase price and income limits are regularly reviewed and updated. Be sure to check the most current limits before assuming you don’t qualify. 

TDHCA My First Texas Home Down Payment Assistance

My First Texas Home Forgivable Down Payment Assistance is a down payment assistance program that offers funding to first-time homebuyers in the form of a second lien that can be structured either as a three-year forgivable lien, or as a 30-year deferred repayment lien.

Assistance type: Forgivable loan

Sponsor: Texas Department of Housing and Community Affairs Homebuyer Program

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 based on location of home 

TDHCA My Choice Texas Home Down Payment Assistance

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

Assistance type: Forgivable loan

Sponsor: Texas Department of Housing and Community Affairs Homebuyer Program

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 offers discounted mortgage loans for veterans and active duty service members to purchase a home in Texas. The funding can be structured as a 15, 20, 25, or 30 year loan. It requires minimal or no down payment and offers interest rates which are typically lower than the market rate. 

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 Houston

Whether you’re purchasing a home in Houston, or elsewhere in the US, you might be eligible for down payment assistance sponsored by the National Homebuyer Fund. We’ve included details about the program below. 

NHF Down Payment Assistance Program

The NHF Down Payment Assistance Program provides a down payment assistance loan which can be forgiven if the home is your primary residence for a certain number of years. The number of years required to forgive the loan is determined at closing.

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 median income in area where 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.  

Houston down payment assistance program FAQ

As you consider your down payment assistance options, there is a lot of information to take in.

Here’s a short lightning round of answers to the most common questions we get from first-time homebuyers in Houston who want to take advantage of down payment assistance. 

Does Houston have a first-time buyers program?

Yes, there are several first-time buyer programs for Houston residents. The Houston Homebuyer Assistance Program is only available to those buying within city limits. There are also national and statewide programs that offer significant assistance money to homebuyers, including those living in Houston. 

What first-time homebuyer programs are available in the city of Houston?

These are the first-time homebuyer programs available to residents of Houston:

• Houston Homebuyer Assistance 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

What types of Houston first-time homebuyer assistance are there?

Houston first-time homebuyer assistance programs are most commonly down payment assistance loans. A majority of these loans don’t need to be repaid if you meet certain criteria. Commonly, forgiveness criteria involves owning and living in the home for a certain number of years and making your mortgage payments on time.

How does down payment assistance work in Texas?

At a high level, down payment assistance (DPA) in Texas works the same as in other states. To get assistance, you must use a lender who works with the specific DPA program you are interested in. Your down payment assistance application is submitted at the same time as your loan application, through your lender. 

After you are approved for DPA, the funds are issued at the time of closing, either to your lender or directly to you. You use the funds to pay all or part of your down payment. In most cases you can also use the money to pay closing costs. 

Stairs Financial makes the process of finding down payment assistance in Texas simple. 

Stairs helps you connect with a trusted lender who works with down payment assistance programs in the state. With Stairs, you can easily compare all of the programs you qualify for, side-by-side and apples to apples, and choose the most beneficial program for you.

What is the income limit for first-time homebuyer assistance in Houston?

The first-time homebuyer income limit for Houston residents using down payment assistance is typically 80% of the area median income. 80% of the area median income for Houston in 2023 is $52,200 for a single person and $74,500 for a household of four. 

Most programs use the median income for the county where the home is purchased, but some programs look at the median income for smaller areas within the county. 

Do keep in mind that area median income is reviewed and revised frequently. Always check the most current limits before assuming you don’t qualify for assistance.

What is the mortgage credit certificate and does it apply to Houston first-time homebuyers?

The Mortgage Credit Certificate (MCC) is a federal income tax credit. With this credit, 20% of the total amount you paid in mortgage interest over the course of the year gets refunded to you when you file your taxes. Houston homebuyers are eligible for the MCC because it is available to homeowners nationally.

Since the MCC refunds a portion of your mortgage interest when you file your taxes, it effectively reduces your mortgage interest rate.

What are the minimum requirements for Houston down payment assistance?

Each down payment assistance program has its own criteria, but these are the typical requirements for most programs available to Houston home buyers:

• A minimum contribution from the buyer, usually $1,000 or less.
• A minimum credit score between 620 and 640.
• Purchasing your first home or have not owned a home within a certain period of time, most often three years.

Find out if you qualify for a Houston down payment assistance program 

Stairs Financial simplifies down payment assistance (DPA) by making it easy for you to find out exactly which programs you qualify for and which lenders in your area work with those programs. 

Stairs connects you with trusted lenders who work with DPA and then shows you the loan and down payment assistance programs you qualify for, all in one place. You can easily compare your options side-by-side and take the next step toward home ownership. 

Learn more about your down payment assistance options.