Travis County Down Payment Assistance and First-Time Homebuyer Programs

Like Austin, home prices in greater Travis County are on the high side compared to Texas as a whole. This means if you’re looking to buy, your upfront costs will be on the high side as well. 

Saving for a down payment is one of the biggest hurdles faced by first-time homebuyers, both in Travis County and throughout the country. 

Down payment assistance helps overcome this hurdle, and Travis County has several down payment assistance and first-time homebuyer programs to choose from. These offer up to $40,000 to help you buy a home. 

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 Travis County homebuyers

The most common type of down payment assistance in Travis County is a forgivable loan or lien. This might sound less appealing than, say, a grant, but as long as you intend to stay in your home and make your mortgage payments on time, it’s a great option for many first-time homebuyers. 

As the name suggests, forgivable loans and liens are just that — forgivable. A loan or lien is placed on your home during the forgiveness period, but you don’t have to pay the money back as long as you meet certain basic criteria. After the criteria are met, the loan or lien is lifted and you gain the additional equity in your home. 

Travis County first-time homebuyer loans

The down payment assistance loans available in Travis County are structured specifically to help make ownership attainable for first-time homebuyers. In many cases, this means the assistance is only available to people purchasing their first home, although not all programs have this requirement. 

As we mentioned earlier, most of these loans are also forgivable.

If your first-time homebuyer loan is forgivable, you won’t ever have to repay the money as long as you meet the forgiveness requirements. Most commonly, this involves staying in the home without refinancing, selling, or renting it out for a certain number of years, usually between three and ten.

You must also consistently make your mortgage payments on time.

There are a few first-time homebuyer loans that have longer forgiveness timeframes or that do not get forgiven until you’ve entirely paid off your mortgage, but these are far less common. 

Even less common are programs which offer non-forgivable loans. These loans must be completely repaid, but they are structured so that making the payments isn’t a financial challenge for first-time homebuyers.

Down payment assistance programs in Travis County

Travis County has down payment assistance available from multiple sources. The county sponsors a program, and there are several statewide and national programs available to residents in the area as well.

If you’re looking to use down payment assistance within Austin itself, the city also sponsors a program.

Having plentiful options is good, but it does give you a lot of information to digest at one time. On top of all this, there’s the task of finding a lender who works with your down payment assistance program. 

Stairs Financial simplifies this process.

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.

Austin’s Down Payment Assistance Program

Austin’s Down Payment Assistance Program gives DPA loans to first-time homebuyers purchasing within Austin city limits. The program has a high maximum payout, with loans up to $14,999 eligible for forgiveness after five years and loans up to $40,000 eligible for forgiveness after 10 years.

Assistance type: Forgivable loan

Sponsor: City of Austin

Assistance amount: $40,000 maximum, up to a 30% down payment 

Purchase price limit*: $614,054

Minimum borrower contribution: $1,000

Eligibility requirements: 

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

*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. 

Hill Country Home Down Payment Assistance Program

The Hill Country Home Down Payment Assistance Program offers DPA in the form of a forgivable loan to first-time homebuyers in Travis County, including Austin. The loan can be forgiven after 10-years if the home is not sold or refinanced during that time. 

Assistance type: Forgivable loan

Sponsor: Travis County Housing Finance Corporation

Assistance amount:  Up to 6% down payment, no fixed maximum 

Purchase price limit*: $364,452

Minimum borrower contribution: None

Eligibility requirements: 

• Purchasing in Travis County
• Credit (FICO) score of 640 or higher 
• Income limit: 140% of area median income

Statewide down payment assistance programs available in Travis County

These down payment assistance programs are available to eligible first-time homebuyers purchasing in Travis County and throughout the state of Texas. 

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

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

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 Travis County

If you’re looking to purchase a home in Travis County, you might also qualify 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.  

Travis County down payment assistance program FAQ

Here are answers to the most frequently asked questions about down payment assistance in Travis County.

What first-time homebuyer programs are available in Travis County?

These are the first-time homebuyer programs available in Travis County:

• Austin’s Down Payment Assistance Program
• Hill Country Home Down Payment Assistance (DPA) Program
• Home Sweet Texas HFA Loan
• Homes for Texas Heroes HFA Loan
• 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?

There’s no difference between how down payment assistance works in Texas and how it works in other states. You apply for assistance through a qualified lender. Usually, you submit the application when you apply for your mortgage. When you close on your home, the assistance money gets paid directly to your lender or sent to you, depending on the program.

Each program establishes its own rules for how you can use the funds. Many programs allow you to use the money for closing costs in addition to the down payment. 

What is the income limit for down payment assistance in Travis County?

Each down payment assistance program sets its own income limits. However, the most common income limit is 80% of the area median income (AMI), adjusted for the size of your household. 80% of the Travis County AMI for a family of four is $93,450.

This is the most common income limit, but some programs set their income limits above or below this mark, and a very small number of programs have no limit at all. Income limits are regularly reviewed and revised, so it’s worthwhile to check the most up-to-date information before assuming you don’t qualify. 

What are the minimum requirements for Travis County down payment assistance?

Each DPA program sets its own requirements, but these are the most common minimum requirements for Travis County down payment assistance:

• A minimum contribution from the buyer, usually $1,000 or less.
• A 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.

How much is a down payment for a house in Travis County (on average)?

The average cost of a home in Travis County is $536,088, and the national average down payment for first-time homebuyers is 6% (according to the National Association of Realtors). That means the average down payment for a house in Travis County is $32,165.

However, there are areas in Travis County where home prices are lower than the average, such as Manor. The average home price in Manor is $345,944, and the average down payment on a home at that price would be $20,756.

In either case, these are average down payments, not necessarily the most financially beneficial or recommended amount.

Most mortgage lenders give you a lower interest rate if you make a 5%, 10%, or 20% down payment. Therefore, making a 6% down payment may not be wise, because going from 5% to 6% doesn’t usually reduce your interest rate.

It might be better to make a 5% down payment and use the additional 1% to pay down your interest rate through mortgage points. Your lender will run the numbers with you so you can make the best choice for your situation..

What is a mortgage credit certificate and does it apply to first time homebuyers in Travis County?

The Mortgage Credit Certificate (MCC) is a federal tax credit that can be used in Travis County. This credit reduces your federal tax burden by 20% of the total mortgage interest you paid that year. This effectively reduces your mortgage interest rate because the credit refunds a portion of the interest you paid.

How do I find a mortgage lender in Travis County who works with down payment assistance?

Finding a lender who’s approved to work with your down payment assistance program is vital. It’s equally important to work with an experienced lender you trust.

Stairs Financial makes the approved lender search easy.

Stairs handles the challenging part for you by connecting you with a down payment assistance (DPA) approved lender, then matching you with all the DPA programs you could qualify for and displaying the information in one place. 

How do I find more information about the Travis County Hill Country Home Down Payment Assistance Program?

The Travis County Hill Country Home Down Payment Assistance Program is a loan for up to 6% down payment, which can be forgiven after 10 years. The program is available all over the county, including Austin. We give all of the details of the program in the local section of this article. 

Learn all about the Travis County down payment assistance programs you qualify for

Stairs Financial makes it easy to use down payment assistance (DPA). Stairs connects you with a DPA approved lender, finds all the programs you could qualify for, and shows you the information in one place, so you can compare your options side-by-side and choose the program that best matches your family and financial needs.

Learn more about your down payment assistance options.