First-Time Homebuyer Programs
Texas and Nationwide Grants & Assistance 2026

The biggest barrier to homeownership for most first-time buyers isn't qualifying for a mortgage — it's coming up with the down payment. Down Payment Assistance programs exist to solve exactly this problem. In Texas and nationwide, there are dozens of programs offering grants, forgivable loans, and low-interest second mortgages to help buyers close with little to no money down.

What Is Down Payment Assistance?

Down Payment Assistance (DPA) programs provide funds — either as grants (free money) or soft second mortgages (low/no interest, often forgivable) — to cover a buyer's down payment and sometimes closing costs. These programs are typically funded by state and local housing agencies, nonprofits, and government entities.

Texas-Specific Programs (TDHCA)

The Texas Department of Housing and Community Affairs (TDHCA) administers several programs for Texas buyers:

Program	Benefit	Income Limit (approx.)
My First Texas Home	30-yr fixed loan + up to 5% DPA as 0% interest second mortgage	Up to 115% AMI
Texas Mortgage Credit Certificate	Federal tax credit up to 40% of annual mortgage interest	Varies by county
My Choice Texas Home	Up to 5% DPA; not limited to first-time buyers	Up to 115% AMI
TDHCA HOME Down Payment Assistance	Grant-based assistance for very low-income buyers	80% AMI
City/County Programs	Houston, Dallas, Austin, San Antonio each offer local DPA	Varies

National Programs Available Anywhere

• FHA Loans + Approved DPA Providers: HUD-approved DPA programs layer on top of FHA loans, covering the 3.5% down payment entirely
• Fannie Mae HomeReady: 3% down with reduced PMI for low-to-moderate income buyers
• Freddie Mac Home Possible: 3% down for qualifying income-eligible buyers
• USDA Rural Development: 0% down for eligible rural and suburban properties, no income limit in some areas
• Good Neighbor Next Door (HUD): 50% discount on HUD-owned homes for teachers, firefighters, EMTs, and law enforcement
• Employer Assistance Programs: Many large employers offer housing assistance as part of benefits

FHA + DPA Combination — The $0 Down Path

The most common path to $0 out-of-pocket involves combining an FHA loan with a DPA grant or second mortgage:

1. Get approved for an FHA loan (3.5% down required)
2. Layer on an approved DPA program that covers the 3.5% down payment
3. Use seller concessions or lender credits to cover closing costs
4. Result: Close with $0 out of pocket

First Colony Mortgage specializes in this combination. Dustin will identify which DPA programs you qualify for in your county and structure the transaction to minimize your cash at closing.

Who Qualifies for DPA Programs?

Eligibility varies by program, but common requirements include:

• Household income at or below program limit (typically 80–115% of Area Median Income)
• Property must be the buyer's primary residence
• Minimum credit score (typically 620–640)
• Completion of homebuyer education course (typically free, online)
• Not having owned a home in the past 3 years (for "first-time buyer" programs)

How to Apply

DPA programs work through approved lenders — not directly through the housing agency. To access DPA funds, you apply for your mortgage through an approved lender (like First Colony Mortgage), who then layers the DPA program onto your loan. The key is working with a loan officer who knows which programs are available in your area and how to structure them correctly.