Overview
Texas combines some of the strongest job growth in the country with a median home price near $300,000 — well below the national figure — which makes it one of the more attainable large states for first-time buyers. The catch is property taxes: with no state income tax to fund services, Texas leans on property tax bills that rank among the highest in the nation, so the monthly cost of owning can surprise buyers who only budget for principal and interest. Two state agencies help bridge the down payment gap: the Texas Department of Housing and Community Affairs (TDHCA) and the Texas State Affordable Housing Corporation (TSAHC).
TDHCA's My First Texas Home program pairs a below-market 30-year fixed mortgage with down payment assistance worth up to 5% of the loan amount, delivered as a forgivable second lien. Because the assistance is a forgivable second rather than an outright grant, it carries no monthly payment and is written off entirely once you meet the retention period — but you'll repay a prorated balance if you sell or refinance early. The program is reserved for first-time buyers (defined as not having owned a home in the past three years) who meet TDHCA's county-by-county income and purchase-price limits and complete a HUD-approved homebuyer education course.
State Programs
My First Texas Home Program
Below-market rate mortgage with DPAMy Choice Texas Home
Down payment assistanceHomes for Texas Heroes (TSAHC)
Grant or forgivable down payment assistanceFederal Programs Available in Texas
These nationwide programs can be combined with Texas state assistance for maximum benefit.
FHA Loan Program
Low down payment mortgageVA Home Loan
Zero down payment mortgageUSDA Rural Development Loan
Zero down payment mortgageTips for First-Time Buyers in Texas
Repeat buyers aren't shut out: TDHCA's My Choice Texas Home offers the same up-to-5% assistance without the first-time requirement. A second state entity, the Texas State Affordable Housing Corporation, runs the Homes for Texas Heroes program, which layers a 3%–5% grant or forgivable second on top of a fixed-rate mortgage specifically for teachers, police officers, firefighters, EMS personnel, corrections officers, and veterans; its Home Sweet Texas track opens the same help to other moderate-income buyers. Because TSAHC assistance can come as a true grant that never has to be repaid, it's often worth comparing against TDHCA's forgivable structure before you choose.
Texas's tax math cuts both ways for homeowners. There is no state income tax, so every dollar of salary stretches further toward a mortgage payment than it would in California or New York. But effective property taxes average roughly 1.68% of home value — among the highest in the country — which on a $300,000 home works out to about $5,000 a year, or more than $400 a month on top of principal, interest, and insurance. Budget for that line item up front, and file for the state's homestead exemption, which reduces the taxable value of your primary residence and caps how fast the assessed value can rise.
Texas's largest cities run their own assistance programs that can be combined with state help. Houston's Homebuyer Assistance Program offers up to about $50,000 for income-eligible buyers within city limits, and Dallas's program reaches up to roughly $60,000 in targeted areas; San Antonio, Fort Worth, and Austin operate similar funds. Veterans and active-duty buyers near Fort Cavazos, Joint Base San Antonio, or Fort Bliss should also weigh a zero-down VA loan against the assistance programs. A HUD-approved housing counselor can map which combination of city, state, and federal help fits your price range — start with the education course most of these programs require anyway.
Frequently Asked Questions
For educational purposes only -- not financial or tax advice. Program details, eligibility requirements, and benefit amounts are subject to change. Verify all information directly with the administering agency before applying. Last verified: June 15, 2026.