Austin TX Down Payment Assistance Programs (2025)

Down Payment Assistance Is More Common Than You Think

Many Austin home buyers do not realize they may qualify for programs that provide thousands of dollars toward their down payment and closing costs. These programs are funded by state agencies, local municipalities, and housing authorities specifically to help moderate-income buyers achieve homeownership.

Down payment assistance (DPA) is not charity — it is a strategic tool designed to bridge the gap between what buyers can save and what they need to close. Programs range from outright grants (free money) to forgivable second liens that disappear after you live in the home for a set period.

Texas State Programs

TDHCA My First Texas Home

The Texas Department of Housing and Community Affairs offers the My First Texas Home program for first-time buyers (or those who have not owned a home in the past 3 years). Key features:

• Up to 5% of the loan amount in DPA (as a deferred, forgivable second lien)
• Works with FHA, VA, and USDA first mortgages
• 30-year fixed rate set by TDHCA (often competitive with market rates)
• Income and purchase price limits apply (varies by county)
• Homebuyer education course required

TDHCA My Choice Texas Home

Similar to My First Texas Home but available to repeat buyers as well. Offers up to 5% DPA with the same program structure. This is a strong option for buyers who have owned a home before but need help with the down payment on their next purchase.

TSAHC Homes for Texas Heroes

The Texas State Affordable Housing Corporation offers DPA for teachers, firefighters, EMS workers, police officers, corrections officers, and veterans. Benefits include:

• Up to 5% of the loan amount as a grant (does not need to be repaid)
• Available with conventional, FHA, VA, and USDA loans
• No first-time buyer requirement
• Competitive 30-year fixed rates

TSAHC Home Sweet Texas

Available to all qualified buyers (not just heroes professions). Offers the same grant-based DPA of up to 5% with income and purchase price limits. This is one of the most accessible DPA programs in Texas.

Austin / Travis County Programs

Austin Housing Finance Corporation (AHFC)

The City of Austin offers DPA through the Austin Housing Finance Corporation for buyers purchasing within Austin city limits. Programs and funding levels change periodically — contact us for the latest availability. Historically, AHFC has offered:

• Up to $40,000 in DPA for qualifying buyers
• Forgivable over 5-10 years of continuous occupancy
• Income limits based on Austin's Area Median Income (AMI)
• Purchase price limits apply
• Homebuyer education required

How to Qualify for DPA

While each program has specific requirements, most share these common criteria:

• Income limits: Typically 80-115% of the Area Median Income for your county and household size
• Credit score: Usually 620-660 minimum, depending on the program and first mortgage type
• Primary residence: The home must be your primary residence (not a rental or investment property)
• Homebuyer education: Most programs require completion of a HUD-approved homebuyer education course (often available online)
• Purchase price limits: Vary by county and program, but typically cover homes in the median price range

Combining DPA with Low Down Payment Loans

DPA becomes even more powerful when combined with low-down-payment mortgage programs:

• FHA + DPA: Only 3.5% down required, and DPA can cover all of it. Potential zero cash-to-close scenario.
• Conventional 97 + DPA: Only 3% down for first-time buyers, with DPA covering the down payment.
• USDA + DPA: USDA loans already require $0 down, and DPA can cover closing costs.
• VA + DPA: VA loans require $0 down, and DPA can cover the funding fee and closing costs.

In many cases, buyers using DPA can close on a home with less than $1,000 out of pocket — sometimes nothing at all.

Common DPA Misconceptions

• "DPA is only for low-income buyers." Many programs extend to moderate-income households earning up to 115% of area median income. In the Austin metro, that can mean household incomes over $100,000.
• "DPA means a higher interest rate." Some programs have slightly above-market rates, but the net savings from the DPA usually far outweigh the rate difference. We run the numbers both ways for every buyer.
• "There is a catch." DPA programs have straightforward requirements — live in the home as your primary residence for a set period, and the assistance is yours. There are no hidden strings.
• "The process takes longer." Most DPA programs add minimal time to the closing process. We regularly close DPA loans within 30-35 days.