If you’ve looked at Texas home prices and interest rates lately, you’ve probably had the same thought a lot of buyers have in 2026:
“We can handle the monthly payment… it’s the upfront cash that’s tough.”

That’s exactly what Down Payment Assistance (DPA) is designed to solve. The tricky part is that “down payment assistance” isn’t one program—it’s a menu of statewide and local options, each with different rules, repayment terms, and tradeoffs.

Below is a simple guide to the most common Texas DPA paths in 2026, who tends to qualify, and how to avoid the most expensive mistakes.

What “Down Payment Assistance” really is (and why it’s not always “free money”)

Most DPA comes in one of these forms:

1. Grant (no repayment)
2. Forgivable second loan (forgiven after you meet terms like living in the home for X years)
3. Deferred-payment second loan (no monthly payment, but repaid when you sell/refi or at maturity)
4. Tax credit (helps year-after-year, not at closing—like an MCC)

Many Texas programs pair a 30-year fixed mortgage with assistance that can be used for down payment and/or closing costs—but the assistance often affects your interest rate, total fees, or long-term flexibility.

Big statewide Texas DPA programs to know in 2026

1) TDHCA “Texas Homebuyer Program” (My First Texas Home + My Choice Texas Home)

Texas Department of Housing and Community Affairs (TDHCA) runs one of the best-known statewide options.

• My First Texas Home is geared toward first-time buyers (with exceptions in certain cases/areas, including for qualified veterans). (The Texas Homebuyers Program)
• My Choice Texas Home is designed for a broader set of buyers (not limited to first-time homebuyers). (The Texas Homebuyers Program)
• TDHCA highlights down payment/closing cost assistance up to 5% of the first lien amount on at least some program offerings. (The Texas Homebuyers Program)

Common “you’ll likely need” items:

• Working with a participating/approved lender
• Meeting income limits and purchase price limits (limits vary by county and household size)
• Often completing a homebuyer education step (The Texas Homebuyers Program)

Best for: Buyers who qualify within program limits and want a structured, widely-accepted path with a participating lender network.

2) TSAHC (Texas State Affordable Housing Corporation): “Homes for Texas Heroes” + “Home Sweet Texas”

TSAHC is another major statewide resource, offering home loans with down payment assistance options.

• Homes for Texas Heroes is aimed at eligible professions (teachers, first responders, corrections officers, and veterans). (Texas Housing Corporation)
• Home Sweet Texas is aimed at low to moderate-income Texas homebuyers. (Texas Housing Corporation)

Best for: Buyers who fit the Heroes categories, or households that meet income guidelines and want a statewide program option outside TDHCA.

3) SETH (Southeast Texas Housing Finance Corporation) “5 Star Texas Advantage”

SETH is widely used across Texas through participating lenders and can be especially attractive because it’s not limited to first-time buyers on certain program structures.

• Provides down payment/closing cost assistance (commonly described as up to 5%, based on final loan amount) (sethfc.com)
• Assistance may be structured as a second loan with options such as forgivable after a short period or deferred payment (depending on the daily offering) (sethfc.com)

Best for: Buyers who need meaningful help with cash-to-close and like the flexibility of FHA/VA/USDA/Conventional options through the program. (sethfc.com)

Local DPA example: City of San Antonio (HIP 80 / HIP 120)

If you’re buying within San Antonio city limits, local programs can sometimes be a game-changer.

The City of San Antonio’s Homeownership Incentive Programs (HIP) can provide assistance as a 0% interest, no-payments second loan—with forgiveness schedules if you stay in the home.

• HIP 80: typically $1,000–$30,000 with forgiveness tied to time-in-home (San Antonio)
• HIP 120: typically $1,000–$15,000 with a different forgiveness structure (San Antonio)

Important gotchas:

• The home must be within San Antonio city limits (San Antonio)
• These programs have purchase price limits and income rules (San Antonio)
• There are guidelines that often define “first-time homebuyer” (commonly no ownership interest in a home in the past 3 years, with certain exceptions). (San Antonio)

Best for: Buyers purchasing inside San Antonio who qualify by income/purchase price and want potentially larger assistance.

“No down payment” alternatives (not DPA, but often better)

Sometimes the smartest move is skipping DPA entirely if you qualify for a true low/zero-down loan:

• VA loans (eligible veterans/service members): often 0% down (when eligible and the home qualifies).
• USDA loans (rural areas): USDA’s programs can provide 100% financing / no down payment for eligible buyers and eligible areas. (rd.usda.gov)

Why this matters: Some DPA programs raise your rate or add a second lien. If you qualify for VA or USDA, you may get a cleaner structure.

Who typically qualifies for DPA in Texas?

While every program is different, most use some mix of:

• Income limits (based on household size + county/area)
• Purchase price limits
• Minimum credit score (varies by program/lender)
• Primary residence requirement (you live there—no investor use)
• Homebuyer education course (common for many programs) (The Texas Homebuyers Program)
• Using an approved participating lender (very common)

If you’re not sure you qualify, the fastest route is not guessing—it’s having a lender check program eligibility while we’re also verifying property fit and offer strategy.

Pros and cons of down payment assistance (the real tradeoffs)

The big pros

• Lower cash-to-close (often the #1 barrier)
• Earlier entry into homeownership (building equity sooner)
• Can preserve savings for repairs, moving costs, or reserves

The big cons (where people get burned)

• Higher interest rate than non-DPA options (common with many assistance structures)
• Second lien can complicate refinancing or selling early
• Forgiveness rules: sell or refi too soon and you may repay some/all
• Program availability can change (funds can be limited or updated)

Rule of thumb we use:
If you plan to move again soon, we examine DPA very carefully—sometimes it’s still worth it, but sometimes it’s not.

How to use DPA without losing the house you want

In competitive pockets (even in a more balanced 2026 market), DPA can impact offer strength if timelines or approvals get complicated. The best strategy:

1. Get fully pre-approved with a lender who actually closes DPA deals regularly
2. Confirm program + property compatibility early (some condos, locations, or property conditions can be an issue)
3. Keep your offer clean where possible (tight deadlines, clear terms, realistic seller expectations)
4. Keep a backup plan (sometimes switching from “assistance option A” to “option B” saves the deal)

Down payment assistance can be a game-changer—but it’s also paperwork-heavy and full of program rules. At Correa Realty Group, we walk through the process with you (statewide, local, or VA/USDA alternatives), connect you with lenders who consistently close DPA loans, and build an offer strategy that still wins the right home—while avoiding costly missteps like the wrong property type, timeline snags, or early-payoff surprises. Tell us where you’re looking (San Antonio, Garden Ridge, New Braunfels, Schertz/Cibolo, Canyon Lake, and beyond) and a rough household income range, and we’ll map the most realistic options and your next best steps.

FAQs

Is down payment assistance only for first-time homebuyers?
No. Some programs focus on first-time buyers, but others are available more broadly (for example, TDHCA’s My Choice Texas Home is not limited to first-time homebuyers). (The Texas Homebuyers Program)

Can DPA be used for closing costs too?
Often yes—many programs allow assistance for down payment and/or closing costs, but each program has specific rules. (sethfc.com)

Is it a grant or a loan?
Depends. Some are grants; many are second-lien loans (forgivable or deferred). For example, SETH commonly structures assistance as a second loan with forgivable/deferred options. (sethfc.com)

Can I combine DPA with a mortgage tax credit (MCC)?
Sometimes. Texas offers Mortgage Credit Certificate options that provide a federal tax credit benefit, but combinations depend on the first mortgage and program rules. (The Texas Homebuyers Program)

Does San Antonio have its own program?
Yes. The City of San Antonio’s HIP programs can provide DPA as a 0% interest, no-payment second loan with forgiveness schedules, subject to eligibility and purchase price limits. (San Antonio)