The down payment is the single biggest barrier to homeownership for most first-time buyers. The good news? You may not need as much as you think — and there are programs designed to help you cover it.
What Is Down Payment Assistance?
Down payment assistance (DPA) programs provide funds to help homebuyers cover their down payment and, in many cases, closing costs. These programs come in several forms:
- Grants: Free money that doesn't need to be repaid
- Forgivable second liens: Loans that are forgiven after you live in the home for a set period (typically 3-5 years)
- Deferred second liens: Loans with no monthly payments that are repaid when you sell, refinance, or pay off the first mortgage
- Low-interest second mortgages: Small loans with below-market interest rates
Texas Down Payment Assistance Programs
Texas offers some of the most generous DPA programs in the country.
TDHCA My First Texas Home
The Texas Department of Housing and Community Affairs (TDHCA) offers up to 5% of the loan amount as down payment and closing cost assistance. Key features:
- Available as a 30-year deferred forgivable second lien
- Works with FHA, VA, and USDA first mortgages
- Must be a first-time homebuyer (haven't owned a home in the past 3 years)
- Income and purchase price limits apply by county
- Available statewide
TSAHC Home Sweet Texas
The Texas State Affordable Housing Corporation (TSAHC) offers two programs:
- Homes for Texas Heroes: For teachers, firefighters, EMS, police, corrections officers, and veterans — up to 5% in DPA
- Home Sweet Texas: For all eligible buyers — up to 5% in DPA
- Both offer grants (no repayment required!) or second lien options
- Available with FHA, VA, USDA, and conventional loans
Local City and County Programs
Many Texas cities offer additional DPA:
- Houston: Various programs through the Houston Housing Authority
- San Antonio: Down payment assistance through the City's Homeownership Incentive Program
- Dallas: Check with your loan officer for current city-funded programs
Arkansas Down Payment Assistance Programs
ADFA Down Payment Assistance
The Arkansas Development Finance Authority (ADFA) offers the ADFA Move-Up Program and ADFA HomeToOwn Program:
- Up to ,000 in down payment and closing cost assistance
- Available as a second mortgage with favorable terms
- Works with FHA and conventional first mortgages
- Income limits apply based on household size and county
- Available to first-time and repeat buyers (for some programs)
ADFA Mortgage Credit Certificate (MCC)
While not direct DPA, the MCC provides a federal tax credit of up to ,000 per year based on mortgage interest paid. This can help reduce your tax burden and free up cash for homeownership costs.
How to Qualify
While each program has specific requirements, here are the common eligibility criteria:
- Income limits: Your household income must fall within program guidelines (varies by county and household size)
- Purchase price limits: The home price must be below the program maximum
- First-time buyer status: Many programs require you to be a first-time buyer (defined as not owning a home in the past 3 years), though some are available to repeat buyers
- Homebuyer education: Most programs require completing a HUD-approved homebuyer education course
- Primary residence: The home must be your primary residence
- Credit and loan requirements: You must qualify for the underlying first mortgage
How to Apply
You don't apply for DPA separately — it's part of your mortgage application. Here's how it works:
- Connect with a participating lender who is approved to offer these programs (not all lenders are!)
- Get pre-qualified so your loan officer can identify which programs you're eligible for
- Complete homebuyer education if required
- Find your home and make an offer
- Your lender coordinates the DPA as part of your closing
Don't Leave Money on the Table
Many eligible buyers miss out on DPA simply because they don't know about it — or because their lender isn't approved to offer these programs. As a participating lender for multiple Texas and Arkansas DPA programs, I can help you identify every dollar of assistance you qualify for.
Contact me today to find out which programs are available for your situation.