Texas Down Payment Assistance: Grants, MCCs, and Who Qualifies

Buying a home in Texas can feel like a huge leap—especially when you see the cash needed for a down payment and closing costs. The good news? You might not have to cover it all yourself.

I’m Dorota Tyminski, a mortgage loan officer based in Katy, Texas. Over the years, I’ve helped first-time buyers, Veterans, and repeat homeowners tap into down payment assistance (DPA) and Mortgage Credit Certificates (MCCs). These programs have turned “maybe someday” into “let’s do this now” for so many of my clients, making homeownership possible much sooner than they expected.

Let’s break down what you need to know about Texas home financing, down payment assistance, and how you can use these tools to buy your home—without draining your savings.

What We’ll Cover

• What down payment assistance is and how it works
  
• The top Texas programs (statewide and local)
  
• How MCCs can save you money every year
  
• Who qualifies and how to apply
  
• How to combine programs with FHA loans, VA loans, and conventional loans
  
• Real stories from buyers I’ve worked with
  
• Common myths and mistakes to avoid

What Is Down Payment Assistance?

Down payment assistance is designed to help bridge the gap between what you’ve saved and what you need to close on a home. In Texas, these programs usually come in three forms:

• Grants: No repayment required. These are often tied to income and location eligibility.
  
• Forgivable Loans: A second lien that’s forgiven after you live in the home for a set period (usually 3–10 years).
  
• Deferred Loans: No payments due until you sell, refinance, or pay off your first mortgage.

For many of my clients, a grant or forgivable loan is the difference between waiting years to buy or moving in within months.

Major Texas Down Payment Assistance Programs

1. Texas State Affordable Housing Corporation (TSAHC)
   TSAHC offers fixed-rate mortgage loans with either a grant or a 3-year forgivable second lien. They have targeted programs for first-time buyers, teachers, Veterans, and first responders. You can also pair TSAHC with a Mortgage Credit Certificate for extra savings.
2. Texas Department of Housing and Community Affairs (TDHCA)
   TDHCA provides competitive-rate mortgage loans with down payment assistance. Their MCC program is available for qualifying buyers, and income and purchase price caps vary by county.
3. Local & City Programs
   Cities like Houston and San Antonio offer additional grants or low-interest assistance loans. Sometimes, you can combine these with state programs if the guidelines allow.

Who Qualifies for Down Payment Assistance?

Eligibility depends on the program, but here’s what most look for:

• Income Limits: Based on household size and county.
  
• Purchase Price Caps: Determined by the local housing market.
  
• Credit Score: Usually 620+ (some programs allow lower for FHA loans Texas).
  
• Homebuyer Education: You’ll need to complete a HUD-approved course.

Tip: Even if you’ve owned a home before, you might still qualify as a “first-time buyer” if you haven’t owned in the last three years.

How Mortgage Credit Certificates (MCCs) Work

A Mortgage Credit Certificate reduces your annual federal tax bill by giving you a credit for part of the mortgage interest you pay each year.

Example:
Let’s say you borrow $250,000 and pay $8,000 in mortgage interest your first year. If your MCC rate is 25%, you get a $2,000 tax credit. That’s money back in your pocket every year, for the life of the loan.

Combining DPA with FHA, VA, and Conventional Loans

Many programs let you layer benefits:

• FHA loans Texas: Low down payment, flexible credit.
  
• VA loans Houston TX: No down payment for eligible Veterans.
  
• Conventional loans: Minimum 3% down for qualifying buyers.

Pairing a low-down-payment loan with a grant or MCC can drastically reduce your upfront and monthly costs.

Real Buyer Stories

Case 1: First-Time Teacher in Houston
She used a TSAHC grant and an MCC, bought her home with just $1,500 out of pocket, and now saves about $150 a month compared to renting.

Case 2: Veteran in Katy
He combined a VA loan with a city of Katy down payment grant, closed with $0 down, and pays no mortgage insurance.

How to Apply for Down Payment Assistance

Here’s how the process works when you work with me:

• Check Eligibility: I’ll review your income, credit, and location.
  
• Complete Education: Take the required homebuyer course.
  
• Select a Participating Lender: I’m approved for TSAHC, TDHCA, and local programs.
  
• Submit Application: We’ll handle the program paperwork alongside your loan file.

Myths and Mistakes to Avoid

Myth: Down payment assistance is only for low-income buyers.
Fact: Many middle-income households qualify.

Mistake: Waiting to save a full 20% down.
With assistance, you can often buy with far less and start building equity sooner.

Mistake: Assuming you can’t combine programs.
Some can be stacked for bigger benefits.

FAQs

Do I have to be a first-time buyer?
Not always—repeat buyers can qualify under certain conditions.

Will DPA slow down my closing?
Not if your lender is experienced with these programs.

Can I use DPA for new construction?
Yes, if guidelines permit.

Let’s See If You Qualify

If you’re curious about down payment assistance or Mortgage Credit Certificates, let’s talk. I’ll help you explore every option to reduce your costs and make your home purchase possible—without draining your savings.

Ready to get started?
Contact Dorota for mortgage pre-approval, use the home loan calculator, or just ask your questions. I’m here to help you find the best mortgage lenders and the right Texas home financing for your needs.

Let’s make your homeownership dream a reality—together.