First-Time Homebuyer Programs & Grants

Saving up for a down payment and closing costs on your first home can feel like an uphill battle, especially in Texas's competitive real estate market. But many first-time homebuyers are unaware of the incredible programs and grants designed specifically to make homeownership more accessible. These aren't complicated handouts; they are smart financial tools offered by federal, state, and even local city governments to help you bridge the gap between renting and owning.

So, are you leaving free money behind? This guide will walk you through the first-time homebuyer programs available in Texas, especially in the Dallas-Fort Worth (DFW) area, so you can buy your dream home with confidence.

What Types of Homebuyer Assistance Are Available?

First-time homebuyer programs in Texas come in several forms, each with its own benefits and eligibility rules. Understanding the differences is the first step toward finding the right fit for your financial situation.

Down Payment Assistance (DPA) Programs

These are the most common forms of aid, designed to help you cover the large upfront cost of buying a home.

• · Grants: This is the best-case scenario—free money that does not need to be repaid. It is typically provided as a lump sum at closing to cover some or all of your down payment or closing costs.
• · Forgivable Loans: Often structured as a second mortgage, these loans are gradually "forgiven" over a set number of years (e.g., 3-10). As long as you continue to live in the home as your primary residence, you won't have to pay the loan back. If you sell or refinance before the term ends, you may need to repay a portion.
• · Deferred Loans: Repayment of these loans is postponed until a specific event, like selling the home or refinancing your main mortgage. They often come with a low or 0% interest rate, making them a silent helper in your home purchase.
• · Low-Interest Second Mortgages: These loans are repaid monthly alongside your primary mortgage but at a much lower interest rate than a traditional loan.

Mortgage Credit Certificates (MCCs)

An MCC is a powerful tool that provides a federal income tax credit (not just a deduction) based on a percentage of the mortgage interest you pay each year. This directly reduces your tax liability, which can increase your take-home pay and make your monthly mortgage payment more affordable. While the federal program has seen changes, many state and local housing authorities in Texas still offer MCCs.

What Are the Best Loan Programs for First-Time Buyers?

Beyond grants, several government-backed loan programs are perfect for first-time buyers due to their flexible requirements.

• · FHA Loans: Backed by the Federal Housing Administration, these are very popular with first-time buyers. They allow for lower credit score requirements and require a down payment as low as 3.5%.
• · VA Loans: This is an incredible benefit for eligible veterans, active-duty service members, and surviving spouses. VA loans often require no down payment and have no private mortgage insurance (PMI), saving you thousands upfront and monthly.
• · USDA Loans: Ideal for properties in designated rural and suburban areas around Texas cities, these loans offer 100% financing (no down payment) for low-to-moderate-income buyers. You might be surprised which growing communities qualify.

What Texas-Specific Programs Can I Use?

The state of Texas offers robust programs to help its residents achieve homeownership. The Texas State Affordable Housing Corporation (TSAHC) is a key resource.

• · Homes for Texas Heroes Program: This program is designed for public service professionals who are vital to our communities. It is available to teachers, police officers, firefighters, EMS personnel, and veterans.
• · Home Sweet Texas Home Loan Program: This program is available to low and moderate-income Texans who do not qualify for the "hero" professions.

Both TSAHC programs provide a 30-year fixed-rate mortgage and offer down payment assistance as either a grant or a deferred forgivable loan.

Am I Eligible for First-Time Homebuyer Programs?

While the specific rules vary by program, you might be surprised to find you qualify. Here are the common eligibility criteria:

• · First-Time Homebuyer Status: This usually means you haven't owned a home as your primary residence in the last three years. Some programs make exceptions for veterans or for homes purchased in designated "targeted areas."
• · Income Limits: Most programs have household income limits that vary based on your family size and the median income of your specific area (e.g., Princeton in Collin County will have different limits than Fort Worth in Tarrant County).
• · Credit Score: While you don't need perfect credit, a minimum score (often between 620-640) is typically required.
• · Property Requirements: The home must be your primary residence and fall within certain sales price limits.
• · Homebuyer Education Course: Many programs require you to complete a HUD-approved homebuyer education course. This is a valuable class that prepares you for the responsibilities of owning a home.

Where Can I Find Local Grants in the DFW Area?

Beyond state-level programs, many cities and counties within the Dallas-Fort Worth Metroplex offer their own assistance. As of early 2026, it is always a good idea to check local government websites for the latest funding and availability.

• · City of Fort Worth Homebuyer Assistance Program (HAP): This program can provide significant down payment and closing cost assistance for eligible first-time buyers purchasing a home within Fort Worth city limits.
• · Federal Home Loan Bank of Dallas (FHLB Dallas): This organization provides funding to its member banks and credit unions. Their Homebuyer Equity Leverage Partnership (HELP) grants can offer substantial assistance in Texas, though funds are often in high demand and are distributed quickly.
• · Other Local Initiatives: Many other cities in the DFW area, like McKinney, Denton, and Plano, have their own programs. It is always worth checking the official city websites for their housing or community development departments.

What is My Action Plan to Get This Money?

Navigating the world of assistance programs can seem daunting, but the potential savings are well worth the effort. Follow these steps:

• 1. Educate Yourself: Start by taking a HUD-approved homebuyer education course. You will learn valuable information, and it is often a prerequisite for assistance programs.
• 2. Check Your Eligibility: Use free online tools, like TSAHC's eligibility quiz, to get a quick idea of whether you meet the basic criteria for state programs.
• 3. Connect with an Approved Lender: This is the most important step. Not all lenders work with every program. Seek out a mortgage lender who specializes in first-time homebuyer programs in the DFW area. They can identify all the programs you qualify for and guide you through the application process.
• 4. Gather Your Documents: Be ready with your financial records, including income statements, recent tax returns, and bank statements.

Don't let the upfront costs of homeownership stop you from pursuing your dream. A program or grant likely exists to help you. Start exploring today—you might be surprised by how much money is waiting for you!