Texas First Time Home Buyer – 2022 Loan Programs
Are you a first time home buyer looking to purchase a home in Texas? On this page you can learn about the different types of mortgage programs that are available to first time home buyers. You may also view the different down payment assistance programs that are currently being offered in Texas.
Texas First Time Home Buyer Loans
Below are some of the mortgage options that may be available to you.
Types of Mortgages:
- Conventional Loans – Conventional loans offer the best loan terms to borrowers with good or excellent credit, as well as those who can afford to place a larger down payment. If you are able to put 20% or more down, you will be able to avoid paying private mortgage insurance (PMI). However, conventional loans also offer low down payment options, such as programs that only require 3% down.
- FHA Loans – FHA loans are a good option for borrowers who may not be able to qualify for a conventional loan. The qualification requirements for FHA loans are much more lenient than conventional loans. This includes options for home buyers with credit scores as low as 500 (in order to qualify for a 3.5% down payment, you must have a credit score of at least 580).
- USDA Loans – USDA loans provide home buyers the opportunity to purchase a rural home without any down payment. These loans are intended for borrowers with low-to-moderate income. In addition to not requiring any money down, you can also finance the closing costs into the loan. This means you can essentially buy a home with no money out of pocket!
- VA Loans – Active duty military members and veterans can apply for a VA loan which allows you to buy your first home without any down payment. These loans are not available to the general public, but exclusively to military/veterans.
- Jumbo Loans – Any mortgage that does not meet the conforming loan limits is a jumbo loan. You can lookup the 2022 conforming loan limits for your county using this conforming loan limits calculator. If you want to buy a more expensive home, and have the income to qualify, jumbo lenders offer loan amounts up to $5,000,000.
- Non-Prime Loans – If you do not qualify for any of the above types of loans, you may consider a non-prime loan. These programs are helpful to people with a variety of credit issues (such as low credit scores, or a recent bankruptcy). Non-prime loans do not require any waiting periods after a bankruptcy, and most non-prime lenders allow credit scores as low as 500. Regardless of your situation, you should consider learning more about non-prime loans if you do not qualify for any of the other types of mortgages featured above.
These are some of the mortgage options that are available to first time home buyers.
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Upon receiving your request, we will match you with a mortgage lender that offers first time home buyer loans in Texas. You will be provided with a free consultation, and the opportunity to get pre-approved for a mortgage.
Texas Down Payment Assistance Programs
First time home buyers in Texas may be eligible to receive down payment assistance. This includes programs offered throughout the entire state, as well as several locally offered programs. You can learn more about these programs below.
Texas Statewide Programs
The following down payment assistance programs are available through the entire state:
My First Texas Home
You may be able to receive up to 5% of the purchase price to use for your down payment and closing costs. This comes in the form of interest free loan, which acts a “second lien” on the property. You do not have to make any payments on the loan, but once the home is sold or refinanced, the money has to be repaid.
- Be a first time home buyer (or not have owned a home in the last 3 years).
- Have a credit score of at least a 640 in order to be eligible.
- Complete a homebuyer education class.
- Occupy the home yourself. No investment / rental properties allowed.
- Maximum debt-to-income ratio allowed is 45%. This means your current monthly payments on debt obligations, along with the new mortgage payment (principle, interest, taxes, and insurance) must not exceed 45% of your bring home income.
- Meet certain income and purchase price limits, which vary based on the location in Texas you want to purchase a home in. You can view these limits here.
To learn more about this program, visit the Texas Department of Housing and Community Affairs website.
5 Star Texas Advantage Program
This program is available through the entire state of Texas, except for Travis County, and the city limits of El Paso and Grand Prairie. The maximum amount of assistance is 5% of the mortgage loan amount. The funds are provided as a second mortgage, and are forgiven after 3 years, which means you do not have the pay the money back (and no monthly payments are ever required).
In order to qualify for this program, you must meet the following program requirements.
- It is NOT required that you be a first time home buyer.
- You must have a credit score of 640 or higher.
- The maximum sales price is $484,350.
- You must complete an online homebuyer education course.
- You must meet the income limits, which depend on your county, and the type of mortgage you use (conventional, FHA, VA, or USDA).
To learn more about this program, visit the Southeast Texas Housing Finance Corporation website.
Homes for Texas Heroes
Teachers, firefighters, police officers, veterans, and certain low-to-moderate income borrowers can apply to receive 2-5% in down payment assistance. One of the most significant advantages of Homes for Texas Heroes is that the money does NOT have to be repaid! Most other DPA programs require the funds to be repaid once the home is sold or refinanced, but this is not the case with this program.
In addition to the types of “heroes” listed above, there are several other types of professionals who are eligible. This includes: peace officers, corrections officers, public security officers, peace officers, emergency medical technicians, teacher aides, librarians, school nurses, and school counselors.
To learn more about this program, visit the Homes for Heroes website.
Locally Offered Programs
Below are the down payment assistance programs that are offered locally:
- Abilene – First time home buyers in Abilene may be eligible to receive up to $5,000 in down payment assistance. In order to qualify, you must be able to prove that you have lived in the city of Abilene for at least the last 6 months. Your income also must not exceed the HUD income limits, and the property your purchase must meet certain requirements as well. You can learn more about this program on the Office of Neighborhood Services website.
- Arlington – If your income is 80% of below the median average in Arlington, TX, you may be eligible for $7,500 in down payment assistance through the AHAP Program. If someone in your home is disabled you can receive another $2,500, which totals up to $10,000 in assistance. To find out more visit the above link or you can also access more information on the Tarrant County Housing Partnership website.
- Austin – Easily the most generous DPA in all of Texas, first time homebuyers in Austin can apply for up to $40,000 in assistance! This is in the form of a forgivable loan. You can learn more here.
- Baytown – The Baytown Community Development Block Grant Program offers up to $4,500 in assistance. The funds are considered a deferred 5 year loan, which means it disappears after 5 years. If you sell your home or refinance in those 5 years, you will be required to pay the money back when your mortgage is paid off through the refinance or home sale. To learn more about this program, click here.
- Beaumont – Beaumont first time home buyer assistance allows up to $14,999 to be borrowed to use towards a down payment and loan closing costs. The requirements are that you can only purchase a home for $120,000 or less. You also must contribute a minimum of $2,000 towards the down payment or loan costs. You also must complete a homebuyer education course. You can learn more here.
- Brownsville – Brownsville offers more than most locations in Texas. You might be able to receive up to $25,000 in down payment assistance. Your income must be 80% or less than the median average. Also, you must contribute $1,000 towards the home purchase.
- Bryan – Homebuyers in Bryan, Texas may apply for up to $30,000 in down payment assistance. It is in the form of a 0% loan, which means you do not pay any interest or payments on it. Current homeowners may be able to obtain funds for rehabilitation purposes. Click here to find out more on the programs available in Bryan, Texas.
- College Station – Interested in buying a home in College Station? If so, you should be excited to learn that you might qualify for $49,999 in down payment assistance. How this specific program works is you are provided a loan which is considered a second mortgage. The money is not a grant, but a loan which must be paid back once you refinance or sale your home. Visit the City of College Station website for more details.
- Corpus Christi – If you are planning to buy a home in Corpus Christi, you could be eligible for $5,000 in down payment assistance through the Housing and Community Development Department. This program is called the Infill Housing Incentive Program (IHIP). The purpose of this initiative is to promote new construction and to rehabilitate homes. However, you can also use the funds to buy an existing home of your choice.
- Dallas – First time home buyers in Dallas may apply for up to $8,500 in down payment assistance. This incentive is called the City Wide Program and is only available to homebuyers who make 80% or less of the median family income. Another great aspect of this program is there is also a $1,500 grant which can go towards home improvements. To learn more visit the Dallas Housing and Community Services Department.
- Denton – The city of Denton offers a DPA program which will provide you with up to $5,000 in the form of a deferred loan (no payments or interest on it). You can not have more than $10,000 in savings or assets. Also, you must be able to contribute 1.75% of the sales price, and have one months reserves after closing (be able to prove you have an extra month worth of the payment). The maximum sales price allowed is $200,000. You can read more about the program here.
- El Paso – El Paso first time homebuyers can receive up to $5,000 in down payment and closing cost assistance. Another program available is what is called a principle reduction assistance program which provides up to $35,000 in funds which can be applied towards your home equity. The income limits for both programs are between $29,350 to $45,300 depending on how many adults live in your household. The max home price allowed is $121,000. You can learn more this program here.
- Fort Worth – If you wish to buy a home within the city limits of Fort Worth, it is advised that you inquire to see if you are eligible to receive a subsidy of up to $14,999 to use towards your home purchase. The income limits range from $39,050 for 1 person, all the way up to $73,600 for 8 people. To find out more about other guidelines, visit the Forth Worth Homebuyers Assistance Program website.
- Frisco – Buying a home in Frisco, TX? Low to moderate income borrowers may be able to get $10,000 in forgivable assistance (doesn’t have to be paid back). The income limits for the entire household can not exceed $123,055. This is higher than most cities and counties in Texas allow. The maximum purchase price is also significantly higher than many municipalities, which allows up to $362,250. Find out more about this opportunity here.
- Galveston – The City of Galveston offers up to $14,500 in assistance. Find out more on the city of Galveston website.
- Garland – Eligible participants may receive $10,000 in down payment assistance through the Garland first time home buying program. This is available to those who make 80% or less of the median income in Garland. The funds are considered a forgivable loan meaning you only have to pay it back if you sell the home or refinance within 5 years. You can learn more on the city of Garland website.
- Grand Prairie – The Grand Prairie DPA program allows you to borrow $5,000 to use towards your down payment. The property price limit is $200,000 and it is only available for low and moderate income borrowers (80% or lower than average income in Grand Prairie). There are other requirements related to the property and participants. Find out more on the city of Grand Prairie website.
- Harlingen – The Harlingen Community Development Corporation administers funds for the HOME Investment Partnership Program (HOME). The requirements for the Harlingen DPA is a little more complex than other local DPA programs. We encourage you to speak with a loan representative or review the information the the Harlingen website closely to understand if you may be eligible and how to apply.
- Harris County – First time home buyers in Harris County, may be eligible to receive up to $23,800 in down payment assistance. In order to be eligible, you must have a 580 credit score, not have more than $15,000 in liquid assets, and also meet the income limits. The income limits are based on how many people will live in your household. This ranges from $41,950 for 1 person all the way up to $71,900 for 8 people. You can find out more about this program on the Harris County website.
- Houston – The Housing and Community Development Department of Houston offers up to $30,000 in down payment assistance. To learn more about this program, visit the City of Houston website.
- Irving – The process to get down payment assistance in Irving can be lengthy. In fact, the initial review is 4-6 weeks. If you would like to apply for this program, we encourage you to get pre-approved for a home loan as the first step. Then, we can help you submit your application to get assistance. We can help you gather the necessary documents, attend the required homebuyer education class, and all other steps for obtaining assistance. If you would like to learn more about the program and eligibility, visit the city of Irving website.
- Killeen – The City of Killeen offers up to $7,500 in down payment assistance with the Homebuyer Assistance Program (HAP). You can learn more about this program and the requirement on the City of Killeen website.
- Laredo – Laredo provides eligible first time buyers with up to $14,999 in assistance. The income limits are $29,350 for an individual, and up to $55,350 depending on how many people live in your household. It is important to note that you must have lived in Laredo for at least 6 months prior to being eligible for this program. Visit the city of Laredo website for more information.
- Lewisville – Lewisville administers the FHAP (first time homebuyers assistance program). Learn more on about this opportunity in the FHAP fact sheet on the city of Lewisville website.
- Longview – First time home buyers in Longview may be eligible to receive up to $6,500 in down payment assistance. To learn more, visit the City of Longview website.
- McKinney – McKinney provides up to $10,000 in the form of a 5 year interest free loan. The best part of this is that after 5 years, the lien drops and you will no longer be required to pay it back. To learn more about the requirements, visit the City of McKinney website.
- Mesquite – The City of Mesquite offers up to $5,000 in down payment assistance to first time home buyers. You can learn more about this program on the City of Mesquite website.
- Midland – The City of Midland offers up to $15,000 in down payment assistance. You can learn more on the City of Midland website.
- Odessa – First time home buyers in Odessa have an incredible opportunity to buy a home with very little out of pocket costs. This includes 5-10% in down payment assistance (also considered to be principle reduction). Additionally, you can receive $3,500-$4,000 to use for your closing costs. The maximum allowable sales price is $95,000 for an existing home and $120,650 for a newly built home. You can learn more on the city of Odessa website.
- Plano – You can learn about the Plano DPA program here.
- San Angelo – If you are planning on buying a home in San Angelo, you might be able to receive up to $15,000 in assistance. To find out if you can qualify, give us a call, or learn more at the San Angelo DPA website.
- San Antonio – The city of San Antonio has a few down payment assistance programs, which you can learn about on the city of San Antonio website.
- San Marcos – If you are buying your first home, or have not owned a home 3 years prior, you may be able to receive $7,000 to use towards your down payment and closing costs. To find out about the eligibility requirements, visit the city of San Marcos website.
- Texarkana – Borrow up to $10,000 to use towards your down payment and closing costs. Find out more on the city of Texarkana website.
- Texas City – First time home buyers in Texas City may be eligible to receive up to $7,500 in down payment assistance. To find out more about this program, visit the official Texas City website.
- Tyler – Tyler offers one of the best DPA programs in all of Texas. You may qualify for a few different options. This includes $7,500 which can be applied towards the purchase of an existing home. With this option, you will have a 5 year lien. This means that as long as you do not refinance or sell your home within 5 years, the lien will drop off and you will no longer owe on the home. The second possible option is a $14,999 5 year interest free loan, that will also no longer have to be paid back after 5 years. The third option is $25,000 which can be granted towards a HUD Initiatives Home. Find out more on the city of Tyler website.
- Victoria – Victoria offers the Community Development Block Grant. This includes $2,500 which can be used to pay for your home loan closing costs, such as origination fees, an appraisal, and other loan costs. You can find out more about this program on the city of Victoria website.
- Waco – Want to buy a home in Waco? Well, you may be able to receive $15,000 to use for your down payment and loan fees. To qualify, you must meet the income limits, contribute $500 towards the down payment, and you must occupy the residency. Find out more on the city of Waco website.
- Wichita Falls – First time homebuyers in Wichita Falls may be entitled to up to $6,000 in assistance. This is available for those who are in fact buying a home for the very first time, as well as anyone who has not owned a home in the last 3 years. The income limits range from $32,550 to $61,400 depending on how many people live in your home. To find out more, you can review this brochure which provides current details of the opportunity. You can also visit the city of Wichita Falls website to learn more.
Texas First Time Home Buyer Tax Credits
The Mortgage Credit Certification (MCC) tax credit provides you an opportunity to reduce your tax bill, as well as enhance your home loan application by reducing your debt-to-income ratios. How this works, is you can deduct up to $2,000 off your federal tax bill each year. The MCC allows up to 50% of your annual interest to be eliminated (with the cap being at $2,000). Some great news, is this can be used in addition to standard mortgage interest deductions!
Are You Eligible for Down Payment Assistance?
A mortgage specialist can help you check your eligibility for down payment assistance. If you would like to receive some help checking what down payment assistance programs you may be eligible for, fill out this form. We will match you with a mortgage lender that can help you see if you qualify for any down payment assistance.
First Time Home Buyer Questions
Below are some of the most frequently asked questions about first time home buyer loans:
How much do I need for a down payment?
The minimum down payment requirement will depend on the type of mortgage program. USDA and VA loans do not require any down payment. FHA loans only require a 3.5% down payment (and allow down payment assistance to be used). Conventional loans typically require either 3% or 5% down. The minimum down payment for a non-prime loan is usually at least 10% (or higher).
What is the maximum loan amount that I can qualify for?
The amount that you will be allowed to borrow will depend mostly on your income, as well as the particular type of loan you are interested in. There are maximum loan limits for each type of mortgage program which are set at the county level. Conforming loan limits are the maximum loan amounts allowed for conventional mortgages. FHA loans have their own loan limits. This is not necessarily how much you can borrow though, but the maximum amount allowed in your location. The amount that you can personal qualify for will be based upon your income, and how much debt you have. For most loans, your monthly mortgage payment, along with your monthly debts may not exceed 43% of your income.
Can I buy a home without a real estate agent?
It depends on your state and the type of loan program. For some states, you must use an agent. In other states, you are not required to use a real estate agent for many loan program, such as conventional mortgages. However, some loan types require that you use a real estate agent regardless of your location, such as USDA loans.
Are there mortgage loan options for borrowers with bad credit?
Yes, both FHA loans and non-prime loans are available to borrowers with lower credit score, and other credit challenges. The minimum credit score required for an FHA loan is 500. For non-prime loans, there are lenders that allow a borrower to have a credit score even below 500. Non-prime loans also do not have any waiting periods after a bankruptcy.
Can I buy a home if I owe tax debt?
For government-backed loans, such as FHA, VA, and USDA loans, you can buy a home with tax debt as long as you have made a payment plan with the IRS, and are not behind on the payments. Any federal debt must be in good standing in order to get a government-based mortgage. If your tax debts have moved into the status of a tax lien, this will prevent you from getting a home loan until it is resolved.
Can I buy a home if I have student loans?
As long as you are not delinquent on the student loan payments, and the monthly payments do not cause excessive debt-to-income ratios, you can still get a mortgage.
Can I buy a home without my spouse?
A common question is if you can buy a house without your wife or husband. The short answer is yes. There are numerous reasons someone may want to exclude their spouse from a mortgage application, such as lower credit, lack of job history or income, or one spouse having excessive debt that could prevent an approval. You may be able to qualify and get a home loan without your spouse.
How do I find out if I qualify for a mortgage?
A loan representative can help you determine what mortgage programs you may qualify for, and also check your eligibility for down payment assistance. If you would like to receive a free consultation, we can help match you with a mortgage lender that offers first time home buyer loans in Texas.