Quick Answer
Yes, you can use down payment assistance with an FHA loan in Texas. In fact, most Texas DPA programs include their own FHA first mortgage bundled with the assistance. You do not apply for the FHA loan and DPA separately. Programs like TSAHC Home Sweet Texas, TDHCA My First Texas Home, SETH 5 Star, and Chenoa Fund all offer 3.5% to 5% in grants or forgivable loans. Several large cities also offer programs worth $30,000 to $60,000.
Who This Guide Is For
This guide is for anyone buying a home in Texas who wants to use an FHA loan and needs help with the down payment. That includes first-time buyers who have not saved enough for 3.5% down, repeat buyers who want to preserve cash, veterans and active military looking at FHA instead of VA, teachers, nurses, and first responders who qualify for profession-specific programs, and anyone who has been told they "make too much" for assistance and wants to see what is actually available.
If you are comparing FHA vs. conventional, or trying to decide between statewide and local programs, this guide will help you sort through the options.
How FHA + DPA Works in Texas
Here is the single most important thing to understand about Texas DPA: most programs include their own FHA first mortgage. You do not go get an FHA loan from one place and then apply for DPA from another. Instead, you apply through the DPA program, and it provides both the FHA loan and the assistance as a package.
This is different from how some other states work. In Texas, TSAHC, TDHCA, and SETH all operate this way. They contract with approved lenders who originate FHA loans under the program's guidelines. Your lender handles everything, but they must be approved by whichever program you choose.
You choose a program and find an approved lender
Your lender must be approved by the specific program. Not every lender can originate TSAHC or TDHCA loans.
The program provides your FHA first mortgage
The interest rate is set by the program, not the open market. Rates may be slightly above market, which is how some programs fund the assistance.
DPA is layered on top as a grant or second lien
The assistance (typically 5% of the loan amount) comes as a grant, forgivable loan, or deferred loan depending on the program.
You close on both at the same time
There is one closing. The FHA loan and DPA are finalized together. Your out-of-pocket cost at closing can be as low as $0 if the assistance covers both down payment and closing costs.
The Math: FHA + DPA on a $300,000 Home in Texas
Purchase price: $300,000
FHA down payment (3.5%): $10,500
DPA assistance (5% of loan): $14,475
Result: Your entire down payment is covered, plus roughly $4,000 toward closing costs.
Texas DPA Programs That Pair with FHA: Side-by-Side
This table covers the major statewide and national programs available in Texas. Local city programs are listed separately below.
| Program | Amount | Type | Credit | 1st-Time? | Key Restriction |
|---|---|---|---|---|---|
| TSAHC Home Sweet Texas | 5% grant | Grant (no repayment) | 620 | No | Income limits apply |
| TSAHC Homes for TX Heroes | 5% grant | Grant (no repayment) | 620 | No | Must be vet/teacher/nurse/first responder |
| TDHCA My First Texas Home | 5% | Deferred or 3-yr forgivable | 620 | Yes* | *Veterans exempt from first-time req |
| TDHCA My Choice TX Home | 5% | Deferred or 3-yr forgivable | 620 | No | Income limits apply |
| SETH 5 Star | 5% | Grant or forgivable | 640 | No | Excludes Travis Co. and El Paso |
| Chenoa Fund | 3.5% | Forgivable (36 payments) | 580 | No | No income limits |
Statewide Program Details
1. TSAHC Home Sweet Texas Program
Best for: Buyers who want the simplest, most generous structure. The 5% grant requires no repayment under any circumstances. You keep the money whether you sell in 3 years or 30 years. The program does not require first-time buyer status, making it accessible to repeat buyers as well. TSAHC is one of the most established housing finance agencies in Texas.
2. TSAHC Homes for Texas Heroes
Best for: Veterans, active military, teachers (including aides and counselors), police, firefighters, EMS, corrections officers, and nurses. This program uses the same 5% grant structure as Home Sweet Texas, but is reserved for qualifying professions. If you are eligible, the rate may be slightly better than the general program. This is one of the most popular DPA programs in Texas for a reason.
3. TDHCA My First Texas Home
Best for: First-time buyers (or veterans) who want the choice between a deferred loan and a forgivable option. The deferred version carries no monthly payments and is only repaid when you sell, refinance, or pay off the first mortgage. The forgivable version is completely forgiven after 3 years of continuous occupancy. If you plan to stay in the home at least 3 years, the forgivable option is the better deal.
4. TDHCA My Choice Texas Home
Best for: Repeat buyers who want the same TDHCA structure without the first-time buyer restriction. My Choice Texas Home mirrors the My First Texas Home program in every way except that ownership history does not matter. If you have owned a home before and want a TDHCA loan, this is your path.
5. SETH 5 Star Texas Advantage Program
Best for: Buyers in Houston, Dallas-Fort Worth, San Antonio, and most other Texas metros (outside Austin and El Paso). SETH is administered by the Southeast Texas Housing Finance Corporation and covers most of the state. The 640 credit floor is slightly higher than TSAHC and TDHCA, but the grant option and competitive rates make it a strong choice. If you are buying in Travis County or El Paso, you will need to use a different program.
6. Chenoa Fund DPA
Best for: Buyers with credit scores between 580 and 619 who do not qualify for the state programs. Also a strong option for higher-income buyers who exceed TSAHC or TDHCA income limits, since Chenoa Fund has no income cap. The 3.5% covers the exact FHA minimum down payment, and the loan is forgiven after 36 on-time payments. Read our full Chenoa Fund Texas guide for more details.
Eligibility Overview
Every program has its own requirements, but here are the common eligibility factors across Texas FHA DPA programs.
Credit Score
FHA itself requires 580 for 3.5% down (or 500 for 10% down). But DPA program minimums are higher: 580 for Chenoa Fund, 620 for TSAHC and TDHCA, 640 for SETH. The DPA program's floor is the one that matters.
Income Limits
TSAHC and TDHCA have county-specific income limits that vary by household size. SETH also has income limits. Chenoa Fund has no income limits at all. Check the specific program for your county's cap.
Purchase Price / Loan Limits
The FHA loan limit in most Texas counties is $472,030. High-cost areas go up to $541,287 (Travis County). State DPA programs may also have their own purchase price caps, which sometimes differ from FHA limits.
Occupancy
All programs require the home to be your primary residence. Investment properties and second homes do not qualify. You must live in the home within 60 days of closing (typically).
Homebuyer Education
Most programs require completion of a HUD-approved homebuyer education course. These are available online and typically take a few hours. Your lender can point you to an approved provider.
Local City Programs Worth Knowing
Texas has some of the largest local DPA programs in the country. These are city-funded and can offer significantly more than the statewide programs. Some can even be combined with a statewide program.
Houston's Homebuyer Assistance Program provides up to $50,000 for down payment and closing costs. Deferred, forgivable loan. Income limits apply. One of the most valuable city programs in the state.
The Dallas Homebuyer Assistance Program offers $50,000 to $60,000 depending on household size and area. Forgivable after a compliance period. Check current funding status before applying.
Austin offers up to $40,000 in down payment and closing cost assistance. Important for Austin buyers because SETH 5 Star excludes Travis County, so local programs and TSAHC/TDHCA are your main options.
San Antonio HIP
Up to $30,000San Antonio's Homeownership Incentive Program provides up to $30,000 for down payment and closing costs. Check with the city's Neighborhood and Housing Services Department for current availability.
Common Mistakes to Avoid
Trying to get an FHA loan first, then finding DPA
In Texas, the DPA program provides the FHA loan. If you get pre-approved with a random lender, they may not be approved for the DPA program you want. Start with the program, then find an approved lender.
Assuming you make too much money to qualify
Income limits in Texas are higher than most people expect, especially for larger households. And Chenoa Fund has no income limits at all. Check your actual eligibility before ruling yourself out.
Not comparing the mortgage rate
DPA programs bundle their own FHA mortgage, and the rate may be higher than market. A 5% grant at a slightly higher rate might cost more over 30 years than no grant at a lower rate. Ask your lender to run both scenarios.
Skipping the MCC tax credit
Both TSAHC and TDHCA offer a Mortgage Credit Certificate that saves you up to $2,000 per year in federal taxes for the life of your loan. This is separate from the DPA and can be combined with it. Many buyers do not know it exists.
Not checking local programs alongside statewide ones
Houston, Dallas, Austin, and San Antonio all have local programs worth $30,000 to $60,000. These dwarf the 5% statewide grants on lower-priced homes. Some can even be stacked with a statewide program.
Frequently Asked Questions
Can you use down payment assistance with an FHA loan in Texas?
Yes. Most Texas DPA programs are designed specifically to pair with FHA loans. Programs like TSAHC Home Sweet Texas, TDHCA My First Texas Home, SETH 5 Star, and Chenoa Fund all provide FHA-compatible assistance. In Texas, most DPA programs bundle their own FHA first mortgage with the down payment assistance, so you get both through one program.
How much down payment assistance can I get with an FHA loan in Texas?
Most statewide programs offer 5% of the loan amount as a grant or forgivable loan. Local city programs can provide significantly more: Houston offers up to $50,000, Dallas offers $50,000 to $60,000, Austin offers up to $40,000, and San Antonio offers up to $30,000. FHA loans require only 3.5% down, so the 5% statewide programs cover the full down payment with room left for closing costs.
What credit score do I need for FHA down payment assistance in Texas?
Credit requirements vary by program. Chenoa Fund accepts scores as low as 580. TSAHC Home Sweet Texas and TDHCA My First Texas Home require 620. SETH 5 Star requires 640. The DPA program's credit requirement is usually the binding constraint, since most set their floors above FHA's minimum of 580.
Do I have to be a first-time homebuyer for Texas DPA?
Not always. TSAHC Home Sweet Texas and TDHCA My Choice Texas Home do not require first-time buyer status. TDHCA My First Texas Home does require it, but veterans are exempt. Chenoa Fund also has no first-time buyer requirement. TSAHC Homes for Texas Heroes is open to qualifying professionals regardless of ownership history.
Do I apply for the FHA loan and DPA separately in Texas?
No. This is a common misconception. In Texas, most DPA programs include their own FHA first mortgage. You apply through one program and get both the FHA loan and the down payment assistance together. Your lender must be approved by the specific program you are using.
Can I get a mortgage tax credit with FHA DPA in Texas?
Yes. Texas offers a Mortgage Credit Certificate (MCC) that provides a federal tax credit of up to $2,000 per year for the life of your loan. Both TSAHC and TDHCA offer MCCs that can be combined with their DPA programs, giving you both upfront assistance and ongoing annual tax savings.
What are the FHA loan limits in Texas for 2026?
The FHA loan limit in most Texas counties is $472,030 for a single-family home. High-cost areas have higher limits, with Travis County (Austin) at $541,287. Your DPA assistance is calculated as a percentage of the loan amount, so a higher loan limit means more potential assistance dollars.
Which Texas DPA programs offer grants vs. loans?
TSAHC Home Sweet Texas and Homes for Texas Heroes both offer 5% as a true grant. SETH 5 Star offers both grant and forgivable loan options. Chenoa Fund offers a forgivable loan forgiven after 36 on-time payments. TDHCA programs offer either a deferred loan or a 3-year forgivable loan. Grants and forgivable loans are the best value since you keep the money if you stay in the home.
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