Texas First-Time Homebuyer Programs 2026: Down Payment Assistance and Grants
Published on 6/11/2026
Texas First-Time Homebuyer Programs 2026: Down Payment Assistance and Grants
Texas has a better set of first-time homebuyer resources than most buyers realize. Between state programs, local assistance, and special loan products, buyers in Leander and the Austin suburbs can access meaningful down payment help — sometimes reducing out-of-pocket cash to almost nothing.
Here's what actually exists and what the real requirements are.
TDHCA: My First Texas Home
The Texas Department of Housing and Community Affairs (TDHCA) runs the flagship state first-time buyer program.
My First Texas Home offers:
- 30-year fixed-rate mortgage through participating lenders
- Down payment assistance of 3%–5% of the loan amount (structured as a second lien, either deferred or forgivable depending on the product)
- Below-market interest rates on the first mortgage
Eligibility:
- First-time buyer (or haven't owned a home in the last 3 years)
- Income limits apply — for Williamson County (Leander/Cedar Park/Round Rock), the 2026 income limits are roughly $97,000–$117,000 depending on household size
- Credit score minimum: 620 (higher scores get better terms)
- Purchase price limits apply — varies by county
Important: "First-time buyer" in most programs means you haven't owned a primary residence in the last 3 years. If you owned a home but sold it 4 years ago, you likely qualify.
Texas Veterans Land Board (VLB): Veterans Housing Assistance Program
For Texas veterans (doesn't require active-duty, just veteran status), the VLB offers some of the most competitive rates in the state.
VLB Veterans Housing Assistance Program:
- Below-market interest rates (typically 0.5%–1% below conventional)
- Minimum 3% down payment
- Maximum loan amount changes annually; check current limits
- Available for primary residence purchases
Combined with VA loan: The VLB program can sometimes be used in conjunction with VA loan benefits for maximum advantage. This is one of the more complicated areas of Texas real estate financing — work with a lender who has done VLB/VA combinations before.
Williamson County / City Programs
City of Round Rock: Round Rock has offered down payment assistance through its Community Development Block Grant (CDBG) funding. Availability changes based on funding cycles. Contact the City of Round Rock Community Development directly.
Williamson County: Limited direct homebuyer assistance, but some down payment programs run through local nonprofit housing organizations. Ask your lender about county-specific options.
USDA Loans: Rural Development
Parts of the Leander and Georgetown areas outside city limits may qualify for USDA Rural Development loans — one of the only true zero-down-payment mortgage options available.
USDA features:
- Zero down payment
- Below-market mortgage insurance (lower than FHA)
- Income limits apply (roughly $110K–$145K for most Texas households)
- Property must be in an eligible rural or suburban area
USDA eligibility in the Austin area: Georgetown proper and areas around it have had USDA-eligible addresses. Leander proper typically does not qualify due to population. Check the USDA property eligibility map at eligibility.sc.egov.usda.gov.
FHA Loans: Low Down Payment, Flexible Credit
FHA isn't a grant program, but it's the most used first-time buyer loan product:
- 3.5% down payment with a 580+ credit score
- 10% down payment with a 500–579 credit score
- More flexible debt-to-income ratio requirements than conventional
Drawback: FHA requires mortgage insurance for the life of the loan (unless you put 10%+ down and wait 11 years). On a $400K loan, FHA MIP adds roughly $200–$250/month.
For buyers who can put 5% down with a 620+ credit score, a conventional loan with PMI typically beats FHA total cost — the PMI cancels at 20% equity.
Conventional 3% Down (Fannie Mae/Freddie Mac)
Fannie Mae's HomeReady and Freddie Mac's Home Possible programs allow 3% down on conventional loans with PMI:
- Credit score minimum: 620–640
- Income limits apply for HomeReady/Home Possible (up to 80% of area median income, which in Williamson County is roughly $70K–$80K)
- PMI cancels at 80% LTV (when you reach 20% equity)
- Lower mortgage insurance than FHA for buyers with 680+ credit scores
For first-time buyers with decent credit and income above TDHCA limits, 3% down conventional is often the best math.
Builder-Specific Incentives: Often Better Than You Think
In Leander's new construction market, builder incentives can function as an alternative to formal assistance programs:
- Rate buydowns of 1.5–2 points reduce your effective interest rate below market
- Closing cost credits of $5K–$20K reduce cash to close
- Design center credits that reduce what you'd otherwise pay for upgrades
A buyer using a builder's closing cost credit of $12,000 and a 1.5-point buydown is getting real money — potentially more valuable than a TDHCA grant in some scenarios. The caveat: you typically have to use the builder's preferred lender to access these incentives.
How to Stack Benefits
The best outcomes come from combining programs:
Example 1: VA buyer + VLB + builder incentive
- VA loan (zero down, no PMI)
- VLB rate reduction
- Builder closing cost credit ($10K–$15K)
- Total cash to close: potentially under $3,000 on a $450K home
Example 2: TDHCA DPA + FHA
- FHA first mortgage
- TDHCA 4% DPA second lien (deferred)
- Down payment effectively covered by DPA
- Closing costs still required out-of-pocket
Example 3: Conventional + TDHCA + builder
- TDHCA first mortgage at below-market rate
- 3% DPA from TDHCA
- Builder closing cost credit
- Stacking all three can bring cash to close below $5K
Stacking multiple programs has eligibility compatibility constraints. Work with a lender who knows Texas-specific program combinations — not all national lenders do.
What to Do First
- Check your credit score — the difference between 619 and 620 is program access. Clean up any errors first.
- Get pre-approved with a Texas lender who knows TDHCA, VLB, and FHA products.
- Ask specifically about TDHCA and VLB (if a veteran) — not every lender volunteers this information.
- Don't assume you don't qualify — income limits and "first-time buyer" definitions are more flexible than most buyers assume.
Ready to Buy in Leander or Cedar Park?
Work With a Local Expert
I'm Joe Sanches — a licensed Realtor in Leander. I work with first-time buyers and can connect you with lenders who know the Texas programs. Knowing your loan options shapes which homes make sense for your budget.
Call or text: 512-663-8867
Email: hello@joefsanches.com
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