Buying your first home in Texas can feel like a major financial hurdle, especially when you start adding up the down payment, closing costs, property taxes, insurance, inspections, and other expenses associated with purchasing a home.
But here’s something many first-time buyers don’t realize:
You may not need 20% down to buy a home in Texas.
Qualified Texas buyers may have access to mortgage programs, down payment assistance, closing-cost assistance, and other resources designed to make homeownership more attainable.
Some programs may even be available to people who have owned a home before.
Whether you’re looking for your first home in Dallas-Fort Worth, Houston, Austin, San Antonio, or another Texas community, understanding your options before you start shopping can make a significant difference.
This guide explains the major Texas first-time home buyer programs, how down payment assistance works, which mortgage options may be available, and what you should do before applying.
What Is Considered a First-Time Home Buyer in Texas?
One of the biggest misconceptions is that a first-time home buyer must be someone who has never owned a home before.
That’s not always the case.
For many programs, a first-time buyer may be someone who hasn’t owned a principal residence during a specified period, commonly the previous 3 years.
Individual programs establish their own eligibility requirements, so the definition can vary.
That means someone who owned a home several years ago, sold it, and has been renting since may potentially qualify as a first-time buyer under certain programs.
This is why it’s worth investigating your options rather than assuming you don’t qualify.
How Much Money Do You Actually Need to Buy a Home in Texas?
You don’t necessarily need a 20% down payment.
Depending on your qualifications and loan program, minimum down payments can potentially look more like:
| Loan Type | Potential Minimum Down Payment |
|---|---|
| Conventional | As low as 3% |
| FHA | 3.5% |
| VA | 0% for eligible borrowers |
| USDA | 0% for eligible borrowers/properties |
The down payment, however, is only one part of the money needed to purchase a home.
Buyers should also prepare for potential expenses such as:
- Earnest money
- Option fee
- Home inspection
- Appraisal
- Closing costs
- Homeowners insurance
- Moving expenses
- Utility deposits
- Initial repairs
- Cash reserves
This is why I encourage buyers to establish a complete home-buying budget, not simply save for a down payment.
Our guide explaining why mortgage pre-approval is one of the most important steps in buying a home is a great place to start before touring properties.
Texas First-Time Home Buyer Assistance Programs
Texas has several programs designed to help eligible buyers overcome one of the biggest barriers to homeownership: the amount of cash needed upfront.
Two of the most important organizations Texas buyers should know are the Texas State Affordable Housing Corporation (TSAHC) and the Texas Department of Housing and Community Affairs (TDHCA).
1. Texas State Affordable Housing Corporation (TSAHC)
The Texas State Affordable Housing Corporation administers homeownership programs that may help eligible Texas buyers with mortgage financing and down payment assistance.
TSAHC administers programs including Homes for Texas Heroes and the Home Sweet Texas Home Loan Program.
Homes for Texas Heroes
The Homes for Texas Heroes Home Loan Program is designed to help eligible Texans in certain professions purchase homes.
Depending on current program requirements, eligible professions may include certain:
- Teachers
- Police officers
- Firefighters
- EMS personnel
- Correctional officers
- Veterans
Eligibility, income limits, assistance amounts, and program requirements can change, so always review the current TSAHC requirements before relying on a particular benefit.
Home Sweet Texas Home Loan Program
TSAHC’s Home Sweet Texas Home Loan Program provides eligible Texas homebuyers access to mortgage financing and potential down payment assistance.
One particularly important point:
Not every TSAHC program is limited exclusively to first-time home buyers.
If you’ve owned a home previously, don’t automatically assume you aren’t eligible.
2. Texas Department of Housing and Community Affairs (TDHCA)
The Texas Department of Housing and Community Affairs also administers homebuyer programs for eligible Texans.
TDHCA homeownership resources may include programs providing access to mortgage financing and down payment or closing-cost assistance.
Program requirements can include:
- Income limits
- Purchase-price limits
- Credit requirements
- Property requirements
- Occupancy requirements
- Homebuyer education
Because funding, rates, and program requirements can change, buyers should verify current information directly through TDHCA and an approved participating lender.
3. FHA Loans for First-Time Home Buyers
FHA financing is one of the most recognizable mortgage options among first-time homebuyers.
The Federal Housing Administration insures FHA mortgages offered through approved lenders.
Potential FHA advantages can include:
- Down payments as low as 3.5% for qualifying borrowers
- More flexible credit requirements than some conventional programs
- Potential flexibility with debt-to-income ratios
- Compatibility with certain approved assistance programs
But there’s an important distinction:
FHA loans are not first-time home buyer loans.
Repeat buyers can potentially qualify for FHA financing too.
One major consideration is mortgage insurance. FHA borrowers generally pay mortgage insurance premiums, which affect both the upfront and long-term cost of the mortgage.
That’s why the best loan isn’t necessarily the loan requiring the smallest down payment.
You want to compare the complete monthly payment and long-term cost.
4. Conventional Loans With Low Down Payments
Another misconception is that conventional financing always requires 20% down.
It doesn’t.
Qualified borrowers may have access to conventional mortgage programs requiring substantially less.
Two programs worth understanding are:
Certain conventional programs can permit down payments as low as approximately 3% for qualified borrowers.
Conventional financing can also have advantages regarding mortgage insurance because private mortgage insurance may potentially be removed after applicable requirements are satisfied.
Your credit profile, income, debt, property type, down payment, and other factors affect eligibility and pricing.
5. VA Loans
For eligible veterans, active-duty service members, and certain surviving spouses, VA financing can be one of the strongest homeownership tools available.
The U.S. Department of Veterans Affairs VA Home Loan Program provides information about eligibility and available benefits.
Potential VA advantages include:
- 0% down payment for eligible borrowers
- No monthly private mortgage insurance
- Competitive interest rates
- Flexible underwriting characteristics
VA eligibility doesn’t automatically mean every property or financial situation qualifies.
But eligible buyers should absolutely investigate VA financing before automatically choosing another mortgage product.
6. USDA Loans
USDA financing is another mortgage option that can potentially provide 0% down financing for eligible borrowers purchasing qualifying properties.
The USDA Single Family Housing Guaranteed Loan Program is designed to support eligible homebuyers purchasing in qualifying areas.
Despite the name, USDA financing isn’t limited exclusively to remote farmland.
Some suburban and developing communities outside major Texas metropolitan areas may qualify.
Eligibility can depend on:
- Property location
- Household income
- Borrower qualifications
- Property requirements
Buyers can also use the USDA Property Eligibility tool to investigate whether an area may qualify.
7. Local Texas Down Payment Assistance Programs
Statewide programs aren’t your only option.
Some Texas cities, counties, housing authorities, and nonprofit organizations offer local homebuyer assistance programs.
Depending on where you’re buying, programs may potentially exist in or around:
- Dallas
- Fort Worth
- Houston
- Harris County
- Austin
- San Antonio
- Other Texas municipalities
Local programs can have very specific:
- Income limits
- Geographic boundaries
- Purchase-price limits
- Homebuyer education requirements
- Occupancy requirements
- Funding limitations
Funding may also be limited or offered periodically.
That’s why your exact property location matters when evaluating assistance.
For a broader look at these options, read our guide to Texas down payment assistance programs.
How Does Down Payment Assistance Work?
Down payment assistance isn’t always simply “free money.”
Different programs structure assistance differently.
Grants
Some programs may provide assistance that doesn’t have to be repaid when all applicable program requirements are satisfied.
Forgivable Second Mortgages
Assistance may be structured as a second lien that can potentially be forgiven after you’ve occupied the property for a specified period and satisfied program requirements.
Deferred-Payment Loans
Some assistance doesn’t require regular monthly payments but becomes repayable when certain events occur, potentially including:
- Selling the home
- Refinancing
- Paying off the first mortgage
- Moving out of the property
Repayable Second Mortgages
Other programs provide assistance through a second mortgage that must be repaid according to the program’s terms.
Never assume “down payment assistance” automatically means free money.
Ask exactly how the assistance is structured before committing to a program.
Is Down Payment Assistance Actually Free?
Sometimes.
Sometimes not.
This is one of the most important conversations to have with your lender.
Ask:
- Is the assistance a grant?
- Is there a second lien?
- Is it forgivable?
- How long must I own and occupy the home?
- What happens if I sell?
- What happens if I refinance?
- Does the assistance affect my mortgage rate?
- Are there additional fees?
- What happens if I move?
A program providing thousands of dollars upfront may still have long-term financial implications.
Compare the entire financing structure, not simply the amount of assistance offered.
What Credit Score Do First-Time Home Buyers Need?
There isn’t one universal minimum credit score for purchasing a home.
Credit requirements can depend on:
- Mortgage program
- Lender
- Down payment
- Debt-to-income ratio
- Credit history
- Available reserves
- Assistance program
A lower credit score doesn’t automatically mean homeownership is impossible.
However, improving your credit before applying may potentially provide:
- Better interest rates
- Lower mortgage insurance costs
- More loan choices
- Better overall terms
The earlier you review your financial position, the more time you have to address potential issues before finding a home you love.
Get Pre-Approved Before Shopping
Before touring homes, one of the most valuable things you can do is determine what financing actually looks like for your situation.
A mortgage pre-approval can help establish:
- Estimated purchasing power
- Loan options
- Down payment requirements
- Potential assistance programs
- Estimated interest rate
- Approximate monthly payment
- Estimated cash needed for closing
Our guide explaining why mortgage pre-approval is one of the most important steps in buying a home walks through the process in greater detail.
Most importantly, don’t shop solely based on the maximum amount you’re approved to borrow.
Your maximum approval isn’t necessarily your ideal budget.
Your Monthly Payment Matters More Than the Purchase Price
First-time buyers understandably focus on purchase price.
But 2 homes priced at $350,000 can potentially have very different monthly payments.
Why?
Because your payment can be affected by:
- Interest rate
- Property taxes
- Homeowners insurance
- Mortgage insurance
- HOA dues
- MUD or PID-related costs
- Flood insurance
- Loan program
This is particularly important in Texas because property tax rates can vary considerably between communities.
A less expensive house with significantly higher taxes isn’t automatically the more affordable home.
Our complete guide to buying a home in Texas provides a broader look at how financing, taxes, insurance, inspections, and other expenses fit together throughout the purchase process.
Understand Texas Property Taxes Before You Buy
Property taxes are one of the largest recurring expenses Texas homeowners face.
Before making an offer, review the estimated taxes associated with the property and understand how exemptions may affect future taxable value.
Houston-area homeowners can read our step-by-step guide to filing a property tax protest in Harris County, Texas.
Dallas County homeowners should also review our Dallas County property tax protest guide when evaluating their annual appraisal.
Property taxes can have a significant impact on affordability, so understanding them before purchasing can help prevent a major payment surprise later.
First-Time Buyers Should Understand Their Mortgage Options
Don’t assume FHA is automatically the best mortgage simply because you’re buying your first home.
Depending on your circumstances, you might compare:
- Conventional
- FHA
- VA
- USDA
- Fixed-rate financing
- Adjustable-rate financing
- Assistance-program financing
Our guide to the different types of mortgage loans can help you understand the basic differences between these financing options.
If you’re considering an adjustable-rate loan, our guide to adjustable-rate mortgages in Texas explains how ARMs work and when their potential advantages and risks may matter.
The objective isn’t finding the loan with the most attractive advertisement.
It’s finding the financing strategy that fits your finances and long-term plans.
Don’t Forget Utilities When Building Your Budget
Your mortgage isn’t your only monthly bill.
First-time homeowners may be surprised by the cost of:
- Electricity
- Water
- Natural gas
- Internet
- Trash service
- Lawn care
- Pest control
- Routine maintenance
Electricity is especially important in Texas.
If you’re buying within a deregulated electricity market, you may have the ability to choose your retail electricity provider.
When comparing providers, look beyond the advertised rate and evaluate your expected usage, Electricity Facts Label, contract length, delivery charges, and early termination provisions.
If Ambit is available for your new home, you can review Competitive Rates & Friendly Service to explore available service options.
New Construction Can Create Additional Opportunities
First-time buyers shouldn’t automatically exclude new construction.
Depending on the market and builder, incentives can potentially include:
- Closing-cost assistance
- Interest-rate buydowns
- Appliance packages
- Upgrade incentives
- Reduced pricing on inventory homes
- Preferred-lender incentives
In certain circumstances, a new-construction home with strong builder incentives may create a better financial package than a less expensive resale home.
But remember:
The builder’s sales representative represents the builder.
Having your own representation can help you evaluate:
- Builder incentives
- Financing
- Comparable properties
- Contract terms
- Inspections
- Upgrade pricing
- Closing costs
- Long-term value
Do First-Time Buyers Need a REALTOR®?
Buying your first home involves far more than finding listings online.
Professional buyer representation can help with:
- Establishing a search strategy
- Evaluating neighborhoods
- Reviewing comparable sales
- Understanding market value
- Builder negotiations
- Preparing offers
- Contract deadlines
- Inspections
- Repair negotiations
- Appraisals
- Title
- Financing coordination
- Closing
At Kory White Real Estate Group, our approach is education first, strategy second, and advocacy throughout the transaction.
We want our clients to understand not only what they’re signing, but why each decision matters.
If you’re considering buying your first home, schedule a 15-minute consultation with Kory White before you start touring properties. We can talk through your timeline, preferred areas, budget, financing, and the next steps that make sense for you.
A Simple Texas First-Time Home Buyer Roadmap
1. Have an Initial Buyer Consultation
Discuss your goals, timeline, preferred locations, budget, and concerns.
2. Get Pre-Approved
Determine your financing options and whether assistance programs may apply.
3. Establish Your Comfortable Monthly Payment
Don’t simply use your maximum approval.
4. Identify Potential Assistance Programs
Evaluate TSAHC programs, TDHCA resources, local assistance programs, and applicable mortgage options.
5. Choose Your Target Areas
Consider commute, property taxes, schools, lifestyle, property type, insurance, and long-term goals.
6. Start Touring Homes
Compare properties based on the complete financial picture.
7. Prepare an Offer
Evaluate price, comparable sales, financing, closing costs, and other negotiated terms.
8. Complete Inspections and Due Diligence
Understand exactly what you’re buying.
9. Complete Financing and Appraisal
Work closely with your lender as underwriting progresses.
10. Close and Become a Homeowner
Review your final numbers, sign your closing documents, establish utilities, and get the keys.
Frequently Asked Questions About Texas First-Time Home Buyer Programs
Do first-time home buyers get money from the State of Texas?
Some eligible buyers may qualify for state or local programs providing down payment or closing-cost assistance.
Start by reviewing current programs through the Texas State Affordable Housing Corporation and Texas Department of Housing and Community Affairs.
The amount and structure of assistance depend on the program and current availability.
Can I buy a home in Texas with no down payment?
Potentially.
Eligible borrowers may qualify for VA home loan benefits or qualifying USDA home financing, both of which can provide 0%-down financing under applicable program requirements.
Can I buy a home with 3% down?
Certain conventional mortgage programs may allow qualified borrowers to purchase with as little as 3% down.
Programs worth discussing with your lender include Fannie Mae HomeReady and Freddie Mac Home Possible.
Can I use down payment assistance with an FHA loan?
Certain assistance programs may be compatible with FHA financing when program and lender requirements are satisfied.
Your lender should verify compatibility before you rely on assistance as part of your purchase strategy.
Do I need perfect credit?
No.
Different mortgage programs and lenders have different credit requirements.
However, stronger credit can potentially improve your financing options and reduce borrowing costs.
Can I qualify if I’ve owned a home before?
Possibly.
Some programs define a first-time buyer based on whether you’ve owned a principal residence during a specified period rather than whether you’ve ever owned property.
Other assistance programs may not require first-time buyer status at all.
This is why buyers should check the actual program requirements instead of eliminating themselves based on assumptions.
Should I use all of my savings for the down payment?
Consider the importance of maintaining cash reserves.
Homeownership introduces expenses you may not have had as a renter.
Having money available after closing can help cover:
- Repairs
- Moving expenses
- Furnishings
- Maintenance
- Insurance deductibles
- Unexpected expenses
Putting every available dollar into the down payment can leave you financially vulnerable immediately after purchasing the home.
The Bottom Line
Buying your first home in Texas may be more attainable than you think.
You may not need 20% down.
You may not need perfect credit.
You may have access to state or local assistance.
And you shouldn’t assume you don’t qualify simply because you’ve owned a home before.
The first step isn’t scrolling through houses.
It’s understanding your finances, available mortgage programs, potential assistance, and what monthly payment actually fits your life.
Start by reviewing mortgage pre-approval in Texas, comparing the different types of mortgage loans, and investigating current programs through TSAHC and TDHCA.
At Kory White Real Estate Group, we help first-time buyers understand the complete picture before making one of the largest financial decisions of their lives.
That means looking beyond the listing price and helping you understand financing, assistance programs, property taxes, insurance, inspections, utilities, neighborhoods, builder incentives, and the long-term implications of your purchase.
If you’re considering buying your first home in Dallas-Fort Worth, Houston, Austin, San Antonio, or another Texas community, schedule a 15-minute consultation with Kory White and let’s figure out what your path to homeownership could look like.
About Kory White Real Estate Group
Kory White Real Estate Group helps first-time buyers, repeat buyers, sellers, investors, and relocating families navigate real estate throughout Texas.
Our approach is built around education, strategy, and advocacy.
We don’t believe buyers should be pressured into purchasing a home simply because they’re approved.
Instead, we help clients evaluate the financing, payment, location, property, condition, incentives, taxes, and long-term fit so they can make informed decisions with confidence.
If you’re ready to explore homeownership, schedule a 15-minute consultation with Kory White.
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