The Texas State Affordable Housing Corporation (TSAHC) offers down payment assistance through two main programs: a grant of up to 5% of your loan amount that you never repay, and a second lien (deferred-payment loan) at 0% interest that is forgiven after a set period.
These programs are available to first-time and repeat buyers, have flexible credit requirements (580+ for FHA, 620+ for conventional), and can be combined with FHA, VA, USDA, or conventional loans. Income limits vary by program but are generous for most Texas households.
TSAHC Programs Overview
TSAHC was created by the Texas Legislature to help Texans achieve homeownership. They partner with approved lenders throughout the state to offer down payment assistance that makes buying a home more accessible for everyday families.
There are two main DPA products offered through TSAHC:
- Homes for Texas Heroes — Designed specifically for teachers, first responders, corrections officers, veteran firefighters, and other public servants who serve their communities.
- Statewide Program — Open to all qualifying buyers, regardless of profession, as long as you meet income and purchase price limits.
Both programs can be paired with FHA, VA, USDA, or conventional loans, giving you flexibility in how you finance your home.
Grant vs Second Lien — Which Is Better?
TSAHC offers two types of assistance: a grant and a second lien. Understanding the difference is key to choosing the right option.
- Grant (up to 5% of loan amount): Free money that you never repay. No repayment, no strings attached. This is generally the better deal if you qualify.
- Second Lien (0% interest, deferred): A forgivable loan at 0% interest. After you live in the home for a set period (typically 3 to 5 years), the loan is forgiven. If you sell or move before the forgiveness period, you repay a prorated amount.
For most buyers, the grant is the better option because it puts thousands of dollars toward your purchase with no expectation of repayment. The second lien is a solid backup if you do not qualify for the grant or want a smaller amount with forgiveness built in.
Eligibility Requirements
To qualify for TSAHC down payment assistance, you need to meet several requirements:
- Credit Score: 580+ for FHA, VA, and USDA loans; 620+ for conventional loans
- Income: Varies by county and household size. In the San Antonio area, limits typically go up to $100K+ for most households
- Property: Must be your primary residence — no investment properties or second homes
- Buyer Type: Both first-time buyers and repeat buyers qualify
- Education: You must complete a homebuyer education course from a TSAHC-approved provider
- Purchase Price: Limits vary by county. In Bexar County, the limit is typically around $350,000 for most programs
The requirements are designed to be accessible. TSAHC specifically aims to help moderate-income households, so the income limits are set well above the median in most Texas counties.
How to Apply
Applying for TSAHC down payment assistance is straightforward, but it requires working with an approved lender. Here is the step-by-step process:
- Find a TSAHC-approved lender — Not all lenders participate in TSAHC programs. I am approved to originate TSAHC DPA loans for my clients.
- Get pre-approved for your primary mortgage first so you know your price range.
- Apply for TSAHC DPA at the same time you apply for your primary mortgage. Your lender handles both applications.
- Complete homebuyer education through a TSAHC-approved provider. This is a short course that covers the basics of homeownership.
- TSAHC reviews and approves your application. This typically takes a few business days.
- DPA funds are applied at closing directly to your down payment and eligible closing costs.
The entire process is managed by your lender. You do not need to contact TSAHC directly — your loan officer handles the coordination.
TSAHC vs Other Texas DPA Programs
Texas has several down payment assistance options. Here is how TSAHC compares:
| Program | Max Assistance | Forgivable? | Best For |
|---|---|---|---|
| TSAHC Grant | Up to 5% of loan | Yes (never repay) | Most buyers |
| TDHCA (My First Texas Home) | Up to 5% | Forgivable after 3 yrs | First-time buyers |
| City of San Antonio | Up to $22,500 | Forgivable after 5 yrs | San Antonio residents |
| HBA (Home by San Antonio) | Up to $10,000 | Forgivable after 5 yrs | Bexar County buyers |
TSAHC stands out because its grant option gives you money you never have to repay, and it is available to both first-time and repeat buyers across the state. The credit requirements are also more flexible than some local programs.
Real Examples
Let us look at a real scenario to see how TSAHC assistance works in practice.
Example: Teacher buying a $280,000 home with FHA
- Down payment needed (3.5% FHA):$9,800
- TSAHC grant (up to 5% of loan):~$14,000
- Grant covers down payment:Yes
- Remaining grant toward closing costs:~$4,200
- Net out-of-pocket for down payment:Potentially $0
In this scenario, the TSAHC grant not only covers the entire down payment but also leaves thousands of dollars to offset closing costs. The buyer can walk into closing with minimal out-of-pocket expenses.
For a conventional loan with 5% down on a $300,000 home, a TSAHC grant of 5% ($15,000) would cover the entire $15,000 down payment, again leaving the buyer with essentially zero down payment out of pocket.