Texas First-Time Home Buyer Programs: How Dallas Buyers Qualify

What first-time home buyer programs are available in Dallas, Texas?

Texas offers several first-time home buyer programs that can significantly reduce upfront costs. The Dallas Homebuyer Assistance Program (DHAP) provides up to $60,000 in the city of Dallas. TSAHC offers 3-5% down payment grants that do not need to be repaid. TDHCA's My First Texas Home delivers up to 5% in assistance that can be stacked with a federal Mortgage Credit Certificate worth up to 15% of your annual mortgage interest every year. In the current DFW buyer's market, combining these programs with seller concessions can reduce out-of-pocket costs to near zero.

By Paul Blair | June 22, 2026

Most Dallas buyers who reach out to me assume they need 10% or 20% down to buy a home here. The reality is very different.

Texas has three layers of buyer assistance that most people never hear about from their bank. The City of Dallas has its own program. The state has two separate programs. And all of them can be stacked with seller concessions in the current buyer's market.

If you're buying your first home in Dallas, or you haven't owned a primary residence in the past three years, here's what you need to know.

The Big Three Programs

Dallas Homebuyer Assistance Program (DHAP)

DHAP is the city's own program, and it's the most generous one available if you qualify.

As of May 2026, BCL of Texas (Business and Community Lenders of Texas) administers the program on the city's behalf. Here's what it offers:

• Up to $60,000 for homes in designated High Opportunity census tracts
• Up to $50,000 for homes in all other eligible Dallas areas
• A zero-interest second lien forgiven over a required affordability period
• Funds can cover down payment, closing costs, or principal reduction

The income limit is 80% or below of the Dallas County Area Median Income for your household size. A household of two can earn up to roughly $75,000 and still qualify.

There's also a Targeted Occupations version of DHAP for teachers, healthcare workers, and protective service employees.

The catch: you must purchase within the city limits of Dallas, and you need to work with an approved lender who participates in the program.

TSAHC: Texas State Affordable Housing Corporation

TSAHC has two programs, and the word "grant" matters here because these funds do not need to be repaid.

Homes for Texas Heroes targets specific occupations:

• Teachers and school employees
• Firefighters and EMS
• Law enforcement
• Veterans and active military
• Correctional officers

The grant is 3% to 5% of the loan amount. On a $400,000 home with a $380,000 loan, 5% comes to $19,000, and it's yours to keep.

Home Sweet Texas is the same program structure for buyers who don't qualify under Heroes. Same grant amount, same terms, broader audience.

For both programs, you need a minimum credit score of 620. Income limits apply and vary by county.

TDHCA: My First Texas Home

My First Texas Home, run by the Texas Department of Housing and Community Affairs, offers up to 5% of the loan amount for down payment and closing costs. This assistance is structured as a zero-interest second mortgage forgiven over a 3-year period. Stay in the home for three years and you owe nothing.

The stacking feature is what sets this one apart. You can combine My First Texas Home with the Texas Mortgage Credit Certificate (MCC), a federal tax credit worth up to 15% of the mortgage interest you pay every year for as long as you have the loan. On a $350,000 mortgage at 6.5%, that returns roughly $2,000 per year in federal tax credits, year after year.

Income limits for the DFW area in 2026 run approximately $97,000 to $120,000 for a household of one or two people. Purchase price limits apply, generally up to around $472,030 in most DFW counties. The credit score minimum is 640 for FHA, VA, and USDA loans.

TDHCA defines "first-time home buyer" as someone who hasn't owned a primary residence in the past three years. Veterans are exempt from this requirement entirely.

How to Qualify

The process is similar across all three programs:

1. Meet the income limit for your county and household size
2. Hit the credit score floor -- 620 for TSAHC, 640 for TDHCA, income-based for DHAP
3. Complete a homebuyer education course -- all three programs require it (typically 6-8 hours, done online)
4. Work with an approved lender -- not every lender participates. Ask specifically about DPA experience before you start an application.
5. Buy a qualifying property -- single-family homes, townhomes, and condos generally qualify. Investment properties and second homes do not.

What the Stack Looks Like in 2026

Here's the part most buyers don't hear until it's too late.

Dallas is a buyer's market right now. About 49.3% of closed DFW sales include seller concessions, meaning sellers are contributing toward closing costs, rate buydowns, or repairs in nearly half of all transactions. If you're not familiar with how those concessions work, I covered them in detail in Seller Concessions in Dallas: Closing Cost Credits and Rate Buydowns Explained for 2026.

On a $380,000 home, a stacked structure might look like this:

• Down payment: covered by TSAHC grant ($14,000-$19,000)
• Closing costs: covered by seller concession ($8,000-$12,000 credit) -- see what Dallas buyers actually pay at closing
• MCC tax credit: roughly $1,800-$2,200 per year back on federal taxes for the life of the loan

Your out-of-pocket cost before reserves? Potentially near zero.

The rent vs. buy calculation in DFW already favors buyers in most scenarios in 2026. Programs like these shift that math further.

FHA Loans and DFW Limits

Most Texas DPA programs pair with FHA, VA, or USDA loans rather than conventional ones. The 2026 FHA loan limit in Dallas County is $563,500, which covers most DFW purchases in the $350K-$500K range.

The FHA minimum credit score is 580 for 3.5% down. Below that, down to 500, you need 10% down. Since most DPA programs require 620 or 640, you'll almost always clear the FHA minimum.

If you're a veteran, VA loans require zero down payment, no mortgage insurance, and can be stacked with seller concessions. Worth understanding before defaulting to FHA.

One note on FHA mortgage insurance: the annual premium is 0.55% of the loan balance, paid monthly, and typically lasts the life of the loan when you put less than 10% down. On a $380,000 loan, that's about $175 per month. Factor it into your payment estimate.

The Most Common Mistakes

Not using a participating lender. Your bank may not be enrolled in DHAP, TSAHC, or TDHCA. If your loan officer hasn't set up a DPA loan before, you may miss funds you're entitled to. Ask specifically about these programs before you start an application.

Waiting until you have 20% saved. You can buy a home in Dallas right now with as little as 3.5% down, and with DPA, your actual out-of-pocket can be near zero. Waiting two or three more years to save a larger down payment often costs more than it saves.

Assuming you don't qualify. Income limits are higher than most buyers expect. A household of two earning $110,000 can still qualify for TDHCA's program in most DFW counties. Run the actual numbers before you assume you're out.

Skipping the homebuyer education course. All three programs require it. You can't close without it. Book it early, because courses typically take 6-8 hours online.

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Frequently Asked Questions

Are Texas first-time home buyer grants free money?

TSAHC's grants (Homes for Texas Heroes and Home Sweet Texas) are true grants that don't need to be repaid as long as you meet the program's terms. TDHCA's My First Texas Home is a zero-interest second lien forgiven over a 3-year period, so if you stay in the home for three years, you owe nothing. DHAP is also a zero-interest second lien forgiven over a required affordability period.

Can I combine down payment assistance with an FHA loan in Texas?

Yes. Most Texas DPA programs including TSAHC, TDHCA, and DHAP are specifically designed to pair with FHA loans. The DPA covers your down payment and the FHA loan handles the purchase. You need to meet the credit score requirements for both the DPA program and the FHA lender.

What is the income limit for Texas first-time home buyer programs?

It varies by program and county. For TDHCA's My First Texas Home in the DFW area in 2026, income limits are approximately $97,000 to $120,000 for a household of one or two people. TSAHC's limits are similar. DHAP requires income at or below 80% of Dallas County's Area Median Income, which runs roughly $70,000 to $80,000 for a two-person household.

What is the DHAP program in Dallas?

DHAP stands for Dallas Homebuyer Assistance Program. It's the City of Dallas's own buyer assistance program, now administered by BCL of Texas. In 2026, it offers up to $60,000 for homes in High Opportunity census tracts, or up to $50,000 in other eligible Dallas areas, as a zero-interest second lien forgiven over a required affordability period.

Can veterans use first-time home buyer programs in Texas?

Yes. TDHCA's My First Texas Home waives the first-time buyer requirement entirely for honorably discharged veterans, so you qualify even if you've owned a home before. TSAHC's Homes for Texas Heroes specifically serves veterans. VA loans with zero down payment and no mortgage insurance can also be stacked with seller concessions in the current DFW market.

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Down payment assistance programs in Texas aren't complicated to use, but they require working with the right lender and knowing which programs match your situation. In the current DFW buyer's market, layering a DPA program with seller concessions is one of the best moves a first-time buyer can make.

If you're looking at homes in Dallas, Plano, Frisco, Wylie, McKinney, or anywhere in the Metroplex and want help figuring out which programs you qualify for, reach out. I'm happy to walk you through the numbers and connect you with a participating lender who can run the actual comparison for your situation.

Contact Grey Square to get started.

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About Paul Blair

Paul Blair is the founder and broker of Grey Square, a virtual real estate brokerage representing buyers and sellers across Dallas and Los Angeles. With 22 years in the business and more than $200 million in closed transactions, Paul works the full range of the market, from luxury homes in the Park Cities and Preston Hollow to estates in the Hollywood Hills and across the Westside. Connect with Paul and the Grey Square team at greysq.com. TX TREC #9011505 -- CA DRE #01792671.