TSAHC down payment assistance
TSAHC in Houston — how the down payment grant actually works.
If you’re a Texas teacher, first responder, veteran, healthcare worker, or just a first-time buyer, TSAHC may close the down-payment gap. Here’s how it actually works and how I run it.
15+
TSAHC closings, last 24 months
5%
Down payment + closing assistance
2
Programs: Heroes & Home Sweet Texas
Section 1
What TSAHC actually is
The Texas State Affordable Housing Corporation is a statewide non-profit created by the Texas Legislature in 1994 to support affordable homeownership and rental housing. TSAHC is not a lender — it doesn’t issue mortgages directly. It partners with approved lenders to provide down payment and closing cost assistance alongside a standard mortgage (FHA, VA, USDA, or conventional), so buyers who can afford a monthly payment but don’t have the cash for down payment can still close.
How the assistance arrives
Either a grant (you don’t pay it back) or a second-lien loan (low or zero interest, often forgivable after a set occupancy period). The funds apply directly to your down payment and closing costs at closing — the cash never passes through your bank account.
Section 2
The two main TSAHC programs
Both use the same lender network and the same workflow. Pick the path that fits your situation.
For Texans in qualifying roles
Homes for Texas Heroes
Professional educators, full-time firefighters and EMS, peace officers, corrections officers, county jailers, public security officers, juvenile corrections, veterans and active military, allied health faculty, nursing faculty.
The benefit: 30-year fixed-rate mortgage paired with a down payment and closing cost grant of up to 5% of the loan amount.
For everyone else within income limits
Home Sweet Texas
You don’t need to be in a “hero” profession. First-time buyers and repeat buyers both qualify. Same lender network, same workflow.
The benefit: Same as Heroes — fixed-rate mortgage paired with a down payment and closing cost grant of up to 5% of the loan amount.
Heroes terms are generally slightly more favorable but restricted to qualifying professions. Home Sweet Texas is broader but income limits matter.
Section 3
How the assistance shows up at closing
$325,000 Houston home with a 3.5% FHA loan. Numbers below are approximate ranges, not quotes.
Without TSAHC
~$25,000+
Check you write at closing
3.5% down ($11,375) + closing costs ($7,500–$13,000) + prepaid escrows ($4,000–$6,500) + earnest money + option fee.
With TSAHC Home Sweet Texas, 5%
~$10,000
Check you write at closing
5% grant on a $313,625 loan = $15,681 in assistance applied directly to down payment + closing costs at the table.
The trade-off
A TSAHC-paired mortgage rate is typically 0.25 to 0.75 percentage points higher than a standalone loan. For most buyers in the income brackets TSAHC serves, the math heavily favors taking the assistance even with the higher rate. We model both scenarios before you commit.
Section 4
Who actually qualifies
Three categories of requirements. All three apply.
Requirement 1
Income limits
Published by county and family size, updated annually. In Harris, Fort Bend, Brazoria, and Montgomery counties, typical limits land in the $90K–$140K range for a 1-2 person household, higher for larger families.
Requirement 2
Credit and DTI
Minimum 620 FICO at most TSAHC lenders. Some FHA-paired lenders go to 580. Maximum DTI typically 45–50% depending on loan type.
Requirement 3
Home + education
Texas property, primary residence. HUD-approved homebuyer education course required (online, $50–$100, 2–4 hours). Skip it and the program denies funding.
Section 5
What loan types pair with TSAHC
TSAHC works with all four major loan types. Each has its own fit.
Most common
FHA-paired
3.5% down, 580+ FICO. TSAHC covers most of the 3.5% plus closing costs. Life-of-loan MI in most cases.
Conventional 97
3% down, 620+ FICO. PMI drops automatically at 78% LTV — long-term advantage for 7+ year stays.
VA-paired
For qualifying veterans and active military. 0% down VA + TSAHC for closing costs = one of the strongest stacks.
USDA-paired
For rural-eligible properties (parts of far-outer Liberty, Waller, Montgomery counties). 0% down + TSAHC.
Section 6 · Optional add-on
The Mortgage Credit Certificate (MCC)
TSAHC also offers a Mortgage Credit Certificate that can pair with the down payment assistance. The MCC is a federal income tax credit equal to a percentage of the mortgage interest you pay each year — typically 20% of annual interest, up to $2,000 per year — for the life of the loan.
It’s a credit, not a deduction, which makes it considerably more valuable than the standard mortgage interest deduction. Small upfront fee at closing (typically $500–$1,000). For buyers planning 5+ years in the home, the MCC easily pays for itself in year one and continues compounding.
Section 7
How to actually apply
Six steps from “I think I qualify” to funded at closing.
Confirm fit
We check whether your income, credit, family size, and target home all fit inside the current year’s TSAHC parameters. Five-minute conversation.
Choose your approved lender
TSAHC maintains a list of participating lenders. I work with several Houston-area lenders who handle TSAHC volume routinely. Use one of them — not a lender who’s never closed a TSAHC loan. The wrong lender can sink the timeline.
Get pre-approved on a TSAHC-paired mortgage
Same pre-approval workflow as any mortgage, with TSAHC reservation layered in. The reservation reserves your assistance funds — programs sometimes run out of funding mid-year, so reserving early matters.
Complete the HUD homebuyer education course
Required. Get the certificate before underwriting closes.
Find the right home
This is where I come in. We use your TSAHC-defined budget, your timeline, and your specific buyer profile to find homes whose math actually works. TSAHC has no minimum or maximum home price beyond conventional loan limits.
Close
The assistance funds show up on your closing disclosure as a credit. You bring less cash. You walk out with keys.
Section 8
What changes when an agent has done TSAHC many times
I’ve closed more than 15 TSAHC transactions in the last 24 months. Most Houston agents have closed zero or one. Four practical reasons that matters:
Timeline
TSAHC adds paperwork and a third party (TSAHC + lender + title) that has to coordinate. When the agent has done it 15 times, the friction is invisible. When the agent has never seen it, the closing slips a week.
Seller-side perception
Some listing agents view TSAHC offers as risky because they don’t understand them. I write the offer in a way that addresses those concerns up front — reservation in place, lender experienced, education complete. Reads as clean as a standard FHA offer.
Funding cycles
TSAHC funds are allocated annually. Some program options run out mid-year, especially in the second half. Knowing which option still has funding — and timing the reservation — is the difference between a smooth close and a last-minute switch.
Stacked benefits
Pairing TSAHC with the MCC, the right loan type, and the homestead exemption filing post-closing is a multi-step optimization. I run all of it for every buyer who qualifies.
Section 9 · FAQ
Questions buyers ask me about TSAHC
Do I have to be a first-time buyer to qualify?
No. Home Sweet Texas is open to repeat buyers. Homes for Texas Heroes is open to qualifying professionals regardless of first-time status.
What if I’ve owned a home before but it’s been a few years?
You may also qualify under a separate “first-time buyer” tax classification if you haven’t owned a home in the past three years. That can stack with the MCC for the federal tax credit.
Is the grant really free money, or do I have to pay it back?
The grant version is genuinely a grant — no repayment, no lien. The second-lien option (if you choose it instead) is a deferred loan, often zero or low interest, sometimes forgivable after a set occupancy period. Most TSAHC closings I do use the grant version.
What if the program runs out of money?
TSAHC reservations work on a first-come basis. Once funds are exhausted in a program option, new applications are paused until the next funding cycle. We reserve early, well before contract execution, to avoid this.
Can I use TSAHC on new construction?
Yes. New construction and resale homes both qualify, as long as the home and buyer meet program requirements. The lender + builder coordination takes a beat longer on new construction, but it works.
Houston buyer support
Think TSAHC might fit you?
15-minute call to check your fit, run the closing-cost math both ways, and walk you through the timeline.
No commitment, no pressure.
About the author
Written by Eddie Weir, REALTOR®
I’m a top 1% REMAX REALTOR® in Greater Houston with a corporate strategy and data-analysis background, ABR and LUXE designations, Texas license #560899. I work with TSAHC closings regularly. Read more about how I work, or text 832-343-8383 with any question.
