Advertiser Disclosure

Texas First-Time Home Buyer Programs of 2018

July 30, 2018
Finding the Right Mortgage, Mortgages
Texas First-Time Home Buyer Programs
NerdWallet adheres to strict standards of editorial integrity to help you make decisions with confidence. Some of the products we feature are from partners. Here’s how we make money.
We adhere to strict standards of editorial integrity. Some of the products we feature are from our partners. Here’s how we make money.

Buying a house is a huge financial decision. If you’ve never done it before, it’s easy to feel like you’re in over your head. Loan programs for first-time home buyer can make the process easier, especially if you’ve had credit issues or found it hard to save up a big down payment.

The Texas Department of Housing and Community Affairs, or TDCHA, offers first-time home buyer programs to assist qualified borrowers in the Lone Star state. Some national loan programs also have features that can benefit first-time home buyers. Browse the options below to find the right mortgage for your needs.

National first-time home buyer loans

No matter where you live, these loan programs have benefits that may help you buy your first home, like low down payment and credit score requirements.

Conventional mortgage

National program

Best for

Low down payment

Limited mortgage insurance premiums

What you need to know

First-time home buyers can get a conventional home loan with as little as 3% down if the mortgage meets requirements set by Fannie Mae and Freddie Mac. And if you put at least 20% down, you won’t have to pay mortgage insurance. Most lenders require a minimum credit score of 620 to qualify for a

 

FHA loans

National program

Best for

Low credit score

Low down payment

What you need to know

Mortgages insured by the Federal Housing Administration, or FHA, offer relaxed qualification requirements, especially when it comes to down payment and credit score. You can qualify for an FHA home loan with a credit score as low as 500, but you’ll need a 10% down payment. If your score is 580 or

 

VA loans

National program

Best for

Military

Low down payment

What you need to know

Guaranteed by the U.S. Department of Veterans Affairs, these mortgages are available to military members, veterans and surviving spouses. If you qualify, you’ll see benefits such as no minimum credit score and no down payment or mortgage insurance, but you'll likely have to pay a VA funding fee.

 

USDA loans

National program

Best for

Low down payment

Rural

What you need to know

The USDA home loan program encourages rural and suburban homeownership by offering zero-down-payment mortgages to lower-income buyers. Borrowers with nontraditional credit data, like rent or utility payments, can still apply, but those with a score of 640 or above will experience faster loan

Texas first-time home buyer loan programs

If you haven’t owned a home as your primary residence within the past three years, you’re considered a first-time home buyer by the TDHCA. This requirement is waived if you’re an honorably discharged veteran.

TDHCA highlights and eligibility requirements

Highlights

  • Competitive interest rates
  • Down payment and closing cost assistance
  • Tax credit possible for annual interest paid on mortgage loan
  • Programs can be combined for maximum benefit
  • Homes in “targeted areas” enjoy higher income and purchase price limits, and no first-time home buyer requirement

Eligibility

  • Borrowers must have a minimum credit score of 620
  • Borrowers must meet income and loan requirements
  • Property must be located in Texas and not exceed purchase price limits
  • Property must be a single-family home or a single-unit condominium
  • Some manufactured housing and duplexes allowed

» MORE: Tips for first-time home buyers

My First Texas Home loan

State program

Learn more

at TDHCA

Best for

Low mortgage rates

Down payment assistance

Closing cost assistance

What you need to know

The My First Texas Home program offers 30-year, low fixed-interest rate mortgages for first-time home buyers through a network of participating lenders. The program includes down payment and closing cost assistance of up to 5% of the mortgage amount as a no-interest, no-monthly-payment second lien.

 

Texas mortgage credit certificate

State program

Learn more

at TDHCA

Best for

Tax credits

What you need to know

Every mortgage payment includes interest charges that go to the lender, rather than your loan balance. First-time home buyers in Texas may be able to recoup a portion of that interest on their federal tax bill using the Texas Mortgage Credit Certificate, or MCC. The tax credit is 40% of your

Your next step

Ready to take the next step toward being a Texas homeowner? It’s time to dig into the specifics. For full details on any of the programs listed above, visit the Texas Department of Housing and Community Affairs website.

The TDHCA doesn’t approve applications or lend money; instead, it has a network of local lenders that provide access to first-time home buyer programs. These lenders may have additional rules about income limits, credit scores and eligible properties. If you’re interested in these home buyer assistance programs, reach out directly to a lender for more information.

» MORE: See the best Texas mortgage lenders

More from NerdWallet:

Calculate your mortgage payment

Compare Texas mortgage rates

See first-time home buyer programs by state