Homes for Texas Heroes Home Loan & DPA Guide (2026)

Generally, hospital RNs and licensed social workers do not qualify for Homes for Texas Heroes. Under current TSAHC guidelines, only full-time public K-12 school nurses (who qualify as Professional Educators) and full-time nursing or allied health faculty members at higher education institutions are eligible. Bills to add general nurses (SB 536) and social workers (SB 845) did not pass in the 2025 legislative session, though hospital nurses and social workers can still apply for TSAHC's Home Sweet Texas program.

It depends on which assistance structure you choose. The TSAHC Grant (available on FHA, VA, and USDA loans) has no second lien and according to TSAHC guidelines does not need to be repaid after six months from the first-lien closing date. The 3-year Deferred Forgivable Second Lien carries 0% interest and no monthly payments, and it is forgiven in full on the third anniversary of your promissory note unless you sell, refinance, transfer, pay off the first mortgage, or move out before three years are up. If you choose the 30-year Bond Deferred Repayable Second Lien, it is not forgivable and must be repaid when you sell, refinance, or reach loan maturity.

No, you do not have to be a first-time homebuyer if you use Non-Bond down payment assistance or the No-DPA loan option by itself. Repeat buyers and current homeowners qualify as long as the new home becomes their primary residence within 60 days (if you used TSAHC assistance on your current home, you must sell it first). However, if you add a Mortgage Credit Certificate (MCC) or use Bond DPA, you must be a first-time buyer who has not owned a principal residence in the past three years, unless you buy in a Targeted Area or are a qualified veteran.

The minimum credit score is 620 for FHA, VA, and USDA loans, and 640 for HFA conventional loans and manufactured homes. Borrowers with a credit score between 620 and 639 on a government loan pay a 0.25% origination charge. TSAHC sets no maximum DTI ratio when your loan is approved through automated underwriting, while FHA manual underwriting allows up to a 45.00% DTI with at least a 640 credit score.

A TSAHC Mortgage Credit Certificate lets first-time buyers claim 15% of their annual mortgage interest as a dollar-for-dollar federal income tax credit every year they live in the home, with no $2,000 cap, and you can still deduct the rest of your mortgage interest. When Texas Heroes borrowers combine Non-Bond DPA with an MCC, TSAHC waives the standard $400 MCC issuance fee. Ask your lender to run the numbers for your loan.

How TSAHC calculates your income depends on the option you select. If you use Non-Bond DPA or the No-DPA option without an MCC, only the qualifying income of the borrowers on the loan application counts, and a non-purchasing spouse's income is excluded. If you add an MCC or use Bond DPA, TSAHC counts the total household income of everyone who will be on the deed of trust, including a non-purchasing spouse.

According to TSAHC guidelines, standard program fees deducted from the loan purchase price include a $250 funding fee, an $85 tax service fee, and a $200 compliance review fee. Loans for borrowers with a 620 to 639 credit score on an FHA, VA, or USDA loan carry a 0.25% origination charge, and participating lenders may charge a 1% origination fee plus customary closing costs. The 3-year forgivable second lien carries no extra program fees, and the $400 MCC fee is waived for Heroes using Non-Bond DPA.

TSAHC sets interest rates daily based on market conditions, and rates vary depending on your loan type and whether you choose 2%, 3%, 4%, or 5% in down payment assistance. Temporary and permanent rate buydowns are also allowed on Non-Bond loans if funded by someone other than the borrower, such as the seller. Because rates change daily, a participating lender can quote today's exact rate for your profile.