Home Sweet Texas Home Loan Program: 2026 DPA Guide

Coming up with the down payment and closing costs is the single biggest hurdle for many Texans who can comfortably afford a monthly house payment but do not have tens of thousands of dollars sitting in savings.

This guide breaks down the Home Sweet Texas Home Loan Program from the Texas State Affordable Housing Corporation (TSAHC), covering 2026 eligibility rules, grant versus forgivable second-lien options, credit score minimums, county income limits, and Mortgage Credit Certificate (MCC) pairing.

Check Your Texas Home Purchase Eligibility

By the end, you will know exactly how Home Sweet Texas works, which income limit applies in your county, and how to compare it against other Texas first-time homebuyer grants and programs before you apply.

What Is the Home Sweet Texas Home Loan Program?

The Home Sweet Texas Home Loan Program is a mortgage and Texas down payment assistance program administered by the Texas State Affordable Housing Corporation (TSAHC). It pairs a 30-year fixed-rate first mortgage with optional assistance of up to 5% of the total loan amount to help cover your down payment and closing costs.

Unlike occupation-restricted programs, Home Sweet Texas has no profession requirement and no Texas residency requirement. It is built for low- and moderate-income homebuyers. TSAHC's program page describes low-income as generally up to 80% of Area Median Income (AMI) and moderate-income as generally up to 150% to 170% of AMI, but the county dollar limit is what actually applies.

According to TSAHC's program guidelines (revised September 9, 2026), buyers can choose from three tracks under Home Sweet Texas:

• Non-Bond DPA: A 30-year fixed first mortgage paired with a grant or a 3-year deferred forgivable second lien (funded through mortgage-backed securities).
• Bond DPA: A 30-year fixed first mortgage paired with a grant, a 3-year deferred forgivable second lien, or a 30-year deferred repayable second lien (FHA, VA, or USDA only; funded through tax-exempt mortgage revenue bonds, when available).
• No DPA Option: A 0% assistance first mortgage at a competitive interest rate that can be paired with a TSAHC Mortgage Credit Certificate (MCC) or compatible city and county assistance programs.

The master servicer for all TSAHC loans is Lakeview Loan Servicing, LLC. Interest rates are set daily by the program, and a participating lender can quote today's rate for each assistance tier.

Who Qualifies for Home Sweet Texas in 2026?

To qualify for the Home Sweet Texas Home Loan Program, you do not need to work in a public-service career, and in most cases you do not even need to be a first-time buyer. You simply need to meet TSAHC's baseline income, credit, occupancy, and property rules.

Do You Have to Be a First-Time Homebuyer?

No—not if you use Non-Bond DPA or the No DPA option without an MCC. Prior and current homeowners can use Home Sweet Texas as long as the new house will become their primary residence. Note that if you bought your current home using TSAHC down payment assistance, you must sell that home before using TSAHC assistance again.

You must be a first-time homebuyer (defined as having no ownership interest in a principal residence in the prior three years) only if you choose Bond DPA or add a Mortgage Credit Certificate (MCC). Even then, the three-year first-time buyer rule is waived if you are buying in a designated Targeted Area or if you are a Qualified Veteran under 38 U.S.C. Section 101 (note that active-duty service members do not count as Qualified Veterans for this specific waiver).

Baseline Buyer & Property Requirements

Every Home Sweet Texas borrower must meet the following program rules:

• Income Limits: Your income must be at or below the published Home Sweet Texas maximum for the county where you are buying.
• Credit Score: At least 620 for government loans (FHA, VA, and USDA-RHS) and 640 for HFA conventional loans or manufactured homes.
• Primary Residence Occupancy: You must move into the home as your principal residence within 60 days of closing, and no more than 15% of the home may be used for business purposes.
• Homebuyer Education: At least one borrower must complete an approved in-person or online homebuyer education course before closing (plus short TSAHC product videos if using the 3-year second lien or an MCC).
• Participating Lender: You must apply through a TSAHC-approved participating lender.

Eligible Property Types

Home Sweet Texas can be used to purchase these residential property types in Texas:

• Single-family detached homes
• Condominiums, townhomes, and Planned Unit Developments (PUDs)
• 2- to 4-unit properties, provided you occupy one of the units as your primary residence and the building has been used as a residence for at least five years
• Manufactured homes built in 1994 or later that are permanently affixed to land as real property (government loans require a double-wide or larger; single-wide manufactured homes are allowed with conventional loans only, and all manufactured homes require at least a 640 credit score)

Refinances are not eligible—Home Sweet Texas is strictly for home purchases. To see how these rules stack up against standard mortgage guidelines, review our breakdown of the requirements to buy a house in Texas.

Check Your Texas Home Purchase Eligibility

Home Sweet Texas Down Payment Assistance Options

TSAHC offers three distinct down payment assistance (DPA) structures under Home Sweet Texas. Which option you can choose depends on whether your first mortgage is a government loan (FHA, VA, or USDA) or an HFA conventional loan, and whether you use Non-Bond or Bond financing.

1. The DPA Grant (2% to 5%)

Available exclusively with government-backed loans (FHA loans in Texas, VA loans in Texas, and USDA-RHS loans), the Home Sweet Texas grant gives you 2%, 3%, 4%, or 5% of your total loan amount at closing. There is no second lien recorded on your property.

While consumer summaries often say a grant never has to be repaid, TSAHC's official lender guidelines specify that the grant does not need to be repaid after six months from the first-lien mortgage closing date. TSAHC does not spell out what that six-month condition means in practice, so confirm the exact terms with your participating lender.

2. The 3-Year Deferred Forgivable Second Lien (2% to 5%)

Available on all eligible loan types—including Fannie Mae HFA Preferred and Freddie Mac HFA Advantage conventional loans—this option provides 2%, 3%, 4%, or 5% of the total loan amount as a silent second mortgage:

• 0% interest and no monthly payments.
• Forgiven in full on the third anniversary of the promissory Note.
• Not pro-rated: If you sell, transfer, refinance, pay off the first mortgage, or stop occupying the home as your primary residence at any point during those first 36 months, the entire assistance balance must be repaid in full.
• Carries no additional TSAHC fees.

For most buyers who plan to stay in their home and keep their mortgage for at least three years, the 3-year forgivable second lien functions much like a grant once the three-year mark passes.

3. The 30-Year Deferred Repayable Second Lien (Bond DPA, 4% or 5%)

When TSAHC has tax-exempt mortgage revenue bond volume available, first-time buyers (a rule waived in Targeted Areas and for qualified veterans) earning at or below 80% AMFI and using an FHA, VA, or USDA loan can choose a 30-year deferred repayable second lien of 4% or 5% of the total loan amount.

This second loan carries 0% interest and requires no monthly payments. However, it is not forgivable—you must repay the principal balance when the 30-year loan matures, or earlier if you sell, transfer, refinance, or pay off the loan. Because Bond DPA depends on bond market conditions and volume cap, TSAHC cannot guarantee continuous availability.

What Can the Assistance Pay For?

You can apply Home Sweet Texas DPA toward:

• Your required down payment
• Closing costs (including items such as real estate agent commission, when permitted by agency guidelines)
• Prepaid items and related loan fees

DPA funds cannot be used to pay off personal debt, cannot reduce your first-lien principal balance, and cannot be paid out to you as cash back at closing (except to reimburse documented earnest money or prepaid overages).

Check Your Texas Home Purchase Eligibility

Loan Types, Credit Scores, and DTI Requirements

Home Sweet Texas is not a standalone cash handout—it is packaged with a 30-year fixed-rate first mortgage originated through a participating lender.

Eligible First Mortgage Loans

All loans must be 30-year fixed-rate purchase mortgages. Eligible products include:

• FHA 30-Year Fixed (including FHA Limited 203(k) rehabilitation loans)
• VA 30-Year Fixed
• USDA-RHS 30-Year Fixed
• HFA Conventional 30-Year Fixed: Fannie Mae HFA Preferred and Freddie Mac HFA Advantage

Temporary interest rate buydowns (2-1, 1-1, and 1-0) and permanent buydowns are allowed on Non-Bond loans, provided the borrower does not fund the buydown out of pocket. Buydowns are not permitted on Bond loans.

Credit Score & Debt-to-Income (DTI) Rules

Two helpful underwriting features stand out in TSAHC's program materials:

1. No TSAHC DTI Cap with Automated Underwriting: When your loan is approved through an Automated Underwriting System (AUS), TSAHC imposes no maximum Debt-to-Income (DTI) overlay of its own. If you need FHA manual underwriting, the maximum DTI is 45.00% with at least a 640 credit score.
2. Cosigners and Non-Occupying Co-Borrowers Allowed: Non-occupying co-borrowers or cosigners are permitted on all loan types as long as they do not sign the deed of trust or take ownership title. Better yet, a cosigner's income only counts toward TSAHC's program income limits on conventional loans—not on FHA, VA, or USDA loans.

Note that borrowers with credit scores between 620 and 639 on FHA, VA, or USDA loans are charged a 0.25% origination charge.

Home Sweet Texas Income & Purchase Price Limits (2026)

TSAHC sets income limits by county, loan category, and whether you use Non-Bond DPA, Bond DPA, or an MCC. These are the current published figures from TSAHC's County Income Limits tool (accessed October 26, 2026); because area medians can update each year, always confirm your exact limit with a participating lender before going under contract.

Whose Income Counts?

How your lender calculates your income depends on which Home Sweet Texas option you choose:

• Non-Bond DPA or No DPA (without an MCC): Only the qualifying income of the borrowers listed on the 1003 loan application counts. A non-purchasing spouse's income is excluded. Household size does not change this limit.
• With an MCC or with Bond DPA: The total household income of everyone on the deed of trust—including a non-purchasing spouse—must be counted, and household size applies for MCC limits.

Purchase Price Limits

If you use Non-Bond DPA by itself (without an MCC), there is no TSAHC purchase price limit. Purchase price limits apply only when you use Bond DPA or add a Mortgage Credit Certificate (MCC).

Current County Income & Purchase Price Limits (Non-Targeted Areas, No MCC)

The table below shows the current published Home Sweet Texas income limits across 13 major Texas counties when you do not add an MCC, alongside the Homes for Texas Heroes limit for comparison.

Notice the difference between columns: on an FHA, VA, USDA, or above-80% conventional loan, a buyer in Harris County can earn up to $156,000 under Home Sweet Texas, while an Austin-area buyer in Travis or Williamson County can earn up to $201,600. If you use an HFA conventional loan at or below 80% AMFI, the lower 80% AMFI column applies instead. For a wider look at how county caps work across state programs, see our guide to Texas homebuyer income and purchase price limits.

Check Your Texas Home Purchase Eligibility

Pairing Home Sweet Texas with TSAHC's Mortgage Credit Certificate (MCC)

If you are a first-time homebuyer (or buying in a Targeted Area or qualifying as a veteran), you can pair your Home Sweet Texas Non-Bond DPA or No DPA loan with a TSAHC Mortgage Credit Certificate (MCC). (Note that TSAHC discontinued standalone MCCs in November 2023, and MCCs cannot be combined with Bond DPA.)

How the 15% TSAHC MCC Works in 2026

According to TSAHC's 2026 MCC Program guidelines and September 2026 implementation notice:

• 15% Annual Tax Credit: You receive a dollar-for-dollar federal income tax credit equal to 15% of the mortgage interest you pay each year for as long as you occupy the home as your primary residence.
• No $2,000 Annual Cap: TSAHC removed its $2,000 annual maximum cap in 2019. Your credit cannot exceed your federal income tax liability for the year, but any unused credit can be carried forward for up to three years.
• Worked Example from TSAHC's Guidelines: On a $240,000 mortgage, TSAHC's illustration (using an example rate only; actual program rates are set daily) puts first-year mortgage interest at roughly $18,000. A 15% MCC creates a $2,700 federal tax credit in year one, and the remaining $15,300 in mortgage interest remains eligible for the standard mortgage interest deduction if you itemize.
• Issuance Fee: Home Sweet Texas borrowers pay a $400 MCC issuance fee (this fee is waived only for Homes for Texas Heroes borrowers pairing Non-Bond DPA with an MCC).
• Federal Recapture Tax Rule: Both the MCC and Bond DPA may carry a federal recapture tax if you sell the home within the first 9 years; it is the lesser of 50% of the gain or a formula amount. Exemptions include selling after year 9, selling with no gain, an income increase that is not large enough to trigger it, or a sale due to death or divorce. Refinancing revokes the MCC unless you apply for a reissued MCC.

Current County Income & Purchase Price Limits When Adding an MCC

When you add an MCC to Home Sweet Texas, stricter income limits (100% AMFI for 1–2 person households and 115% AMFI for 3+ person households in non-targeted areas) and purchase price limits take effect:

If you also use an HFA Conventional loan at or below 80% AMFI with an MCC, the 80% AMFI limit from the earlier table (for example, $84,080 in Harris County or $94,000 in Dallas County) still applies.

Homebuyer Education and Program Fees

Before you can close on a Home Sweet Texas loan, TSAHC requires a few straightforward steps and discloses standard program fees upfront.

Homebuyer Education Rules (Updated August 28, 2026)

• At least one borrower on the loan must complete an approved in-person or online homebuyer education course before closing.
• If you use the 3-year Deferred Forgivable Second Lien or an MCC, you must also watch TSAHC's short product-specific education video and sign the TSAHC Home Buyer Education Affidavit prior to closing.

Standard TSAHC Program Fees

According to Section 6.1 of the TSAHC guidelines, the following standard program fees apply (deducted by Lakeview Loan Servicing from the loan purchase price):

• $250 funding fee
• $85 tax service fee
• $200 compliance review fee
• 0.25% origination charge if your credit score is between 620 and 639 on an FHA, VA, or USDA loan
• $400 MCC issuance fee if you add a Mortgage Credit Certificate to a Home Sweet Texas loan

The 3-year forgivable second lien and 30-year Bond second lien carry no extra TSAHC fees (only the recording fee may be charged on the Bond second lien). Participating lenders may also charge up to a 1% origination fee or discount point plus reasonable and customary closing fees, and your Home Sweet Texas DPA can help cover eligible closing costs.

Check Your Texas Home Purchase Eligibility

Home Sweet Texas vs. Homes for Texas Heroes vs. TDHCA Programs

Texas buyers can compare Texas first-time home buyer programs from two organizations: TSAHC (which runs Home Sweet Texas and Homes for Texas Heroes) and the Texas Department of Housing and Community Affairs (TDHCA) (which runs the My First Texas Home Program and the My Choice Texas Home Program).

Here is how Home Sweet Texas compares directly with TSAHC's sister program, Homes for Texas Heroes:

Note for hospital nurses and social workers: Among nurses, only full-time public K-12 school nurses and full-time nursing faculty qualify for Homes for Texas Heroes, and licensed social workers are not on the list (2025 bills SB 536 and SB 845, which proposed adding licensed nurses and licensed social workers, were left pending in committee and did not pass). That makes Home Sweet Texas the go-to TSAHC program for hospital RNs, private-school teachers, social workers, and private-sector employees.

You should also ask a participating lender to compare Home Sweet Texas against TDHCA's My First Texas Home Program (for first-time buyers and veterans) and My Choice Texas Home Program (for repeat and first-time buyers) to see which agency offers the best combination of interest rate and assistance on the day you lock your loan.

How to Apply for the Home Sweet Texas Program

You do not apply directly to TSAHC for a mortgage—instead, you apply through a TSAHC-approved participating lender who underwrites the first mortgage, checks your program compliance, and registers and locks your loan in the LoanDock lender portal.

1. Check Your Eligibility & Income Limit: Compare your qualifying income (and household income, if adding an MCC or Bond DPA) against the published cap for your target Texas county.
2. Get Connected with a Participating Lender: A participating lender will review your credit (620+ for government loans, 640+ for conventional), compare the 2%, 3%, 4%, and 5% DPA options, and quote today's program rates. Our team helps Texas buyers check their eligibility, compare assistance options side by side, and get connected with a participating lender.
3. Complete Homebuyer Education: Finish your online or in-person homebuyer education course (plus TSAHC's short video if using the 3-year forgivable second lien or MCC) and sign the education affidavit before closing.
4. Lock Your Rate & Close: Once you are under contract on an eligible Texas home, your participating lender registers and locks your loan, submits the pre-closing compliance package at least 5 calendar days before closing, and applies your Home Sweet Texas funds directly at the closing table.

Bottom Line: Is Home Sweet Texas Right for You?

If you have at least a 620 credit score and steady income within your county's cap, the Home Sweet Texas Home Loan Program is one of the most flexible ways to cover 2% to 5% of your loan amount in down payment and closing costs—without needing to be a first-time homebuyer or work in a specific profession. Whether you choose the government-loan grant, the 3-year forgivable second lien, or pair your loan with a 15% Mortgage Credit Certificate, comparing your numbers early will help you walk into house hunting with confidence.

Check Your Texas Home Purchase Eligibility