Many Texas homebuyers assume state down payment assistance disappears the moment they buy their first starter home, or as soon as their household income or target home price edges past strict bond-program caps.
This guide breaks down the My Choice Texas Home program from the Texas Department of Housing and Community Affairs (TDHCA), covering who qualifies, eligible FHA, VA, USDA, and conventional loan options, 2% to 5% second-lien structures, and the 2026 county income limits.
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By the end, you will know whether My Choice Texas Home fits your budget and how it compares side-by-side with TDHCA's first-time buyer program so you can choose the right path to closing.
What Is the My Choice Texas Home Program?
The My Choice Texas Home program (often abbreviated MCTH) is a statewide mortgage and texas down payment assistance program administered by the Texas Department of Housing and Community Affairs (TDHCA) through its Texas Homebuyer Program portal.
While TDHCA's sister program, My First Texas Home, is restricted to first-time buyers, veterans, and targeted census tracts, My Choice Texas Home is built for a wider range of Texans:
- Repeat homebuyers who have owned a home in the last three years or currently own a home
- First-time homebuyers who want a conventional mortgage (Fannie Mae or Freddie Mac) instead of a government-backed loan
- Households that exceed bond limits on total household income or purchase price under My First Texas Home
The program pairs a 30-year, fixed-rate first mortgage with 2% to 5% of the total loan amount in down payment and closing cost assistance, while funding lasts. Since February 3, 2025, The Money Source (TMS) serves as the master servicer for TDHCA's homebuyer programs.
Who Qualifies for My Choice Texas Home in 2026?
My Choice Texas Home's qualification rules are more flexible than My First Texas Home's in several ways that matter to move-up buyers and married couples.
According to TDHCA's August 2026 program matrix and Lender Guide, borrowers must meet these baseline requirements:
- No first-time buyer requirement: Open to repeat buyers, first-time buyers, and veterans. You may own a home right now, as long as the new property will become your primary residence.
- Payoff of prior TDHCA assistance: If your current home was purchased using TDHCA down payment assistance, any remaining balance on that second lien must be paid off at or before closing on your new My Choice Texas Home loan.
- Primary residence occupancy: The property must be located in Texas, and you must occupy it as your principal residence within 60 days of closing.
- Application income only: Only the income of the borrower(s) on the loan application (Form 1003) is counted against the program income limit. A non-purchasing spouse's income is not counted. Co-signer income is counted only on MCTH conventional loans.
- No purchase price limit: TDHCA sets no program cap on the home's purchase price for My Choice Texas Home.
- No recapture tax or tax-return requirement: MCTH loans are not subject to federal recapture tax, and TDHCA does not require tax returns for the program.
- Co-signers: Co-signer income counts toward the limit only on MCTH conventional loans. Ask a participating lender to confirm how co-signers and co-borrowers are treated on your loan type.
Eligible Property Types
The property rules for My Choice Texas Home mirror TDHCA's standard guidelines:
- Eligible: New or existing single-family homes, condominiums, planned unit developments (PUDs), manufactured homes titled as real property, and duplexes (2-unit properties) if you occupy one unit and the structure has been residential for at least five years (waived in targeted census tracts).
- Ineligible: Rentals, second homes, triplexes, and fourplexes.
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Loan Types and Interest Rates
One of the biggest advantages of the My Choice Texas Home program is loan choice. While My First Texas Home only allows government-insured loans, MCTH lets you choose between government and conventional financing.
All first mortgages under My Choice Texas Home are 30-year, fully amortizing, fixed-rate texas home loans:
- FHA Loans in Texas: Government-insured FHA financing. Note that FHA 203(k) rehabilitation loans are not allowed in any TDHCA program.
- VA Loans in Texas: VA financing for eligible borrowers.
- USDA Loans: USDA financing for eligible borrowers and properties.
- Fannie Mae HFA Preferred (Conventional): Available in two income tiers—borrowers at or below 80% Area Median Income (AMI) and borrowers above 80% AMI—as determined by Fannie Mae Desktop Underwriter (DU).
- Freddie Mac HFA Advantage (Conventional): Also structured into at-or-below 80% AMI and above 80% AMI tiers, determined by Freddie Mac Loan Product Advisor (LPA).
How MCTH Interest Rates Work
TDHCA sets interest rates for My Choice Texas Home daily on its official Rate Notice. Your rate depends on the first-mortgage product (government vs. conventional), your AMI tier on conventional loans, the percentage of down payment assistance you choose (2%, 3%, 4%, or 5%), and whether you select the 30-year deferred or 3-year forgivable second lien.
Because rates and available assistance tiers change daily, a participating lender can pull today's TDHCA Rate Notice and show you the exact payment numbers for each tier. According to TDHCA's Rate Notice, a permanent rate buydown is also available for My Choice Texas Home through Hilltop Securities; ask your lender whether it fits your situation.
Down Payment Assistance Options (2% to 5%)
TDHCA down payment assistance under My Choice Texas Home provides 2% to 5% of the total loan amount toward your down payment and closing costs, subject to daily funding availability.
The assistance is issued as a second mortgage lien at 0% interest with no required monthly payments. TDHCA offers two second-lien structures:
| Feature | 30-Year Deferred Repayable Second Lien | 3-Year Deferred Forgivable Second Lien |
|---|---|---|
| Assistance Amount | 2% to 5% of total loan amount (per daily Rate Notice) | 2% to 5% of total loan amount (per daily Rate Notice) |
| Interest Rate | 0% | 0% |
| Monthly Payment | $0 required (voluntary payments allowed) | $0 required |
| Forgiveness | Not forgiven; due in full on a trigger event below | 100% forgiven after 36 months if current and occupying the home |
| When Repayment Is Triggered | Sale, refinance, transfer, or payoff of the first mortgage | Sale, refinance, or payoff before it is forgiven |
| First-Mortgage Rate Impact | Paired with a lower first-mortgage rate than the forgivable option on the October 26, 2026 Rate Notice | Paired with a higher first-mortgage rate on the October 26, 2026 Rate Notice |
On TDHCA's daily Rate Notice, both the 30-year deferred and 3-year forgivable structures are offered for My Choice Texas Home, though individual percentage tiers (such as 5% on the forgivable option) may show as unavailable on a given day.
Extra Local Gift Funds That Stack With MCTH
In certain Central Texas counties, buyers using My Choice Texas Home can stack extra local gift funds from the Capital Area Housing Finance Corporation (CAHFC) while funds last, on a first-come, first-served basis with no repayment required:
- $7,500 in Bastrop, Blanco, Burnet, Caldwell, Fayette, Lee, and Llano counties
- $2,500 in Hays and Williamson counties
Note that the Harris County HFC ($1,000) and McKinney HFC ($5,000) local grants listed on TDHCA's matrix apply to My First Texas Home and are not available with My Choice Texas Home.
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2026 My Choice Texas Home Income Limits (By County)
Unlike My First Texas Home—which caps household income based on family size and census tract—My Choice Texas Home uses higher Texas Homebuyer Income & Purchase Price Limits and only counts the income on your loan application (Form 1003).
For FHA, VA, and USDA loans, the income limit is set at 170% of Area Median Family Income (AMFI) regardless of household size. For conventional loans (Fannie Mae HFA Preferred and Freddie Mac HFA Advantage), limits are split into two tiers—at or below 80% AMI and above 80% AMI (capped at 170% AMI)—using county-specific figures.
Here are the current published My Choice Texas Home income limits (effective July 13, 2026) for major Texas counties. Because limits are updated periodically, always confirm current figures with a participating lender:
| County (HUD Area) | Conventional: 80% AMI or Below Tier | Conventional: Above 80% AMI Tier | FHA / VA / USDA (170% AMFI, Any Family Size) | Purchase Price Limit |
|---|---|---|---|---|
| Harris, Fort Bend, Montgomery (Houston HMFA) | $84,080 | $178,670 | $176,800 | No program limit |
| Dallas, Collin, Denton (Dallas HMFA) | $94,000 | $199,750 | $205,870 | No program limit |
| Tarrant (Fort Worth-Arlington HMFA) | $94,000 | $199,750 | $187,510 | No program limit |
| Bexar (San Antonio-New Braunfels HMFA) | $81,280 | $172,720 | $178,033 | No program limit |
| Travis, Williamson (Austin-Round Rock-San Marcos MSA) | $107,520 | $228,480 | $228,480 | No program limit |
| Lubbock (Balance of State for gov't loans) | $71,600 | $152,150 | $172,550 | No program limit |
| El Paso (Balance of State for gov't loans) | $58,720 | $124,780 | $172,550 | No program limit |
| Hidalgo (Balance of State for gov't loans) | $51,200 | $108,800 | $172,550 | No program limit |
| Balance of State (All other unlisted counties) | County-specific | County-specific | $172,550 | No program limit |
Because non-purchasing spouse income is excluded on My Choice Texas Home, a married couple whose combined earnings exceed the cap may be able to qualify with only one spouse on the loan application, provided that spouse's income alone qualifies for the mortgage. Confirm this approach with a participating lender.
Credit Score, DTI, Education, and Program Fees
To get approved for a My Choice Texas Home loan, you will need to meet both TDHCA's program overlays and the underwriting guidelines of your chosen loan type:
- Minimum Credit Score: 620 middle (determining) credit score.
- Debt-to-Income (DTI) Ratio: Your maximum DTI ratio follows the automated underwriting system (AUS) findings.
- Manual Underwriting: Permitted on FHA, VA, and USDA loans only, with a maximum 45% DTI (manually underwritten FHA loans also carry a 0.25% loan-level price adjustment). Manual underwriting is not allowed on MCTH conventional loans.
- Homebuyer Education: Every borrower on the loan must complete a pre-purchase, HUD-certified homebuyer education course before closing. Accepted courses include Finally Home!, Freddie Mac CreditSmart Homebuyer U, Fannie Mae HomeView, or any HUD-certified homebuyer education provider. Financial-literacy-only courses do not satisfy this rule. Non-occupying co-signers are exempt.
TDHCA Program Fees for My Choice Texas Home
According to the August 2026 MCTH program matrix, the following standard program fees apply (there are no MCC fees since MCTH cannot be paired with an MCC):
| Fee Type | Published Amount |
|---|---|
| Funding Fee (The Money Source) | $319 |
| Compliance Review Fee (Hilltop Securities) | $225 |
| Tax Service Fee | $80 |
| Fraud Prevention Fee | $20 |
| Life-of-Loan Flood Determination | $15 |
| Manufactured Housing (MHU) Funding Fee | 0.50% (if applicable) |
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Can You Pair My Choice Texas Home With a Texas MCC?
No. You cannot combine the My Choice Texas Home program with a Texas Mortgage Credit Certificate (TXMCC).
According to TDHCA's program documents, the TXMCC is tied to first-time homebuyer rules (with veteran and targeted-area exemptions) and the same household income and purchase price limits as My First Texas Home. TDHCA's daily Rate Notice lists the DPA + MCC Combo only under the My First Texas Home program.
If you are a first-time buyer or veteran who wants both down payment assistance and the federal mortgage interest tax credit (15% on the October 26, 2026 Rate Notice), ask your lender to compare the My First Texas Home Combo against a standalone My Choice Texas Home loan.
My Choice Texas Home vs. My First Texas Home
Both programs are run by TDHCA and offer 2% to 5% in 0% interest down payment assistance, but they serve different borrower profiles. Here is how they compare side-by-side based on TDHCA's August 2026 program matrices:
| Feature | My Choice Texas Home (MCTH) | My First Texas Home (MFTH) |
|---|---|---|
| First-Time Buyer Required? | No (open to repeat buyers, first-time buyers, and veterans) | Yes (unless a qualified veteran or buying in a targeted census tract) |
| Loan Types Available | FHA, VA, USDA, Fannie Mae HFA Preferred, Freddie Mac HFA Advantage | FHA, VA, and USDA only (no conventional loans) |
| Down Payment Assistance | 2% to 5% of total loan amount | 2% to 5% of total loan amount (plus an un-assisted low-rate option) |
| Second-Lien Structures | 30-year deferred repayable OR 3-year deferred forgivable (per Rate Notice) | 30-year deferred repayable (3-year forgivable available on MFTH + MCC Combo per Rate Notice) |
| Income Counted | Borrower income on Form 1003 only (non-purchasing spouse excluded) | Full household income (includes borrowers and non-purchasing spouse) |
| 2026 Income Limits | Up to 170% AMFI ($172,550–$228,480 on gov't loans; tiered on conventional) | 100%–115% AMFI non-targeted ($101,500–$154,560); 120%–140% targeted |
| Purchase Price Limit | None | $566,354–$598,019 non-targeted (1-unit); $692,211–$730,912 targeted |
| Can Combine With TXMCC? | No | Yes (on assisted MFTH Combo loans; not allowed on un-assisted option) |
| Federal Recapture Tax? | No | Yes (loans may be subject to it) |
| 3 Years of Tax Returns/Transcripts? | Not required by TDHCA | Required to verify first-time buyer status |
| Minimum Credit Score | 620 | 620 |
In addition to TDHCA's two programs, Texas buyers should also compare the Texas State Affordable Housing Corporation (TSAHC) options—the Home Sweet Texas Home Loan Program and Homes for Texas Heroes—which also allow repeat homebuyers and offer both grant and forgivable second-lien structures.
How to Apply for My Choice Texas Home
Buyers apply for My Choice Texas Home through a TDHCA-approved participating lender during mortgage pre-approval. Our team can help you check eligibility, compare options, and get connected with one.
- Check your eligibility and loan options: Review your credit score (620 minimum), qualifying income on Form 1003, and whether an FHA, VA, USDA, or conventional HFA loan fits your goals.
- Get pre-approved with a participating lender: Your loan officer will pull the daily TDHCA Rate Notice, compare the 30-year deferred and 3-year forgivable assistance tiers, and run your application through automated underwriting.
- Reserve your loan: For an eligible Texas home, your lender reserves your My Choice Texas Home loan in the TDHCA Lender Portal.
- Complete HUD-certified homebuyer education: Take an approved pre-purchase course (such as Finally Home!, Fannie Mae HomeView, or Freddie Mac CreditSmart Homebuyer U) and send the certificate to your loan officer prior to closing.
- Close and move in within 60 days: Your lender closes the loan and sells it to master servicer The Money Source (TMS), and you must occupy the home as your primary residence within 60 days of closing.
Next Steps: See If You Qualify for My Choice Texas Home
Whether you are selling your current house to move up, buying again after a few years of renting, or purchasing your first home with a conventional mortgage, the My Choice Texas Home program removes two of the biggest hurdles in state assistance: the first-time buyer rule and the purchase price cap.
Because TDHCA updates its Rate Notice and available assistance tiers daily, the fastest way to see your exact numbers is to have a participating lender compare My Choice Texas Home against My First Texas Home and TSAHC programs side-by-side.
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