Saving enough cash for a down payment and closing costs while keeping pace with home prices across Texas is one of the biggest hurdles first-time buyers face.
This 2026 guide breaks down the Texas Department of Housing and Community Affairs (TDHCA) My First Texas Home program—covering eligibility rules, the 2% to 5% down payment assistance options, current county income and purchase price limits, Mortgage Credit Certificate pairing, and how it compares with other state programs.
Check Your Texas Home Purchase Eligibility
By the end, you will know whether My First Texas Home fits your budget and timeline, what documents your loan officer will verify, and the exact steps to reserve your assistance.
What Is the My First Texas Home Program?
My First Texas Home (MFTH) is a statewide mortgage and down payment assistance program run by the Texas Department of Housing and Community Affairs (TDHCA) through its Texas Homebuyer Program portal.
Funded through tax-exempt mortgage revenue bonds, the My First Texas Home program pairs a 30-year, fixed-rate government-backed first mortgage with down payment and closing cost assistance of 2% to 5% of the total loan amount, while funding lasts. Buyers who do not need down payment help can also choose an unassisted first-mortgage option at a lower interest rate.
Since February 3, 2025, all TDHCA Texas Homebuyer Program loans have been serviced by The Money Source (TMS) as master servicer. You do not apply directly to TDHCA or TMS; instead, you work with a TDHCA-approved participating lender who reserves the funds and closes the loan.
Who Qualifies for My First Texas Home in 2026?
According to TDHCA's August 2026 program matrix and Lender Guide, eligibility starts with your homeownership history, where you live now, and how you plan to use the property.
The First-Time Homebuyer Rule and Its Two Exemptions
To qualify as a first-time homebuyer, neither you nor a non-purchasing spouse may have owned and occupied a primary residence at any point during the past three years. Your lender verifies this using your last three years of federal tax returns or IRS transcripts to confirm you did not claim a mortgage interest or property tax deduction on a primary home.
TDHCA waives the three-year first-time buyer rule in two situations:
- Honorably Discharged Veterans: Either the borrower or spouse is a qualified veteran with a DD-214 showing an honorable discharge who has not previously used the veteran exemption on a mortgage revenue bond loan.
- Targeted Areas: You are purchasing a home located inside a Qualified Targeted Census Tract listed under IRS Revenue Procedure 2024-08 on TDHCA's targeted-areas list.
Texas Residency Affidavit
If you qualify under the standard first-time homebuyer rule, you must sign a Texas Residency Affidavit showing a current Texas address. Borrowers qualifying under the veteran exemption or the targeted-area exemption are exempt from the Texas Residency Affidavit requirement.
Occupancy and Co-Signers
The home must be located in Texas and must become your principal residence within 60 days of closing. Non-occupying co-borrowers are not permitted under My First Texas Home. Co-signers are allowed, provided they do not take title to the property and do not live in the home.
Check Your Texas First-Time Homebuyer Eligibility
Eligible Loan Types and Property Types
My First Texas Home is strictly for government-backed mortgages and owner-occupied residential properties.
Supported First Mortgages
- FHA Loans in Texas: 30-year fixed-rate loans backed by the Federal Housing Administration (FHA 203(k) renovation loans are not allowed in any TDHCA program).
- VA Loans in Texas: 30-year fixed-rate VA loans.
- USDA Loans: 30-year fixed-rate USDA loans.
My First Texas Home does not offer conventional loans. If you prefer a Fannie Mae or Freddie Mac conventional mortgage with TDHCA down payment assistance, you will look at My Choice Texas Home instead.
First-mortgage interest rates are set daily by TDHCA on its official Rate Notice and vary based on whether you take down payment assistance, the percentage tier you select, and whether the property is in a targeted census tract. A participating lender can quote today's published rate when you are ready to lock.
Eligible Properties
Per TDHCA's August 2026 program matrix and Lender Guide, you can buy:
- New or existing single-family homes, condominiums, and planned unit developments (PUDs)
- Manufactured homes titled as real property (subject to a 0.50% manufactured housing funding fee)
- Two-unit duplexes, provided you occupy one unit as your primary residence and the property has been used as a residence for at least five years (the five-year rule is waived in targeted census tracts)
Rental properties, second homes, triplexes, and fourplexes are not eligible.
Down Payment Assistance Options (2% to 5%)
When you use the assisted version of the My First Texas Home program, TDHCA provides 2% to 5% of the total loan amount toward your down payment and closing costs, subject to available funding. The assistance is structured as a 0% interest second lien with no required monthly payments.
No cash back is allowed to the borrower at closing—even from gift funds—beyond reimbursement for items you paid outside of closing. Any leftover assistance is applied directly to reduce your principal balance.
Two Second-Lien Structures in the Program Rules
TDHCA's program matrix defines two second-lien formats for My First Texas Home:
| 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 on 1st lien and still occupying as primary residence |
| When Repayment Is Triggered | Sale, refinance, transfer, or payoff of the first mortgage | Sale, refinance, or payoff before it is forgiven |
| Added Second-Lien Costs | Recording fees only; no prepayment penalty | Confirm with a participating lender |
Check the Daily Rate Notice for Current Availability
Which second-lien structure and percentage tiers are open on any given day is governed by TDHCA's daily Rate Notice. For example, on the October 26, 2026 Rate Notice, standalone My First Texas Home bond loans offer the 30-year deferred repayable second lien at the 3%, 4%, and 5% tiers (with 2% marked N/A), while the 3-year deferred forgivable second lien appears under the COMBO: My First Texas Home + MCC option at the 2%, 3%, and 4% tiers (with 5% marked N/A).
Because TDHCA updates the Rate Notice daily, always ask your loan officer to verify which structures and percentages are open on the day you lock.
The Unassisted Option (First Mortgage Only)
If you already have your down payment and closing costs covered, My First Texas Home also offers an unassisted bond loan (no DPA). It carries a lower first-mortgage interest rate than the assisted tiers while keeping the same first-time buyer, income, and purchase price rules. Keep in mind that the unassisted bond option cannot be combined with a Texas Mortgage Credit Certificate.
Extra Local Gift Funds That Can Stack
According to the August 17, 2026 My First Texas Home matrix, TDHCA also lists local Housing Finance Corporation (HFC) gift funds that can stack with MFTH while funding lasts, first come, first served, with no repayment required:
- Capital Area HFC: $7,500 in Bastrop, Blanco, Burnet, Caldwell, Fayette, Lee, and Llano counties; $2,500 in Hays and Williamson counties (works with MFTH, MFTH Combo, and the no-DPA first lien).
- Harris County HFC: $1,000 in eligible parts of Harris County outside Baytown, Deer Park, Friendswood, Houston, La Porte, League City, Missouri City, Pasadena, and Pearland (works with MFTH and the no-DPA first lien).
- McKinney HFC: $5,000 inside the City of McKinney using Collin County limits.
Check Your Texas Home Purchase Eligibility
Pairing My First Texas Home With a Texas MCC
One of the strongest features of the My First Texas Home program is the ability to combine your assisted loan with a Texas Mortgage Credit Certificate (TXMCC) through TDHCA's "COMBO: My First Texas Home + MCC" option.
How the TXMCC Works in 2026
A Mortgage Credit Certificate is a non-refundable federal income tax credit you can claim every year you live in the home as your primary residence and pay interest on the mortgage.
- Current Credit Rate: On TDHCA's October 26, 2026 Rate Notice, the MCC credit rate is 15% of the annual mortgage interest you pay (TDHCA notes buyers should check the daily Rate Notice for the rate in effect when locking).
- No $2,000 Cap at the 15% Rate: Under IRS Form 8396 rules, the federal $2,000 annual limit applies only when a certificate's credit rate exceeds 20%. At TDHCA's 15% credit rate, your annual credit is simply 15% of the mortgage interest paid that year, up to your federal income tax liability.
- Three-Year Carryforward: If your credit is larger than your federal income tax bill in a given year, you can carry the unused portion forward for up to the next three tax years. If you itemize deductions, you reduce your mortgage interest deduction by the amount of the MCC credit claimed.
- Combo Fee: Adding the MCC in a My First Texas Home Combo costs $400 (compared with $1,000 for a standalone MCC), and that $400 issuance fee is waived for eligible military borrowers.
Note that after February 15 of each calendar year, TDHCA requires your prior year's federal tax return or transcript before it will issue the MCC.
Credit Score, DTI, Homebuyer Education, and Program Fees
Beyond first-time buyer status, every My First Texas Home file must clear TDHCA's underwriting and education guidelines.
Credit Score and Debt-to-Income (DTI) Ratio
- Minimum Credit Score: 620 middle (determining) score. A sole borrower without an established credit score is not eligible.
- Debt-to-Income Ratio (DTI): For loans approved through an automated underwriting system (AUS), TDHCA follows the AUS findings. If a loan requires manual underwriting, the maximum DTI is 45%, and manually underwritten FHA loans carry an additional 0.25% loan-level price adjustment.
Mandatory Homebuyer Education
Every borrower on the loan must complete a pre-purchase, HUD-certified homebuyer education course before closing. General financial-literacy classes do not satisfy this rule. TDHCA accepts courses such as Finally Home!, Freddie Mac CreditSmart Homebuyer U, Fannie Mae HomeView, or any other HUD-certified homebuyer course. Non-occupying co-signers do not have to take the class.
Published Program Fees
According to the August 17, 2026 MFTH matrix and October 26, 2026 Rate Notice, TDHCA sets the following program fees. These are paid by the lender (netted at purchase or paid to the compliance administrator), so ask your loan officer how they show up in your loan costs:
| Program Fee | Published Amount |
|---|---|
| TMS Funding Fee | $319 |
| Tax Service Fee | $80 |
| Fraud Prevention Fee | $20 |
| Life-of-Loan Flood Certification | $15 |
| Compliance Review (Hilltop Securities) | $225 |
| MCC Issuance Fee (MFTH + MCC Combo only) | $400 (waived for military) |
| Manufactured Housing (MHU) Funding Fee | 0.50% (if applicable) |
| Lender Origination Points | Up to 0.50% maximum |
2026 Income and Purchase Price Limits
Because My First Texas Home is backed by tax-exempt mortgage bonds, both your household income and the home's purchase price must fall within county limits published by TDHCA.
For MFTH, household income is more inclusive than standard mortgage qualifying income: it counts the income of all borrowers, any non-purchasing spouse, and anyone else who will live in the home and be liable on the Deed of Trust (non-occupying co-signers are not counted).
Non-targeted limits equal 100% of Area Median Family Income (AMFI) for 1 to 2 person households and 115% AMFI for households of 3 or more. In Qualified Targeted Census Tracts, limits rise to 120% AMFI (1–2 persons) and 140% AMFI (3+ persons).
The table below shows the current published 1-unit limits effective July 13, 2026 for major Texas counties and the Balance of State. Because TDHCA updates these figures annually, always confirm your county's active numbers with a participating lender or review our full guide to Texas Homebuyer Income & Purchase Price Limits.
| County (HUD Metro Area) | Income Limit: Non-Targeted (1–2 Persons) | Income Limit: Non-Targeted (3+ Persons) | Income Limit: Targeted Tract (1–2 Persons) | Income Limit: Targeted Tract (3+ Persons) | Max Purchase Price (Non-Targeted) | Max Purchase Price (Targeted Tract) |
|---|---|---|---|---|---|---|
| Harris, Fort Bend, Montgomery (Houston HMFA) | $104,000 | $119,600 | $124,800 | $145,600 | $566,354 | $692,211 |
| Dallas, Collin, Denton (Dallas HMFA) | $121,100 | $139,265 | $145,320 | $169,540 | $589,596 | $720,617 |
| Tarrant (Fort Worth-Arlington HMFA) | $110,300 | $126,845 | $132,360 | $154,420 | $589,596 | $720,617 |
| Bexar (San Antonio-New Braunfels HMFA) | $104,725 | $120,434 | $125,670 | $146,616 | $583,580 | $713,265 |
| Travis, Williamson (Austin-Round Rock-San Marcos MSA) | $134,400 | $154,560 | $161,280 | $188,160 | $598,019 | $730,912 |
| El Paso, Hidalgo, Lubbock & Balance of State (all unlisted counties) | $101,500 | $116,725 | $121,800* | $142,100* | $566,354 | $692,211* |
*Targeted-area income and price limits apply only if the specific property sits inside a Qualified Targeted Census Tract on TDHCA's official tract list. If you are buying an eligible 2-unit duplex, higher purchase price limits apply ($725,146 to $765,585 non-targeted, depending on the metro area).
Check Your Eligibility Against Your County's Limits
Understanding Federal Recapture Tax in Plain English
According to TDHCA's program matrix and Lender Guide, both My First Texas Home loans and Texas Mortgage Credit Certificates may be subject to federal recapture tax. The term sounds intimidating, but it is a federal rule that can apply only in certain situations when you later sell the home.
TDHCA's program documents flag the possibility of recapture but do not spell out the federal calculation. Before you close, ask a participating lender (and your tax professional) to walk you through how recapture could apply to your situation.
By comparison, TDHCA says My Choice Texas Home loans are not subject to recapture tax.
My First Texas Home vs. My Choice Texas Home
TDHCA runs a second flagship program called My Choice Texas Home (MCTH). If you run into a roadblock with My First Texas Home—such as owning a home within the last three years, needing a conventional mortgage, or having a non-purchasing spouse whose income pushes you over the bond limit—My Choice Texas Home is often the immediate alternative.
| Feature | My First Texas Home (MFTH) | My Choice Texas Home (MCTH) |
|---|---|---|
| First-Time Buyer Required? | Yes (unless veteran or buying in a targeted tract) | No — open to first-time and repeat buyers |
| Eligible Loan Types | FHA, VA, USDA only | FHA, VA, USDA, Fannie Mae HFA Preferred, and Freddie Mac HFA Advantage |
| Down Payment Assistance | 2% to 5% (0% interest second lien) | 2% to 5% (0% interest second lien) |
| Can Pair With TXMCC? | Yes (on assisted Combo loans) | No |
| Income Counted Toward Limit | Total household income (includes non-purchasing spouse) | Only qualifying borrower income on the 1003 loan application |
| 2026 Income Limits (Govt Loans) | 100%–115% AMFI non-targeted (120%–140% targeted) | 170% AMFI statewide ($172,550 to $228,480 depending on county) |
| Purchase Price Limit? | Yes ($566,354 to $598,019 non-targeted for 1-unit) | None |
| 3 Years of Tax Returns Required? | Yes (to verify first-time buyer status) | No |
| Subject to Recapture Tax? | Yes | No |
Beyond TDHCA, Texas buyers can also compare the Texas State Affordable Housing Corporation (TSAHC) options—including the Home Sweet Texas Home Loan Program and Homes for Texas Heroes—in our broader guide to Texas First-Time Homebuyer Grants & Programs (2026).
How to Apply for My First Texas Home
You cannot reserve My First Texas Home funds directly through the state website; the application happens as part of your mortgage pre-approval through a participating lender.
- Check Your Eligibility and Connect With an Approved Lender: Review your credit score (620+ middle score), household income, and prior three years of tax returns. Our team can help you compare MFTH against My Choice Texas Home and TSAHC options and get connected with a TDHCA-approved participating lender.
- Choose Your Assistance Tier and Check the Daily Rate Notice: Decide whether you want the standalone assisted loan, the MFTH + MCC Combo, or the unassisted low-rate option, and verify which second-lien structures (30-year deferred or 3-year forgivable) are active that day.
- Complete HUD-Certified Homebuyer Education: Take an approved pre-purchase course (such as Finally Home!, HomeView, or CreditSmart Homebuyer U) early so your certificate of completion is ready before closing.
- Reserve Your Loan: For an eligible Texas home within your county's price limit, your participating lender reserves your MFTH loan (and MCC, if applicable) in the TDHCA Lender Portal.
- Close and Move In Within 60 Days: Your lender originates and closes the loan, and you must occupy the property as your primary residence within 60 days of closing.
Next Steps: See If My First Texas Home Fits Your Purchase
The My First Texas Home program remains one of the most versatile ways to buy a home in Texas with 2% to 5% in 0% interest down payment assistance—and the ability to layer the Texas Mortgage Credit Certificate (15% on the October 26, 2026 Rate Notice) makes it especially valuable for first-time buyers and veterans using FHA, VA, or USDA financing.
Because TDHCA interest rates and available DPA tiers are updated daily, the fastest way to get real numbers for your county is to run a quick eligibility check and review today's rate sheet with an approved loan officer.
Ready to Get Started?
Check your eligibility in under 2 minutes. No credit pull, no obligation.
Get our Texas updates in your Google feed
Add Make Texas Your Home as a preferred source to see our rate, grant, and program updates more often in Google Search.