Texas First-Time Home Buyer Programs: TDHCA Guide & Tools

We checked these rules on September 26, 2026 against TDHCA's own documents, dated from April 2025 to August 2026, plus one older recapture brochure. TDHCA changes its limits and rates during the year, so read the sources and their dates before relying on any number.

Check your fit and compare the options

Pick your county and enter your situation. The tool applies TDHCA's published limits, then compares a first mortgage on its own with one that has assistance, using rates you enter from a lender quote. It is a planning aid. Only a participating lender can decide your eligibility, and nothing you type leaves your browser.

How the Texas programs are organized

TDHCA does not lend directly. Participating lenders make the loans, and TDHCA sets the rules (TDHCA Homebuyer Program: Programs). There are two loan programs, and a tax credit that can go with either the first or stand alone:

Rules that apply to both loan programs, from the matrices: you must live in the home as your principal residence within 60 days of closing, the home must be in Texas, and every borrower, including a non-purchasing spouse, must complete homebuyer education. There can be no excess cash back to the borrower, gift funds included. Eligible properties are new or existing single-family homes, condominiums, planned unit developments, manufactured homes that are real property (single or double wide), and duplexes where one unit is your principal residence and the property has been residential for at least five years, a wait that does not apply in a qualified targeted census tract. Co-signers are allowed but cannot be on title or live in the home (My First Texas Home Program Matrix (published 6/9/2025); My Choice Texas Home Program Matrix (published 4/1/2025)). Our pre-approval guide and Loan Estimate guide help you talk to a lender.

Down payment assistance: the two second liens

Assistance is a second loan of 2%, 3%, 4% or 5% of the first mortgage. The matrix lists two versions, both at 0% interest with no required monthly payments and no prepayment penalty, and with no costs other than recording fees (My First Texas Home Program Matrix (published 6/9/2025)):

There is a trade-off that the tool above lets you price. TDHCA's rate notice lists a separate first-mortgage rate for each assistance level and version, and rates change daily, so ask your lender for the quote with and without assistance and enter both. The difference in the monthly payment is what the assistance costs you each month for as long as you keep the loan. TDHCA rates and fees are on its rate notice (TDHCA Rate Notice (August 12, 2026)), which also lists fees such as the compliance file review fee of $225 and origination points up to 0.50%.

Gift funds in certain counties

TDHCA partners with local housing finance corporations to add gift money, with no repayment, that must be combined with a TDHCA product, is first come first served and depends on funding. The amounts in the matrix (My First Texas Home Program Matrix (published 6/9/2025); TDHCA: Additional Grant Down Payment Assistance):

The gift program's income limits match My First Texas Home's. The county list comes from TDHCA's pages, and one copy we read was from November 2025, so ask your lender which gifts are open.

Income and purchase price limits for all 254 counties

The limits below took effect July 13, 2026. The income figures count everyone who will sign the deed of trust, including a non-purchasing spouse. Counties not named in an area use TDHCA's "balance of state" row ($101,500 for one or two people, $116,725 for three or more, and a $566,354 price limit). Sources: TDHCA Income and Purchase Price Limits (effective July 13, 2026) and TDHCA Qualified Targeted Census Tracts.

† The county has at least one qualified targeted census tract, and a home in one qualifies for higher limits, which the tool applies when you answer "Yes" to the tract question. 88 counties have qualified tracts. ‡ In TDHCA's own table, this row's 3-or-more figure does not follow the pattern of every other row, where it is 115% of the 1-to-2-person figure. We show the number as printed. Fayette County lists $126,845 where 115% would be $116,725, and Glasscock County lists $170,240 where 115% would be $167,808. Ask a lender to confirm before relying on it. The table shows non-targeted limits. My Choice Texas Home has its own income limits on page 2 of TDHCA's PDF, which we did not tabulate.

Targeted census tracts

A qualified census tract is one where at least 70% of families have income at or below 80% of the statewide median, and TDHCA applies only the tracts listed in the IRS's Revenue Procedure 2024-08. To check an address, TDHCA says to find its census tract with the FFIEC Census Geocoder using the full address, then match the tract number and county to its list, and if both match exactly, the home is in a targeted tract (TDHCA Qualified Targeted Census Tracts). It lists tracts in 88 of the 254 counties. Living in a targeted tract does three things under My First Texas Home: it removes the first-time buyer requirement, raises the income limit, and raises the purchase price limit.

The Texas Mortgage Credit Certificate

A Mortgage Credit Certificate turns part of your mortgage interest into a tax credit. TDHCA's rate notice lists a 15% credit rate for the combination of My First Texas Home and an MCC, with an issuance fee of $400 for the combination and $1,000 for the stand-alone version (waived for military combinations) (TDHCA Rate Notice (August 12, 2026)). According to the IRS (IRS Form 8396, Mortgage Interest Credit (2025)):

• Your credit is the interest you paid on the certified loan amount times the rate on your certificate, and that rate is not your mortgage rate.
• The certificate rate can be from 10% to 50%. Above 20%, the credit is capped at $2,000 a year. At 15% there is no such cap, so the limit is your tax bill.
• You can use only as much credit as the federal tax you owe. The unused part carries forward, and the form tracks carryforwards from earlier years.
• If you itemize, you must reduce your home mortgage interest deduction by the credit.
• The home must be your main home. If you refinance, the certificate must be reissued to keep the credit.

On a $300,000 loan at a placeholder 6.5%, first-year interest is about $19,401, so the 15% credit is about $2,910, which is about $243 a month, if you owe at least that much federal tax. Over ten years the credit would total about $27,281 as interest falls.

First-year credit at the 15% rate. The mortgage rates are placeholders, not forecasts.

Estimate your tax credit and the recapture risk

Enter the loan, your rate and the federal tax you expect to owe. The tool shows each year's credit, how much you could use, and the most recapture tax that could ever apply if you sold. It is an estimate, not tax advice.

Recapture tax, in plain words

Recapture tax takes back part of the benefit if things go very well. TDHCA says it is owed only when all three are true (TDHCA: Understanding Recapture Tax):

1. You sell the home within 9 years.
2. Your income has risen by a lot, which TDHCA describes as generally more than 5% a year, measured from the maximum income limit at the time you bought, not from your own income then.
3. You have a gain on the sale.

The tax never exceeds the lesser of 50% of the gain, after selling costs, and 6.25% of the original mortgage. On a $300,000 loan with a $100,000 gain, that ceiling is $18,750. TDHCA says the fifth year is potentially the costliest time to sell, that refinancing neither triggers nor removes the exposure, and that its staff cannot compute your exact tax. Any tax is filed with IRS Form 8828. We read TDHCA's brochure from an archive copy dated March 2024, so ask about anything that has changed. My Choice Texas Home says it is not subject to recapture tax (My Choice Texas Home Program Matrix (published 4/1/2025)).

Rules people miss

• Everyone goes on the loan papers. For My First Texas Home, all borrowers and any non-purchasing spouse must be on title and on the deed of trust, and the spouse's income counts toward the limit. My Choice does not count a non-purchasing spouse's income.
• Documents. My First Texas Home asks for three years of IRS transcripts or signed tax returns for every borrower including a non-purchasing spouse. My Choice does not require tax returns.
• No cash back. Excess cash to the borrower, including gift funds, is not allowed. It can go to reduce the loan.
• Manual underwriting. Not allowed for FHA. VA and USDA loans can be manually underwritten with a 45% maximum debt-to-income ratio.
• Loans are on a clock. The rate notice says loans must be purchased within 60 days, and lock extensions cost 0.0625% for 7 days up to 0.25% for 30 days.
• Insurance. The matrix caps the homeowners hazard deductible at 2%, and at 5% for other perils such as wind, hail and hurricane. Ask your insurer early.

What this guide does not cover

We did not read TDHCA's full Lender Guide, My Choice's own income limits (page 2 of the limits PDF), the terms of the 3-year forgivable version beyond what the matrix says, city or county programs other than the gift partners, or the interest rates, which change daily and are on TDHCA's rate notice. A separate Texas agency, the Texas State Affordable Housing Corporation (TSAHC), also runs home loan and assistance programs. Its website blocked our automated access and we did not read it, so this guide does not cover TSAHC. Check it on your own before you decide. Lenders may add requirements. To find out whether your income is at or below 80% of area median for My Choice's conventional options, TDHCA points to Fannie Mae's AMI lookup tool (My Choice Texas Home Program Matrix (published 4/1/2025)).

Sources and how current they are

TDHCA's own servers were not reachable from the connection we used, so we read Internet Archive copies of its pages and PDFs, captured between November 2025 and August 2026 (the recapture brochure is a 2024 copy). The documents carry their own dates:

The program matrices are older than the July 2026 limits, so where a number appears in both we used the newer limits table. We are not affiliated with TDHCA or any lender, and this guide is information, not financial, tax or legal advice. We have not had this page reviewed by a housing counselor or tax professional, and we recommend a HUD-approved counselor and a tax preparer for your own situation. See our first-time home buyer guide for the national picture, and our California guide for a state with a different approach, and our down payment assistance guide for every state's housing agency.