Sis, when I talk to first time buyers, the number one question I hear is: How much do I really need to bring to closing? The second most common is: What programs can help me get there? TDHCA is one of the biggest official programs in the state with multiple options depending on your income, family size, and long-term goals. This is not a private grant. This is government-backed assistance with structure, guidelines, and clear eligibility rules. Let's unpack it fully so you can walk into ownership with confidence, not confusion.
What Is the TDHCA Texas Homebuyer Program?
The Texas Homebuyer Program is an umbrella name for several mortgage products paired with down payment assistance, administered through TDHCA and delivered through participating lenders. TDHCA itself does not lend money directly. Instead, they authorize lenders to offer the loans and assistance based on statewide guidelines.
The two main components you've probably heard of are:
My First Texas Home (MFTH)
A first mortgage program with flexible guidelines for first-time buyers and certain targeted income brackets.
My Choice Texas Home (MCTH)
A program that allows buyers to use the assistance even if they have owned before (depending on eligibility).
You
Your children
Anyone else living under your roof full time
That is household size for income purposes, and income includes documented wages, salaries, and certain consistent child support. Irregular or inconsistent child support may not count unless documented as regular income.
First-Time Buyer Rule and Exceptions
Many TDHCA programs are targeted to first-time buyers, but that definition is specific:
A first-time buyer is someone who has not owned a home in the last three years.
However, there are exceptions in certain targeted areas or specific life situations, such as:
Displaced homemakers
Single parents
Veterans
Your lender will determine whether an exception applies.
Eligible Loan Types
TDHCA programs can work with:
FHA loans
VA loans (with proper approval)
USDA loans in eligible areas
Conventional loans
This flexibility makes TDHCA appealing for many buyers.
But the exact combinations allowed can vary by program so you must confirm with your lender.
Down Payment Assistance Amounts
TDHCA typically offers DPA up to 5% of the first mortgage amount.
For example:
Loan amount $200,000 Up to $10,000 DPA
This assistance can be applied to:
Down payment
Closing costs
Prepaid items
But it does not usually cover inspection, appraisal, or earnest money. Ask your lender exactly how your assistance will be applied.
Grant vs Forgivable vs Deferred: How TDHCA Handles It
TDHCA's second lien assistance most often comes as:
Deferred Repayable Second Lien
No monthly payment on the assistance loan, and it becomes due upon sale, refinance, or payoff of the first mortgage.
Forgivable Second Lien
The assistance is forgiven after a set period (commonly three to five years) if you remain in your home and follow program rules.
Your lender will tell you which one applies based on your eligibility and program year.
Pros of the TDHCA Homebuyer Program
1. Reduces Cash to Close
You keep more savings, which protects your emergency fund.
2. Structured Assistance
There are clear guidelines and statewide oversight no guessing.
3. Works With Multiple Loan Types
FHA, VA, USDA, and conventional are typically allowed.
4. Can Include Both Down Payment and Closing Cost Support
This matters because many buyers underestimate closing costs.
5. Strong Resource and Support Infrastructure
TDHCA provides lender guides, program charts, and official breakdowns.
Cons of the TDHCA Program
1. You Must Use Participating Lenders
Not every lender offers TDHCA products.
You must work with a lender approved by TDHCA.
2. Income and Purchase Limits Apply
You must fall below the income caps and purchase price limits based on your area.
3. Program Paperwork and Education Requirements
Some programs require homebuyer education and documentation that can feel overwhelming.
4. Assistance May Create a Second Lien That Affects Refinancing or Sale
Depending on the structure, the assistance could come due if you sell or refinance.
What Buyers Need to Watch Closely
1. Income Volatility
If your income fluctuates (overtime, bonuses, seasonal work), the lender may average your income over the past 24 months. Ask how your income will be calculated.
2. Child Support as Income
If you want child support counted, it often must meet specific documentation rules. Ask your lender what they need.
3. Job Changes During the Process
Underwriting hates instability. Try not to switch jobs mid-process if you can avoid it.
4. Timing of Funds
If you expect an inheritance, tax refund, or other deposit, ask your lender how it should be documented before it can be counted.
Truth: It depends on the lien structure. If it's forgivable and you've met the timeline, you may not owe. If it's repayable, refinancing triggers payoff.
Myth: My income is too high.
Truth: Income limits vary widely by county and household size. Your first step is to ask your lender to check your eligibility chart.
Myth: I can't buy with one income.
Truth: You can qualify if your income, credit, and debt-to-income ratio align and assistance helps reduce cash barriers.
Closing Encouragement
Sis, programs like TDHCA exist because Texas knows the biggest barrier to ownership isn't willingness it's cash at closing.
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