Friend, let me tell you what I see all the time. A single mom comes in thinking she needs twenty thousand dollars saved to buy a home. She has six and she assumes she is not ready. But the truth is, sometimes she is closer than she thinks. She just does not understand how the programs are structured.
TDHCA is one of those programs that, when used correctly, can turn I'm not ready into Let's go house hunting. But it must be understood properly and thats what I'm here for.
What Is TDHCA?
TDHCA stands for the Texas Department of Housing and Community Affairs.
They are a state agency that administers housing programs across Texas. They do not directly lend money. Instead, they authorize participating lenders to offer specific loan products that include down payment assistance.
Their homebuyer offerings fall under the umbrella of the Texas Homebuyer Program.
Official program page:
https://welcomehome.tdhca.texas.gov/programs
Program chart with detailed breakdowns:
https://welcomehome.tdhca.texas.gov/uploads/Program-Chart-Final.pdf
The Two Core Programs You Will Hear About
1. My First Texas Home
This program is generally for first time homebuyers, meaning someone who has not owned a home in the past three years.
Important nuance you do not have to be a first time buyer in certain targeted areas or if you meet specific criteria like being a veteran.
This program pairs:
A 30 year fixed rate mortgage
Down payment assistance
2. My Choice Texas Home
This program does not require you to be a first time homebuyer in many cases. It is designed for buyers who may have owned before but still need assistance with upfront costs.
This is powerful for buyers who:
Owned years ago
Went through divorce
Sold a prior home
Are rebuilding financially
How the TDHCA Structure Works
TDHCA programs combine:
A 30 year fixed rate first mortgage with down payment assistance up to a certain percentage of the loan amount, commonly up to 5 percent depending on product and year.
Example:
Purchase price: $275,000
Loan amount: $265,000
5 percent DPA could equal $13,250
That assistance is typically delivered as a second lien. This means you have your primary mortgage and a second lien attached to the property representing the assistance amount.
How the Assistance Is Structured
TDHCA assistance usually comes as one of two forms:
Deferred Repayable Second Lien
No monthly payment
Due when you sell
Due when you refinance
Due when the first mortgage is paid off
This means the assistance sits quietly in the background, but it is not forgiven.
Deferred Forgivable Second Lien
No monthly payment
Forgiven after a set occupancy period
If you sell or refinance before forgiveness, repayment may be required
You must confirm your exact structure with your lender, never assume.
Income Limits and Household Size
TDHCA has income caps based on:
County
Household size
Household size includes everyone who will live in the home, not just who is on the loan. For example, if you are a single mother with two children, your household size is three. Income limits vary by county, and areas like Harris County, Brazoria County, and surrounding areas may have different caps.
The program chart provides updated limits:
https://welcomehome.tdhca.texas.gov/uploads/Program-Chart-Final.pdf
What Income Counts?
Gross income is used.
That includes:
W2 wages
Salary
Hourly income
Overtime if consistent
Child support if properly documented
Self employment income averaged over time
Child support must usually show a consistent payment history to be counted. If it is sporadic, your lender may not be able to use it. Plan your purchase based on income that is reliable.
Credit Score Expectations
TDHCA itself does not publish a single universal minimum score because eligibility also depends on the loan type being used.
Your score requirements may vary depending on:
FHA
Conventional
VA
USDA
Ask your lender what minimum score is required for this specific TDHCA product is there a higher score requirement for DPA than for standard FHA.
Purchase Price Limits
There are also purchase price limits based on county. This prevents the program from being used for luxury homes. Ask your lender what is the maximum purchase price allowed in my county under this program
Homebuyer Education Requirement
Many TDHCA programs require completion of a homebuyer education course. This is not punishment, it is preparation.
Education covers:
Budgeting
Mortgage terminology
Maintenance responsibilities
Avoiding foreclosure
Understanding escrow
Education page:
https://welcomehome.tdhca.texas.gov/programs/texas-statewide-homebuyer-education-program
Pro Tip:
Complete education early, do not wait until you are under contract.
Pros of TDHCA
-
Reduces upfront cash needed
-
30 year fixed rate stability
-
Works with multiple loan types
-
Structured, statewide oversight
-
Can preserve emergency savings
-
Allows buyers to enter the market sooner
Cons of TDHCA
-
Interest rate may be slightly higher than non assisted loan
-
Second lien may impact refinancing
-
Income limits apply
-
Purchase price limits apply
-
Must use participating lenders
-
Paperwork heavy
Protect Your Emergency Fund
Never close with zero in savings. Even with DPA, aim to keep at least two months of essential expenses in reserve.
Essential expenses include:
Mortgage
Utilities
Groceries
Insurance
Transportation
Think About Refinancing
If you believe interest rates may drop and you want to refinance in a year or two, ask if I refinance, does the second lien have to be paid off, can it be subordinated Do not assume you can refinance freely without understanding the structure.
Step by Step Strategy to Use TDHCA Wisely
Step 1
Find a participating lender
Step 2
Request two scenarios
With TDHCA
Without TDHCA
Step 3
Compare:
Cash to close
Interest rate
Monthly payment
Total loan balance including second lien
Step 4
Confirm repayment triggers
Step 5
Confirm eligibility based on income and purchase price limits
Step 6
Complete education early
Step 7
Keep your financial life stable during underwriting
No new credit.
No job changes if possible.
No unexplained large deposits.
Who TDHCA Is Best For
Buyers who:
Have steady employment
Have moderate savings but not enough to comfortably cover all closing costs
Want a 30 year fixed rate
Plan to stay in the home at least several years
Need structure and clarity
Emotional Reality
Sis, programs like TDHCA are not charity.
They are policy.
They exist because the state recognizes that renters who can afford monthly payments are often blocked by upfront cash.
You are not asking for help because you failed.
You are using a program designed to create access.
That is wisdom.
This is a gentle reminder to understand the structure of your loan, and I choose the path that builds stability and equity for your family.
Sis, stop renting.
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