Home Sweet Texas Home Loan Program

On a $335,000 home in Houston, the Harris County median in our data, an FHA buyer needs 3.5% down, or $11,725, leaving a base loan of $323,275. Choosing the full 5% Home Sweet Texas assistance produces about $16,164, and slightly more if the FHA premium is financed, since TSAHC calculates it on the total loan amount. A household earning $95,000 qualifies for Non-Bond DPA under Harris County's $156,000 limit but is over the $83,200 Bond DPA limit.

Estimated closing costs in the Houston area run $6,500 to $10,000, so total cash to close is roughly $18,225 to $21,725 before prepaid items. The $16,164 covers the full $11,725 down payment and $4,439 of closing costs, leaving about $2,061 to $5,561 out of pocket. Negotiating seller-paid closing costs can cover most of that gap, within the seller-credit limit your loan type allows.

A first-time buyer in a one-or-two-person household earning under $104,000 can add TSAHC's Mortgage Credit Certificate to Non-Bond DPA. At an assumed 6.5% rate, first-year interest on $323,275 is about $20,906, and the 15% credit is worth about $3,136 against federal income tax. Combined with $16,164 in assistance, that is roughly $19,300 in first-year benefit, though selling within nine years can trigger recapture tax.

Home Sweet Texas stacks most cleanly with TSAHC's own Mortgage Credit Certificate, which returns 15% of each year's mortgage interest as a federal tax credit for first-time buyers. The MCC works only with Non-Bond DPA or the no-assistance rate option, and its income limits are lower: $104,000 for one or two people and $119,600 for three or more in Harris County. Unused credit carries forward for up to three tax years.

The MCC cannot be combined with Bond DPA. Other subsidy programs may be layered on only if they meet FHA, VA, USDA, Fannie Mae, Freddie Mac and Lakeview rules, and their funds may not be tied to the first mortgage. Extra second-lien help may be allowed in certain cases when your TSAHC assistance is a grant. TDHCA's My First Texas Home is a separate first-mortgage program, so a purchase uses one or the other. Call TSAHC at 877-508-4611 before layering a city or county grant.

Seller-paid closing costs and gift funds are the other main ways to cut cash to close. The assistance itself can pay the down payment, closing costs and prepaid items, but cannot pay off debts, reduce principal or go back to you beyond reimbursing earnest money once your minimum contribution is met. Ask your lender to size the assistance level so it covers what you owe without excess.

Home Sweet Texas has advantages most Texas DPA programs lack. Repeat buyers qualify for Non-Bond DPA, and that option has no purchase price limit. The income limits are generous, at $156,000 in Harris County and $201,600 in Travis County for any household size, far above the $83,200 Bond DPA cap. Government-loan buyers can take the assistance as a grant that is never repaid after the first six months, and conventional buyers get a 0% second lien forgiven after three years. First-time buyers can add an MCC worth about $3,136 in the first year on a $323,275 loan.

The biggest limitation is that the assistance is tied to a TSAHC first mortgage. You must use a participating lender, a 30-year fixed loan and Lakeview as servicer, so you cannot shop the whole market for the lowest rate. The conventional second lien must be repaid in full if you sell, refinance or move out within three years. Credit floors of 620 and 640, a 0.50% fee for government borrowers scoring 620 to 639, and required homebuyer education add friction. Public servants should compare Homes for Texas Heroes, and first-time buyers should compare TDHCA's My First Texas Home.