Houston Down Payment Assistance Programs 2026: The Complete Guide

Saving for a down payment is the biggest barrier to homeownership for most Houston buyers. But here's what many people don't know: Houston has some of the most generous down payment assistance programs in Texas — with grants up to $125,000 available for qualified buyers.

As a Houston mortgage loan officer, I help buyers access these programs every week. In this guide, I'll break down every major program, who qualifies, and how to actually get approved.

City of Houston Homebuyer Assistance Program (HAP)

The big one. The City of Houston offers up to $125,000 in assistance for qualified first-time homebuyers.

What It Covers:

• Down payment
• Closing costs
• Principal reduction
• Interest rate buy-down

Who Qualifies:

• First-time homebuyer (or haven't owned in 3+ years)
• Household income at or below 80% Area Median Income
• Property must be within Houston city limits
• Property must pay taxes to City of Houston
• Must complete homebuyer education course

2026 Income Limits (80% AMI):

Household Size	Maximum Income
1 person	$54,950
2 people	$62,800
3 people	$70,650
4 people	$78,500
5 people	$84,800

How to Apply:

1. Complete HUD-approved homebuyer education
2. Get pre-approved with a participating lender
3. Find a home in Houston city limits
4. Submit application through City of Houston HCDD

Harris County Down Payment Assistance

Live outside Houston city limits but in Harris County? This program has you covered.

What You Get:

• Up to $25,000 in down payment assistance
• Forgivable after 5 years (you don't pay it back if you stay)

Requirements:

• First-time homebuyer
• Income at or below 80% AMI
• Property in Harris County (outside Houston city limits)
• Minimum credit score: 620
• Must occupy as primary residence

Best For:

Buyers looking in Katy, Cypress, Spring, Humble, Pasadena, or other Harris County areas outside Houston proper.

TSAHC (Texas State Affordable Housing Corporation)

This is a statewide program that works anywhere in Texas, including Houston.

Programs Offered:

1. Home Sweet Texas Program

• Down payment assistance as a grant (free money)
• Or as a deferred forgivable second lien
• Available for first-time AND repeat buyers

2. Homes for Texas Heroes

• For teachers, police, firefighters, EMS, veterans
• Below-market interest rates
• Down payment assistance up to 5%

Income Limits:

Vary by county and program. Generally up to 115% AMI for some programs.

The Trade-Off:

TSAHC programs typically come with slightly higher interest rates (0.25-0.75% above market). Many buyers refinance after 6-12 months to drop the rate once they have equity.

My Home DPA (Southeast Texas Housing Finance Corporation)

Another excellent option for Houston-area buyers.

What You Get:

• Up to 5% of loan amount for down payment/closing costs
• Available as grant or forgivable loan
• Works with FHA, VA, USDA, and Conventional loans

Requirements:

• Minimum 620 credit score
• Income limits vary by program
• Homebuyer education required

FHA Loans: The Down Payment Game-Changer

Not technically "assistance," but FHA loans only require 3.5% down — and that can come from:

• Gift funds from family
• Down payment assistance programs
• Employer assistance
• Grants

With a $300,000 home, that's only $10,500 down. Combine with DPA and you could be in a home with almost nothing out of pocket.

How to Stack Programs for Maximum Benefit

Here's what smart Houston buyers do:

Scenario: Buying a $280,000 home in Houston

1. FHA Loan — 3.5% down required ($9,800)
2. City of Houston HAP — Covers down payment + closing costs
3. Result: Move in with minimal cash out of pocket

Or:

1. Conventional Loan — 3% down ($8,400)
2. TSAHC Grant — 5% assistance ($14,000)
3. Result: Assistance exceeds requirement, extra covers closing costs

Common Mistakes That Kill DPA Applications

1. Not Getting Pre-Approved First

Most programs require you to work with a participating lender. Don't find a house first — get pre-approved with someone who knows these programs.

2. Missing Income Limits by $100

Income limits are strict. If you're borderline, strategies like maxing 401k contributions can help reduce qualifying income.

3. Skipping Homebuyer Education

Almost every program requires a HUD-approved course. Do it early — it's usually free and takes 4-8 hours.

4. Not Understanding Forgivable vs. Repayable

Some assistance is a grant (free). Some is a forgivable loan (free if you stay 5+ years). Some must be repaid. Know what you're signing up for.

Who Should I Talk To?

Here's my honest take:

Use DPA if:

• You qualify income-wise
• You plan to stay 3-5+ years
• You'd rather keep cash for emergencies/repairs
• You're a first-time buyer or haven't owned in 3+ years

Skip DPA if:

• You have 10-20% down saved already
• You're buying above program price limits
• You need to move fast (some programs are slow)
• You're an investor (these are for primary residence only)

Next Steps

1. Check your income against program limits above
2. Get pre-approved with a lender who works with DPA programs
3. Complete homebuyer education — do this now, not later
4. Start house hunting in eligible areas

Need help figuring out which programs you qualify for? I work with all the major Houston DPA programs and can tell you exactly what's available for your situation.